How to Scale Fintech Internationally

Constant scaling is how a fintech startup manages to keep up with the tempo in the industry. Going global is probably the most challenging part of the scaling strategy and must be approached wisely. But answer yourself: are you willing to put an effort and investment into scaling to potentially multiply your revenue? If so, this article can your your starting point.

South America, Asia, and Europe are home to the 10 biggest fintech hubs. Do your startup have what it takes to conquer them all?

In this article, you’ll find out more about the significance of scaling, learn a step-by-step guide on how to scale internationally, and review common challenges associated with scaling.

Why Is It Important to Scale a Fintech Startup Internationally

Fintech, as a global domain, is now experiencing a hard time as we enter a period of a new major financial institution crisis. With remnants of a previous shock, after COVID-19 initiated issues, the fintech industry gained what was lost, only to be forced to pivot down again.

However, things are looking bright with the recent expert market research stating that the fintechs market will be able to attain $492 billion by 2028. So, growth is to be expected, and fintech hubs are trying to attract more startups to accelerate the market’s digital transformation.

But why is it important to scale a fintech start up? Scaling has its benefits for business, and it tends to be even more visible with finance technology businesses. So, let’s break them down one by one to figure out why scaling can improve your firm.

The Benefits of Fintech Scaling for Startups

Now, let’s review concrete reasons for a fintech to proceed with internationally scaling sooner or later in its lifecycle:

• Enhanced efficiency and network

If you achieve a certain level of scalability, you will ensure that your business can operate in any circumstances. Scaling internationally allows you to omit local crises and adapt to new conditions much faster. Aside from this, you attract more investors, global or local, and help your firm be a part of a much larger scene. Not to mention that your customer base will grow rapidly if you handle the scaling process right.

• Competition

This is controversial, but scaling can improve your competitive edge. Being present in different markets means you have more firms to compete with, but enrolling in a global market takes you to a different level. You no longer compete with local businesses. Now your competitors are more advanced, and your company’s fintech business plan has to advance accordingly.

• Longevity

With entering a global scene, you now have more options to survive the highs and lows of the industry. More customers and streamlined omnichannel operations allow you to ride the wave even in crises because when the industry fails at one hub, it still holds at the other. For example, in 2024, payment processor companies like Stripe and Square are thriving despite many others facing crises.

• Data Insights and Innovation

Scaling brings about the opportunity to collect and analyze a vast array of data from different markets. These insights are crucial for understanding customer behaviors, identifying market trends, and evaluating product performance across regions. As a result, fintech firms can drive innovation, tailor their services more precisely, and stay ahead in the financial technology sector.

• Diversification of revenue streams

By entering various international markets, fintech companies can diversify their revenue streams, reducing their dependence on a single market or customer segment. This diversification is key to financial stability, protecting the company from localized economic downturns or regulatory changes. Additionally, a presence in multiple markets allows firms to capitalize on various growth opportunities.

Step-by-Step Guide How to Scale a Fintech Startup Internationally

So, you know that scaling is beneficial, and it’s time to create a scalability fintech startup business plan finally. Scalability planning starts when you only grow your idea, planning the software architecture. Then, after you have customers’ feedback and a wider understanding of the market demand, it is safe to start the journey.

As a company with over 12 years of experience in fintech product development, we’ve seen both highs and lows of scalability plans. And now, we’re sharing this experience with you.

#1 Have a Clear Perception of Your Resources

Scalability often seems like a win-or-lose type of situation when it is more like smart betting. The fintech market now has 48 unicorns, sharing more than $187 billion. To make a good gamble like they did, you must access the data you have on hand and compose an assessment based on your knowledge.

In terms of fintech scalability, you have to access your resources clearly and objectively. Here’s the general plan you can follow:

• Finances. Evaluate the reliability of your investors and the continuity of your financing. Budget forms a steady ground you need to scale.
• Technical capabilities. Access infrastructure, computation power, and other resources needed for scaling and compare them with the assigned budget. You would need to modernize your product to scale, and thus, the investment will be heavier.
• Human resources. Make sure you’re clear with your team about the future company’s fintech business plan, and they are on the same page with you. Expand the team as you scale according to the business needs, don’t try to bite more than you can chew.

One more important step during the resource assessment is to adjust fintech metrics to help you figure out the effectiveness of scaling. Here are a few KPIs we recommend you take a look at.

#2 Mitigate the Risks

As your startup becomes a growing fintech, you will encounter more challenges and risks, both financial and non-financial. Fintechs and challenger banks might face increased regulatory scrutiny, so it’s important to consult with third-party agencies to ensure compliance with the country’s legal requirements for banking.

Aside from this, the greatest pillar of the success of fintech for startups is enhanced security measures. Statistics reveal that up to 98% of fintech companies worldwide are vulnerable to cybersecurity attacks. Data security is a top concern for 70% of banks. So, the risks of getting involved in cybersecurity incidents are peaking.

So, giving your users advanced security measures is not a competitive leverage but a must for quality scaling. Here are some measures you can take to ensure your users and their data are saved from fraud:

• Two-factor authentication
• Data encryption
• Role-based access
• Tokenization
• Systematic logs and security testing

One of the most important take-ups for risk mitigation is scalable architecture, which you plan and create in the initial stages of the development process. Talk to your software provider to ensure they know of your scaling plans, and there you have it–one successfully passed milestone.

