Why is Fintech Exciting? Why is Fintech so popular these days? Is Fintech Safe? At some point you came across these questions. As a new comer, it is very difficult to explore this industry. Also, not easy to answer above-mentioned questions. Thus, we are going to put some light on the successful Fintech.
FinTech, short for financial technology. It is an umbrella term for the application of innovative technological concepts. Both on products and services in the financial industry. The past few years have seen catapulting advances made in the new sector.
Whereby the future will characterize the technologies like blockchain and open banking. Since fintech services often tend to be faster, more cost-efficient, and straightforward. So, they are popular among startups and new companies. Which are looking for quick but effective solutions to their everyday operations.
Contrary to the popular misconception, it is not new companies that offer fintech solutions. Traditional banks can also incorporate fintech services in their portfolios. So, what makes fintech successful? How come it continues to garner everyone’s favors. Even though disruptive tech is usually met with resistance?
Any attempt at developing a fintech product or service requires one expertise. It can be in at least three areas of work: finance, up-to-date tech, and business sense.
Part of the reason fintech is so successful. It’s because of propensity to target consumer needs in an accurate manner. They often do so by ‘disaggregating’ the services. Also, the products offered by traditional banks and upgrading them using disruptive technologies.
Targeting the exact pain points and frustrations. Which the consumers have with existing financial services. In fact, requires a well-informed and thorough overview of the finance industry. It links with the micro and macro economies at a local and global scale. Also, it further demands a keen understanding of finances. It conceives what are the financial services & products and individuals desire in business.
Successful fintech companies bring their research and insight to fruition. They bring them together through the expertise of good engineers and developers. The products and services require an excellent grasp of programming. Such as Front-End & Back-End software development.
Moreover, a comprehensive knowledge of artificial intelligence (AI) and Blockchain technologies. Engineers and developers need to be able to work with features. Such as cybersecurity, fraud detection, data automation, cloud-based services, and other associated technologies.
Companies like Gaper offers curated and vetted engineering. Also, provides development teams for fintech clients. Who places a particular focus on Python, Java, JavaScript, C++, MATLAB, and other languages? Those are essential to creating analytic tools, quant tools, and pricing models. Moreover, they are proficient in dealing with a high volume of data in a time-efficient manner.
The aforementioned qualities are brought together in a productive manner. Also, incorporating a judicious sense of conducting business. Despite this highly volatile, unpredictable, and competitive industry.
Being aware of the latest news and trends won’t be of much use. If one is not able to glean relevant market information. Also, not even able to identify opportunities to address through their business. Similarly, having a business plan is also not very useful. If the team of people working on the company’s projects is a right fit for the company’s goals and objectives. A successful fintech is driven by smart business management.
In executing this rather daunting task. Fintech business owners and entrepreneurs need to be cautious of the demand. Such as dynamics from the customer segment, as well as the needs of their own business. This is the way a successful Fintech startup grows.
In the post-pandemic world that we are in, it is imprudent to stick to the ‘old normal’. Which has been dramatically disrupted by global lockdowns. These have in turn paved way for new and in most cases more efficient means of doing work.
This has opened up a vast pool of skilled experts. Which companies can now hire from without any geographical barriers? Coursera’s Global Skills Report sheds more light on this. The insights are highlighting how different countries have different kinds of trending skills.
Some are ‘cutting edge’ in the fields of AI and data science, while others are more business-oriented. Some lead in Java expertise while others excel in Python. The cherry on top is that remote and distributed teams also work efficiently.
To reiterate the above through a different lens. Fintech becomes successful when they minimize their costs. While maximizing the utility they get from their resources.
Hiring in itself is a time-consuming task. Yet, add the extra tasks of testing, and vetting technical experts. Also, the whole process turns into an ordeal.
Hiring remote developers and engineers with relevant experiences is a source of relief. Companies skip hiring, training, and managing tasks. While still working on a full-time, permanent basis with vetted engineers.
Business models with distributed teams are also taken into account. Peripheral jobs, legal compliance, payroll, business development, and other aspects of hiring remotely. Good companies evaluate these areas thoroughly. Lest they end up spreading their already scarce resources too thinly.
Remote hiring also creates a more even playing field for new businesses. Gone were the days when competent developers will crowd up in Silicon Valley or tech hubs. While other smaller businesses struggled to put together a decent tech team. It can be due to costs or logistic factors.
According to Medici, 90% of fintech startups do not succeed in getting past the seed stage. The reason is the risk-averse nature of most investors. Those who prefer companies with more experience.
Luc Gueriane, CCO at Moorwand, a payment solutions provider, remarked in an interview. “The pandemic has taken a lot of companies to new heights. especially those in digital payments. Yet, it is now more challenging to access funding. Unless you’re an established brand. Those who have already proved themselves. Or you have a very specific solution that addresses a small but important problem in the market.”
Successful FinTech’s secure themselves. Against uncertainty and other challenges through adaptable and flexible business models. Models, which do not entail burning money. Those are the ones chosen by owners.
Whether this means transforming the way they hire their engineers. Or the way they collaborate with other fintech. Or traditional banks are for the business owner to decide. Oliver Holle, managing partner at Speedinvest. He listed the three major mistakes that bedevil the business life of fintech:
There are one too many debates among economics majors. Such as, whether supply drives demand or demand drives supply. In the fintech industry, a fusion of both drives the sector forward.
The B2C and B2B markets are often at the forefront. They are constantly determining what is already outdated. Also, what innovations need more working on it. This is in contrast to the pre-fintech times. When traditional banks had a stronger decision-making power in what services.
More business-centric countries will see a greater demand for innovative financial services. Since consumers, i.e., businesses and individuals, in those areas would be more aware. Further, the tech-savvy with regard to trying out new tech services. Traditional banks also have a major role to play here.
A lot of major banking giants are looking towards collaborations with fintech companies. They want to upgrade and update their service offerings for their customers. Changes in regulatory policies, means the fintech companies are open to broadening service. They are creating product portfolios into more innovative realms.
The COVID-19 pandemic has acted as another catalyst. It boosted the demand for digital services in finance. With a drastic drop in mobility and physical interactions. Businesses and individual consumers needed more immediate financial services. Which is using, in fact, through the internet.
There are exceptions to these trends in countries like Japan. For example, where regulations and other market is dynamic. It means that FinTech’s are not as popular there as other financial hubs.
The adoption of fintech services increased from 15% in 2015 to 64% in 2019. Yet, FinTech is still have a long way to go if they are to achieve the stature of traditional banks. Many fail to establish a strong customer base and end up shifting to a B2B & B2C business model.
However, successful FinTech have cemented their place in the finance world. It is introducing consumers to innovative and higher standards of managing their money. Fintech experts who participated in a webinar on the future of fintech. Actually, noted that traditional banks and fintech may not be in competition.
Where the decades of experience lend them the capability to deploy features. The latter is able to bring cutting-edge innovation. Also, technologically driven solutions to the table are in sync with the times we live in.
Without dismissing the incontrovertible importance of regulations and traditional banks. Successful FinTech’s will ultimately be those companies that make smart in-house decisions. From hiring to product development, fintech will take all kinds of decisions.
Fintech is keeping financial institutions, customers, business trends, and work practices in mind. Not only that, but they must also protect themselves from any economic uncertainty. Through flexibility business practices. Which may entail hiring remote developer teams. Also, collaborating with a bank or adapting to the business environment requires.
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