North Dakota Ag Connection - Fintech Firms Supporting Farmers Gain Momentum, but Improvements Needed

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Fintech Firms Supporting Farmers Gain Momentum, but Improvements Needed
North Dakota Ag Connection - 06/01/2023

The adoption of fintech solutions within the agricultural sector is gaining traction, offering technology-driven financial solutions for farmers. However, there is still room for improvement, according to American Banker.

Limited presence: Currently, only a few fintech companies are dedicated to agricultural banking, despite the numerous hurdles farmers face when accessing financial services. Challenges include rural locations, relationship-based working practices, and irregular cash flows and expenses.

Technology for customer engagement: Fintechs and banks are leveraging technology to increase their presence in the agriculture industry.

Ag-focused fintechs can collaborate with banks to provide farmers with specialized technology solutions. Some regional banks, such as North Dakota's Bremer Bank, have launched fintech accelerator programs to connect farming clients with fintechs offering farming-specific financial solutions.

Industry players: Fintech firms actively involved in agricultural banking include US-based Tillable, which partners with Evergreen Bank to provide various financial services to farmers. UK-based Oxbury offers lending services and savings accounts tailored to British farmers, while Figured operates in the US, UK, New Zealand, and Australia, providing farmers and advisors with tools for cash flow forecasting, budgeting, and profitability measurement.

Addressing misconceptions: While fintechs are making progress in developing agricultural financial solutions, some inaccurate assumptions about the industry persist.

A common misconception is that farmers are less technologically savvy and financially literate than the general population. However, today's farmers rely on advanced technology tools, and many possess higher education degrees in agriculture.

Financial solutions tailored to farmers should go beyond repurposed consumer or corporate tools. Fintechs and banks seeking to cater to the agricultural sector must fully understand farmers' financial needs and develop efficient and relevant tools to meet them.

In summary, fintech firms supporting farmers are making headway in providing agriculture-focused financial solutions. However, there is a need for continued development and a better understanding of farmers' unique requirements to deliver effective and tailored services.

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