#3 Enhance Customer Experience and Engagement

Scaling is not only about being present across the globe but also about having more customers. So, it’s all about finding a balance between new customer acquisition and retention of the existing ones. Here’s how you strategy for customer experience enhance

• Acquisition and retention balance. Aim for harmony between attracting new customers and keeping the current ones satisfied, which is essential for sustainable growth.
• Value for existing customers. Highlight how current services benefit existing customers, crucial for leveraging growth and maintaining a competitive edge.
• Engage stakeholders and first adopters. Use the support of early users and stakeholders to boost growth and attract new audiences with improved offerings.
• Gamification. Introduce badges and rewards for regular use of services, such as making payments or maintaining usage streaks, to make financial management engaging.
• Innovative technology. Apply AI and machine learning for personalized advice and to refine user experiences, using data to tailor financial solutions effectively.

Implement the listed solution wisely, keeping your budget constraints and other priorities in mind.

#4 Automate

Data analytics is a hit in the fintech sector, with a CAGR of 11.57%. Artificial intelligence didn’t go far from it, with chatbots for customer support that drastically saved time and budget. Automation can do most of the manual work with the same or even increased effectiveness, and in scaling conditions, it can dramatically improve workflow efficiency.

Implementing CRM solutions is one of the best ways for fintech startups to use automation services. It correlates with the previous paragraph since CRM can increase customer satisfaction and gather feedback to help you improve your software.

#5 Set the Stage for International Scaling

If you wish to know how to scale a fintech startup, here’s the short answer: be ready to explore and research. The first concern yours has to be regulatory compliance with the licensees for banking. Some large companies, such as Revolut, are still struggling to get much-needed regulations to operate fully in the selected territories. With respect to your needs for international scaling, you can be advised to:

• Establish the process of smooth international payments. This includes implementing cross-border payment processing and ensuring that your software has multilingual support. Don’t try to cut language costs, as it will affect the customer’s satisfaction.
• Analyze your audience and give them what covers their pains the most. For example, Wahed, a halal investment platform, recently scaled to the UK by opening a physical bank on Baker Street. They are sure of the high customer acquisition since they assessed their target audience in the United Kingdom and reckoned that Muslim customers would rather trust a traditional bank with a physical office than an online-only institution.

With these strategies in hand, you now have a clearer roadmap for scaling your fintech startup. However, scaling comes with its own set of challenges. Leveraging the experience of a trusted fintech development agency ensures a smoother scaling process for your venture.

The Challenges In Fintech Scaling

Entrepreneurs are worried about the low investment rates, offline bank departure, and other objectionable market conditions. However, if you can face those challenges and come out of the water dry, your startup will most likely pivot like a rose on the concrete. So, what obstacles might you face, and how do you fight them? Let’s uncover it below.

#1 Security-Related Issues

We’ve already discussed security as one of the most crucial aspects to pay attention to during the scaling process. So, it’s important to note that many key industry stakeholders consider security a top priority for their company.

Covering the topic in more detail, we have to mention the specific problems companies are likely to face in 2024 and beyond.

1. Cloud computing issues. A new technology adoption could bring more problems with it since, along with obvious benefits like enhanced speed, accessibility, and scalability, the cloud is a large data pool, which makes it a perfect target for cyber attackers.
   
   It doesn’t mean you cannot use beneficial cloud computing for your business, especially given how good it is for scalability; just be more attentive to your options. Choose a reliable provider with up-to-date technology and strong security guarantees.
2. Malware attacks. Ransomware attacks didn’t seize with time. On the contrary, they became even more of an issue. The annual number of malware attacks amounts to 5.5 billion. And the reason why they still stand so tall is that no one can mitigate human error. They have multiple entry points, and all it really takes for a malware attack to happen is one careless click on a link or email from an unknown address.
   
   So, how to scale a startup business with such risks at hand? The answer is easy enough: automate the processes. Install automated malware detection software to protect your information from leaking to the web, and use data backups to recover quickly.
3. Identity theft. Imagine this: any password your customer uses can be hacked. Even biometrics isn’t a safe enough option since it can be replicated.
   
   How can you protect your customers when you scale and play on the bigger market? Use what corporations have been using for ages: double or triple-entry gateways. Implement double authentication and treat it as a must not only for competitive leverage but also for your customers’ sensitive data protection.

#2 Accessibility Issues

One of the challenges that are often overlooked is the accessibility of fintech applications for different users. The world is becoming more inclusive, which is undoubtedly a miraculous tendency; however, you must also make sure that you participate in it.

When developing an application UI, make sure that it works well on any screen, as the country you might scale your startup to might have more Android users with all kinds of devices. Aside from this, ensure that sight-impaired people can access the text and that the application is easy to use for everyone, including people with disabilities.

#3 Monetization

People of all ages and financial statuses use fintech software. Everyone can use online banking or use applications like Venmo for money transfers. So, when thinking about monetization options for your scalable software, add options for different users with different financial capabilities.

If you’re adding a subscription model, add several options with various features available. If you’re more inclined to add transaction fees, use beneficial terms to make your app more attractive to end customers.

Conclusion

To figure out how to scale a fintech, you will have to undergo some challenges we didn’t mention in the article. To be honest, the scalability process is different for each startup, and each idea behind it, and this article only scratches the surface of an iceberg.

There is a lot to figure out and a lot to do and understand to succeed, but the chances are great if you have a reliable technical partner beside you. If scalability is what you plan for your business, contact DashDevs, and together, we will find a way for you to withstand any obstacles.

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