Today’s top trends for startups are launching a fintech startup or app because fintech is popular, consumers are using financial services in large quantities, and new fintech solutions are being quickly adopted.
Globally, nearly 96% of consumers own a smartphone with at least one fintech app. Furthermore, you’ve probably noticed that financial institutions like banks, insurance, and finance companies have already developed apps to help their users streamline their business operations.
In a similar vein, your company can develop and benefit from fintech applications. Therefore, the best time to start a fintech business is still now. We’ve put together a quick guide explaining the process of founding a fintech company.
Understand the fintech rules
Due to their intense regulation, it is crucial to understand the ins and outs of the banking and fintech sectors. Numerous laws, including the General Data Protection Regulation (GDPR), Know Your Customer (KYC), Payment Card Industry Data Security Standard (PCI DSS), and Anti-Money Laundering (AML) policy, govern the industry.
Fintech businesses are subject to jurisdictional regulation by numerous other government financial authorities. Nonetheless, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Commodity Futures Trading Commission (CFTC), and the Consumer Financial Protection Bureau (CFPB) are the leading regulatory bodies.
If you want to start a global startup, you need to understand these laws and how they will impact your company. Generally, to get a fintech project up and running, you must:
- open a startup business bank account;
- connect to different money transfer systems;
- have a network of correspondent banks;
- find a place to store client funds;
- choose a software vendor to make your platform work properly.
Determine your fintech industry niche
You can choose a specific niche for your future fintech startup by asking yourself these questions:
- Which sector of the fintech industry would you like to work in?
- Who are you trying to reach? Is the product intended for a global market, a particular country, region, or demographic?
- Do you intend to start a fintech business locally before expanding internationally?
- What particular experience do you have in this field?
Several of the financial market’s well-liked niches include:
- Investment management;
- Mobile banking;
- International money transfers;
- Advances and loans;
- Blockchain-based solutions;
- Financial products.
3. Examine your fintech rivals
After determining your location and niche, you must research your competitors. Since there are already solutions on the market, your product needs to be distinct and address a particular need in that industry.
Financial services, for instance, is a large market niche, but is there a particular opening you can take advantage of? You can identify an underbanked group and provide assistance to them.
As an alternative, you might enhance the existing rather than adding anything new. Consider mobile banking as an example. Compared to what other companies are doing, you can make it quick and simple with your new product. You can also collaborate with businesses that offer online payments to their target clientele and sell fitness equipment, vacation rentals, beauty parlors, and farm equipment.
4. Assemble a startup group
The two components of fintech, or financial technology, are finance and technology. You might be an expert in finance, but you might not be familiar with technology. Both aspects are crucial. In this situation, outsourcing to a skilled group of technical specialists is advised (offshore developers). A development team that is outsourced can assist you in crafting a distinctive fintech application. This technology partner ought to fit into your budget—it shouldn’t be excessively high or low.
Working with an app development company from a more affordable location with superior technical experts is possible. Together with your in-house team, these offshore financial app developers will develop the software or app at a fair cost.
Select your funding sources
You can raise capital for your fintech startup in a variety of ways. These consist of government support, startup competitions, bank loans, venture capital, business angels, and crowdsourcing, among others.
To ensure the viability of your upcoming startup, you must have a minimum viable product (MVP) that acts as a proof-of-concept.
Develop and enhance the fintech enterprise
A fintech startup’s continued development and improvement is a process that will continue into the future. This covers starting your business, getting off the ground, refining its procedures and goods, incorporating new trends and technologies, and occasionally making adjustments.
The best strategy to lower the risk of entering this crowded and fiercely competitive financial technology market is to start small and keep refining your fintech product.