Date: 4 November 2021
Author: Lyle Solomon
Technologies have revolutionized everything from agriculture to healthcare to logistics and economics. It’s fascinating to watch how quickly FinTech has risen to become another fastest-growing industry in the digital world. The financial sector’s ability to address customers’ financial demands has improved because of advances in technology.
According to a PwC survey, 88% of major, well-established financial firms (incumbents) believe that independent financial technology (FinTech) startups pose a threat to a portion of their business.
The FinTech environment is vast, but understanding the general trends and studying from those who have gone before you will make the pathway to success more visible. They’re wreaking havoc in the financial services industry by tackling previously undiscovered consumer problem areas such as payments, insurance, lending, cryptocurrencies, investing, and risk management.
Starting a successful FinTech firm is not rocket science. You have to concentrate on the audience’s specific needs and keep their demands in mind. This piece will give aspiring entrepreneurs a guide on how to break into the FinTech industry.
1. Achieve a thorough understanding of the rules and regulations
Since this is a highly regulated sector, you must be familiar with the rules that govern this complicated environment. Regulatory agencies, legal laws, and requirements all come into play here.
Since the GDPR was implemented, it has become increasingly necessary to understand regulations. Rules such as general data protection, anti-money laundering policies, customer KYC compliance requirements, and PCI DSS compliance require attention.
Take everything into consideration before you begin because laws vary from country to country and even state to state. Those who want to create a FinTech company must adapt to these restrictions and apply for licenses.
2. Figure out which niche you’re in
Another crucial factor in determining how to get engaged in FinTech is selecting your niche within the business. You can do this by considering a few factors, such as the country, location, or product you want to target.
Also, one of the criteria that helps you choose the proper niche for the FinTech firm is your specific expertise in the field. Lending, Mobile Banking, Investment Management, Loans, Money Transfers, and other financial industries are common niches.
3. Recognize your motivation and trust in yourself
It might take years until you produce enough revenue to make your business self-sustaining. You’ll need to persuade venture capitalists that your business will succeed since they’ll be the ones who will fund your business until it does.
Everyone around you might assume that you’re ruining your life, resources, and some precious time altogether. Their anxiety isn’t entirely unfounded; after all, approximately 90% of startups fail before flourishing. As a result, new entrepreneurs often find themselves in debt problems and end up consolidating unsecured debt burden.
How do you get through it all? Simple. You’ll have to trust it’ll work, even if it makes other people think you’re insane. You’ll be competing against incumbents who have significant resources and knowledge. However, if you sincerely believe your idea can vastly improve your industry, you will find the drive to see it through.
4. Consider testing and learning
When you first introduce a product or service, it will never be flawless. And trust me, it’s never been done before. With this in mind, you must test your product regularly and adapt from your results.
Ask for feedback from people, especially strangers, rather than family and friends. Strangers are more inclined to say exactly what they think since they are not overly concerned with your feelings. You should actively seek out opposing viewpoints. Finding out critical feedback about the root cause can help you solve the problem.
You must accept harsh feedback on your FinTech startup, provided the feedback is genuine. Criticism makes things perfect. The earlier you start, the better. That’s because the deeper you stay on a coding route, the more difficult it is to change your mind. You don’t want to wait several years to master something that could have been learned in months.
In the worst-case scenario, you’ll collapse before you get there.
5. Focus on your competitors
The next step is to keep an eye on your competitors and analyze them properly. Because so many businesses on the market offer the same solution, make sure your product is one-of-a-kind. And doing competitor analysis is the key.
Finance is a big industry, and you should’ve come up with a solution that sets you apart from the competition. You may have products or services close to others, but the grade should be higher. You should make your product or service quick and user-friendly using innovative technology solutions. This way, you may be a part of the FinTech industry and explore the prospects and potential.
With this unique concept, you can choose the most practical solution for your new business. A creative solution will help you win over your target audience and outperform the competition.
6. Pay attention to your customers
FinTech does not demand a solid technical or financial background. This business involves a wide range of services. Focusing strongly on identifying and meeting customer needs, you can think creatively and perform even better without having specialized financial expertise!
I would suggest you become as much consumer-focused as possible. Listen to your customers carefully, identify their needs, and then make your decision.
7. Establish a foundation of trust
Operating in the FinTech industry is both thrilling and challenging. It’s critical to remain consumer-focused in the age of digital-native banks. Great user experience and staying updated with industry innovations would help you gain new clients and persuade those who are still unconvinced.
You must also ensure that you are on top when it comes to security and legal concerns. Your clients should feel safer while using your product or service. Be strict about your privacy policies and associated business laws. While releasing new features, keep in mind that you must build trust between your product and its consumers.
Lyle Solomon has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California. He has contributed to publications such as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue, and many more.
More individuals are using fintech services, so you need to seize this opportunity and stand out from your competition. To innovate, upskill, and grow your organisation, check out FINTECH Circle:
- Our Scale up Programme can help your startup identify a USP, expand sales internationally and take the company to the next level
- Ready to connect with other fintech entrepreneurs, business leaders and investors building the fintech world of tomorrow? Join our startup community!
- Looking for early-stage investment? Apply for funding through our Investor Network!
- Our insights, resources, and fintech news will help your business navigate through this ever-evolving industry