Baby Steps To Build A Successful Fintech Startup

Most people have heard of the term “fintech,” but what exactly is it? Fintech is a term used to describe a wide range of companies that provide financial products and services using technology. Some of the most well-known fintech companies in the world include Venmo, PayPal, and Square.

A Fintech startup is usually a tech company that is closely related to the financial industry and founded by an experienced tech entrepreneur. Fintech startups, also known as “B2C” startups, can take a wide variety of forms and have many different business models, such as B2B SaaS, B2B eCommerce, and B2C eCommerce. In both cases, the product can be an online service, an application, a mobile app, or a combination.

So, is it too hard to start a Fintech company? Not if you have a unique Fintech startup business plan and a team of experts. I have broken down the Fintech start creation process into a few basic steps. And to make it easy to wrap your head around, I have also used simple terms. Now, all you need is to read attentively, and you will know what the key elements are and how to start a Fintech company strategically. 

Baby steps for a Fintech startup to avoid difficulties later

1). Make regulations a priority 

Starting a new business is hard enough without dealing with regulations, red tape, and bureaucracy. However, the more you know about regulations, the better prepared you will be to navigate the landscape as a fintech entrepreneur. 

Understanding the regulations that affect your Fintech is crucial if you want to build a successful fintech startup. The regulations are also often the first things investors look at when deciding whether to invest in a fintech startup. 

Since Finance is a regulated industry, you must comply with additional laws and the General Data protection regulation. This policy is just the tip of the iceberg for finance companies. Noteworthy, what regulations a Fintech should comply with vary depending on your location, given compliances differ country-to-country and somewhere even state to state. 

For example, Fintech regulations in the U.S. require you to adhere to their anti-money laundering (AML) policies, PSI Data Security Standard, as well as Know Your Customer (KYC). That’s not all. You may also require to operate digital certificates and other applicable standard authorization mechanisms.

Therefore, before anything, you must understand what documents you need to proceed with to avoid any legal issues later. That can badly harm your reputation.

2). Identify your niche market

A niche market can help your Fintech to grow faster. If you want to create a global brand, you have to start small. For example, you launch a global Fintech company and spend a lot of bucks on developing and marketing various finance products. You are not funded yet. After some time, you find out your audience doesn’t need half of your products. And now you are in deep water. 

On the other hand, a niche market can provide a competitive advantage for a specific business. It requires focusing on a particular type of customer, which can, in turn, help a company tap into a specific demographic. Simply put, if you choose a niche, you can easily find your target customers earlier and reach them better with fewer resources without spending your fortune. So, climbing the ladder one step at a time is always better. 

And when you master one niche, there is no one stopping you from pursuing others. But remember, one at a time.

• For example, here are some most popular Fintech niches:
• Payments apps & international money transfers
• Money lending & personal finance management
• Mobile banking (Neo Banking)
• Trading and investments
• Insuretech (Insurance + Technology)
• Crowdfunding platforms
• Financial products for SMEs, e.g., accounting or tax services
• Cryptocurrencies and blockchain-based solutions

3). Create your USP

Once you find an ideal niche to target, you need to create your unique selling proposition. A USP of your financial service/product should help you grab your audience’s attention in a fraction of a second. In addition to that, it is something that distinguishes your brand from the competitors in the market.

Hence, you need to conduct competitive research and study problems customers face with existing solutions. This way, you can easily find a pain point to alleviate through your unique proposition. For example, Robinhood makes investing in the financial market accessible and friendly for newcomers and experts alike. On the other hand, Mint makes personal finance management easier.

Down the line, it is always customer convenience and satisfaction at the center. So, what does your Fintech simplify? 

4). Get your founding team together

 A strong and agile team is a vital ingredient of a successful startup. Be careful in hiring a team for your Fintech – it isn’t easy to know who will be a good fit for the company over the long term. That is why creating and maintaining a full-time team of Fintech developers might be challenging and costly. Not to mention, experienced developers are often not budget-friendly.

Alternative? The best option for startups is to outsource the project or hire a dedicated Fintech software development team offshore. For example, outsourcing software companies from India offer a great talent pool of experienced developers at very cost effective rates.

5). Finalize your technology stack

Being a Fintech startup, you have to research and rely only on robust technologies to create your heavy-weight financial products. More often than not, off-shelf solutions cannot tick all the boxes of your Fintech product requirements. 

That said, custom software development is the optimum solution. You can consult with top Fintech software development companies during the research. And choose the right programming language, frameworks, and tools to achieve all your desired functionality with slick UI/UX.

Here are some efficient technology used by many Fintech companies:

Programming languages:

1. C/C++,
2. Python,
3. Javascript,
4. Java, 
5. Ruby

Frameworks:

1. Node.js,
2. React,
3. Django, and 
4. Spring

Databases:

1. MySQL,
2. MongoDB,
3. Redis, 
4. PostgreSQL

Get funded 

Fintech startups have many ways to get funds. For example, you can bootstrap or ask friends or family during the initial stage or as long as you can go like Backbase; You can get a loan from a bank; You can use crowdfunding or approach venture capital (too hard but worth it if your idea is real savage).

Nevertheless, whatever path you take to fund your startup, ensure you have something to show your potential investors. They must clearly know what they are getting their money into, right? Therefore, you should have a concrete plan or a visual prototype of your product that can prompt investors to invest.

Take your idea off now!

So, when your idea gets approval and funds, you should execute and put its first version into the market. This version typically contains basic functionality. The motive behind releasing a basic version of your Fintech product is to collect feedback from real customers and validate its feasibility in the market.

And as you start receiving reviews, you can keep improving the final version of your Fintech product. That is the best way to keep looking for areas you need to strengthen and gain a competitive advantage. 

I hope you find these steps helpful to jump-start and thrive your Fintech business journey easily. Can’t wait to see your Fintech products growing! Best of luck.