It’s not unusual that almost everything has been imbued with technology in this digitized era. This includes the finance sector, leading to the birth of the term “fintech”—a combination of financial and technology.
In the current hospitality industry, fintech plays an incredibly important role for many businesses. The innovation of fintech has transformed the industry, making it more advanced and benefiting both businesses and customers alike.
Our article today will take you to explore and understand ways fintech influences and transforms the hospitality industry, starting from its definition, crucial roles, to its advanced innovations that take the hospitality industry to a whole new level!
Understanding the Basics of Fintech
Understanding fintech.
Let’s start with a simple question: What is fintech? Fintech (financial technology) is a term that encompasses technologies created to automate traditional financial systems for businesses and customers. Fintech includes a wide range of technologies, ranging from mobile apps for payments to complex blockchain networks.
So, how does fintech work? To simplify, fintech streamlines financial transactions for businesses and customers, making them more accessible and affordable. For instance, Venmo or Cash App—both examples of fintech products—allow users to send funds directly to their desired accounts at any time of the day, which is highly efficient.
Over the years, fintech has become a growing trend in various industries, including the hospitality industry. Many hospitality businesses have now integrated fintech into their day-to-day operations, resulting in a modernized hospitality industry. In the next section, we have compiled the roles that fintech plays in transforming the industry, which you can read about below!
How Fintech Transforms the Hospitality Industry
Fintech plays an important role for both customers and businesses in the hospitality industry! Here are a few ways how fintech becomes a difference-maker that transforms and takes the industry to a new level.
1. Fintech Modernizes Payment Methods
Fintech modernizes payment methods.
We might be stuck with hasslesome cash payments forever if fintech didn’t exist. Thanks to fintech, the payment process in the hospitality industry has become seamless, allowing customers to pay for their purchases easily using modern methods such as online payment channels in mobile apps. Less hassle, more frictionless travel!
2. Fintech Improves Customer Loyalty
Fintech improves customer loyalty.
It takes a lot for a hospitality business to achieve customer loyalty, let alone retain them. Using fintech will help to gain and improve customer loyalty. One way that can be tried is implementing convertible loyalty points as a payment option; this is more likely to make customers return and repurchase businesses’ services due to their economic benefits!
3. Fintech Reduces Operational Costs
Fintech reduces operational costs.
There are more operational costs that a hospitality business should pay every day. Adopting fintech software as a digital finance solution will reduce businesses’ operational costs and save more time, as it allows businesses to control payments better, secure payment flow, and even avoid fraud!
4. Fintech Attracts and Retains Employees
Fintech results in more engaged workforces.
Employees are the lifeblood of a hospitality business; making sure they are satisfied leads to better customer service and guest experience. The good thing is, fintech benefits can also be perceived by employees in this matter. For instance, the use of fintech software that gives employees instant access to their wages at the end of each shift will lead to a more engaged workforce, as well as great customer service and guest experience!
5. Fintech Manages Risks and Boosts Customer Confidence
Fintech manages risks and boosts customer confidence.
Furthermore, fintech does not exclusively cater to modernized payment preferences; the use of fintech is also able to manage risks and boost customer confidence in purchasing hospitality services. An example is the protection for flights, hotels, or car rentals purchases through policies like refunds for cancellations, which can be found in many hospitality booking apps!
On a scale of 1 to 10, how important do you think fintech’s role to the hospitality industry is? Well, it is safe to say that its existence is one that is paramount to the current hospitality industry. What we will see next is the essential implementation of fintech in the hospitality industry, all of which we have covered just for you!
Fintech Products in the Hospitality Industry
Did you know that some fintech products that we use are also common in the hospitality industry? If you’re interested, you might want to proceed below for some examples of fintech implementations in the hospitality industry.
1. Digital Wallet
Digital wallet.
This fintech product securely stores payment information and passwords in the cloud system. It is a financial transaction application that can be accessed on any connected device, primarily mobile devices. With a digital wallet, you no longer need to carry your cards and cash around!
2. Conversational Commerce
Conversational commerce.
Hospitality businesses can easily interact with their customers using conversational commerce! Conversational commerce enables customers to make reservations, receive personalized recommendations, request support services, and even purchase products through a payment link within the messaging apps used for conversational commerce platforms.
3. Buy Now, Pay Later (BNPL)
Buy now, pay later.
Establishing BNPL as one of the alternative payment methods allows customers to set up a flexible and short-term financing plan. BNPL also makes it easier for hospitality businesses to upsell more expensive packages, as merchants will receive more money per customer with BNPL compared to other payment methods!
4. Open Banking
Open Banking.
Open Banking allows users to securely transfer money between accounts and authorize online payments directly from a banking app or website. Compared to regular transfers, transactions using Open Banking happen within seconds! This offers advantages to both hospitality businesses and customers, as transactions with Open Banking provide a much more seamless experience.
5. Hospitality Finance Software
Hospitality finance software.
Hospitality finance software offers numerous benefits to hospitality businesses. A good hospitality finance software enables businesses to effectively manage their day-to-day finance and accounting functions, including budgeting, forecasting, financial reporting, and cash flow management. Some of the best hospitality finance software options this year include FreshBooks, NetSuite ERP, and more!
Wrapping Up
The combination of finance and technology has proven to be crucial and beneficial to the hospitality industry. Fintech caters to both hospitality customers and businesses, ensuring that every financial aspect between both parties runs seamlessly.
There are many fintech products that we use in our everyday lives that are also common in the current hospitality industry, ranging from digital wallets to hospitality finance software. These innovations are taking the hospitality industry to a whole new level, and it is important for businesses and customers to keep up with them!
If you want to stay ahead of the curve in this regard, we recommend you an exciting way to do it: by joining a hospitality finance internship! At RMC Asia, we offer a variety of internship opportunities beyond finance, thanks to our partnerships with prestigious hotels and resorts across Asia.
Our programs provide participants with the skills, knowledge, and practices they need to become valuable hospitality talents, while also immersing them in unique cultural exchange experiences taking place in Asia’s enticing destinations!
This is your call! Unlock your potential with our internship programs and join our successful participants here.
Recommended: Exploring the Realm of the Finance and Accounting Department in Hotels
