It’s boom time for fintech. The market is enjoying a huge wave of interest and new products are being launched constantly, many of which are transforming the way businesses and consumers think about finance.
But the market isn’t flooded yet. Do you have an exciting idea for a new fintech product? There couldn’t be a better time to launch it - but starting, developing, and launching a fintech product can be a challenge. We’ve compiled some of the top issues to consider before launching your fintech startup.
Do you have a fintech product?
The most important consideration: do you have something that you can sell? Fintech is a huge growth area, and there have been many cases of startups launching without a clear idea of what it is that they are actually offering. Before launching your fintech startup you need to think carefully about your proposition. What is it that you are offering, how will it solve a customer or client problem, and how can you make sure that your product fits the market’s needs best?
Is there a market for your fintech startup?
Just as important is a clear-eyed and honest assessment of the market. Market research is, of course, a necessity for every startup, but there is at least one area that is very specific to fintech: existing consumer behaviours. If your product requires a shift in consumer (or business) behaviour in order to achieve takeup, how are you going to secure this? This was perhaps the most important challenge faced by the first generation of challenger banks, who had to persuade consumers that they should trust startups and shift their money away from trusted legacy institutions. This was harder than many anticipated, and some failed along the way.
What is the regulatory situation?
The regulatory landscape is an absolutely crucial consideration for any fintech startup. You need to understand the regulations that will apply to your business in every territory in which it operates. Regulatory obligations can be stringent and burdensome, but the costs of noncompliance are extremely severe.
It’s important to build the right team around your fintech startup, and compliance should be at the very heart of that. Every successful fintech startup has solid expertise in the legal and regulatory landscape, and more often than not this requires hiring in specific talent. If you’re looking to operate in the US, you can also check out our quick-start guide to fintech regulations in the US.
Do you have the right team?
Talent is key not only in compliance but also throughout your organisation. Many fintech founders have great expertise in either finance or tech, but often not in both. Ensuring that you have a well-balanced team that can fill in the gaps in your knowledge is crucial, especially at the early stages. As you grow, you’ll also need to fulfil additional ancillary roles such as customer support, and again you’ll need to find the right people to carry out these customer-facing tasks.
Team augmentation is a growing trend in fintech. This technique allows you to embed third-party consultancies into your existing teams, giving you the flexibility of a contracting relationship and the knowledge that you’re getting the most up-to-date expertise. Team augmentation is especially popular for development tasks, and DashDevs is a leader in this field.
Who can you partner with?
Partnerships are the foundation of many fintechs. Depending on your niche, it is likely that you will need to build partnerships and service relationships with several different partners. For example, if you’re a challenger bank or e-money provider you may have to partner with a banking institution.
The right choice of partner can be a make or break decision for a fintech. Make sure you scope out your requirements carefully, and choose a partner based not only on your immediate needs but also on your predicted requirements in a few years’ time.
How will you fund your fintech?
Funding is another crucial consideration. Fintech can be an expensive business, and it’s not an obvious choice for startups on a shoestring. It’s likely, therefore, that you will be looking for funding.
Luckily, the investment landscape for fintechs is very favourable. The fintech boom is continuing, and investors are looking for great products. The flipside, however, is that competition for investor dollars is fierce, and backers will only be looking for truly paradigm-shifting products, or those that meet a really significant customer need. You need to make sure that your product is as appealing as possible before making an approach.
It’s also important to think about funding from a long-term perspective. While money in the bank is key, you should also be considering finding funding partners who are aligned with your goals and ethos, and who will stick with you for the long haul.
How will you build your fintech product?
Finally, the most important question: how will you build it? As we’ve just explored, fintech development can be expensive, especially when it is carried out in-house. Recruiting the talent you need, training them, providing the necessary systems and software, and meeting additional costs such as perks and employee taxes can be extremely costly.
However, this isn’t the only way to develop a fintech app. We’ve already talked about team augmentation, and this remains a highly effective strategy for fintech app development. By contracting with a dedicated fintech consultancy such as DashDevs, you can secure the services of a highly knowledgeable team that will embed within your organisation. Your fintech startup gets the best possible expertise, without you having to foot the bills associated with full-time employees. Training, software, and other costs are all borne by the consultancy, freeing up your budget to be spent in other areas.
DashDevs is one of the leading dedicated fintech consultancies in the world. We can help you take your fintech app idea from inception to delivery in the most cost-effective and timely manner possible. Get in touch today.