Financial Technology or “FinTech” has been a popular buzzword in technology circles lately as well as among our agency’s clientele. The merging of the financial service industry and data technologies, FinTech is a rapidly growing phenomenon that is changing the way the world conducts finance and makes payments. Global FinTech funding for new enterprises reached $36 billion in 2016, with payments companies securing a 40% share of those funds. And while this industry shows immense opportunity for newcomers, obstacles for the unassuming FinTech startup are abundant.
Our agency specializes in market entry for FinTech start-ups, and we are often asked by clients how they can best take advantage of the Fintech market potential. If you’re thinking about entering into the FinTech space or in the early stage of building your Fintech company, here are 3 tips to keep in mind to best position yourself to succeed in the “Wild West” of finance.
Start with Top Talent
Deep industry experience in finance is crucial. While outside experience can be a benefit, it is very important that your team possesses solid knowledge about the intricate workings of the finance industry when starting a FinTech enterprise. Banking institutions are heavily regulated, and the finance industry as a whole is highly complex. According to Entrepreneur, “there are few (read as: no) successful tech companies led by individuals with superficial knowledge of their industry.” If you are in the initial stages of building, be sure to recruit and involve the most dynamic financial minds that you can find. The importance of this cannot be stressed enough.
Remain Flexible – Small Changes Have Big Impact
Like every other segment of the start-up sphere, uncertainty and risk of failure are all-too-real threats. Any startup entrepreneur will tell you that having an original idea is simply not enough anymore. It’s a sad-but-sobering reality that most startups will not survive, and this means that up-and-coming Fintech companies need to hone their strategy to cut through the noise.
A major key to success is flexibility. As a FinTech entrepreneur, allow yourself to be comfortable with fine-tuning ideas and processes as you go. Remember that there is a difference between persistence and stubbornness – a leader must be willing to try different angles and adjust to customer demands and industry trends.
According to Bob’s Guide, “Some of today’s most successful digital wealth management companies attempted many business models before they found success. They wrote off big original ideas and they took turns in directions they did not anticipate. Overall, the process required a lot of fine-tuning.” The key take-away – BE AGILE!
Walk the Road Less Traveled
As FinTech gains steam globally, we’re seeing increasing numbers of entrepreneurs entering the race to become the next big FinTech winner – the competition pool is widening and deepening each year. How should you navigate the treacherous waters to success? Be smarter than your competition. Nasdaq recommends focusing on fixing the less-glamourous, more-expensive pain-points for banks and financial institutions rather than pursuing the obvious front-end UI/UX issues.
If you want to stand apart from the pack, focus on solving a technical issue that costs banks billions of dollars yearly. Competition will be more manageable, and you’ll be able to carve out the perfect niche for your business to succeed. There simply aren’t as many entrepreneurs working on highly-technical, less-understood issues of the industry. Nasdaq captures this idea quite succinctly – “Your FinTech company can create more value with less competition by focusing on things that people don’t understand and don’t want to do.”
Should you have any questions, or if you would like information about launching or marketing your FinTech business, please reach out!