Our daily routines are increasingly being conducted digitally through apps, such as payments and banking. People must use their laptops and smartphones to perform their daily tasks. Using an app, you can manage your finances, trade cryptocurrencies, and even invest in international businesses. You will have more audience than a traditional financial institution if you start a fintech company.
After the pandemic, digital payments gained even more attention. The global fintech market size reached $110.57 billion by 2020. It is forecast to reach $698.48 by 2030 at a CAGR of 20.3%. In the last two years, the number of fintech startups tripled because fintech apps are gaining traction at such a rapid rate. A partnership with fintech startups was considered an important opportunity by almost 70% of senior bank executives in 2018.
As a result, investments in fintech have also increased. By 2021, they reached $226.7 billion.
Get in touch with us if you’d like to build an effective business plan for your fintech startup.
Fintech startups transform the industry
In this article, we will take a look at a few companies that are doing well on their niche market.
Nine rounds of funding were raised by Stripe for $478.7M in online payments.
Five rounds of funding raised about $31 million for Mint, which deals with personal finance management.
An American legend
A total of $539M was raised in five rounds of funding for its investment and trading activities.
In eight rounds, Coinbase has raised $225.3M in funding for its digital currency exchange.
It has raised $1.7B in seven rounds of funding and operates as a ‘neobank’.
Let’s examine the steps required to create a fintech startup now that we have seen the successful fintech startups.
What does it take to start a fintech company?
It is imperative to consider the importance of financial resilience when building a fintech startup. We will now look at the steps you need to take to launch a financial technology startup. This helps combat the increasing complexity of financial regulations and systems.
Regulations must be known
There is a great deal of regulation in the banking and fintech industries, so you have to be familiar with every aspect of this very complex industry, from the governing bodies to the rules and regulations to the criteria.
Companies who interact with client data must comply with the General Data Protection Regulation (GDPR). However, this policy is only the beginning for businesses in the finance sector. In the US, fintech regulations typically include anti-money laundering (AML) guidelines, Know Your Customer (KYC) compliance standards, and PCI DSS compliance. Digital certificates might also be required for authentication.
Everywhere there is money, there are laws and regulations. To ensure that your customers’ money and their identities are reliably protected, make sure your proposal complies with existing laws before you begin any work. Establish regular legal auditing practices to prevent compliance issues from developing.
Be careful when choosing a niche
The demand for fintech software is on the rise, with the fastest-growing market categories being digital payments, personal finance management, and alternative financing, along with a significant increase in the use of investment solutions.
Consider the following fintech subdomains:
- Investment management
- Personal finance management
- Global money transfers
- Loans and advances
- Bitcoin and blockchain-based technologies
Your product can target a specific audience, such as a particular nation or demographic, based on the subdomain you choose. Starting your business locally and expanding globally is advisable.
If you’re interested in capitalizing on the growing demand for fintech software, we can help. Contact us to learn more.
Gain an advantage over your competitors
It can be helpful to research your competitors once you have chosen a niche. Finding out what makes your product unique and different from similar products already on the market can help you to identify your unique selling point.
It might be an entirely new product (for instance, a financial service for the unbanked) or a revision to an already excellent service (for instance, a fast and simple mobile banking app).
While fintech appears to have tremendous potential, the market is dominated by well-known companies like Microsoft as well as a number of extraordinarily profitable companies (like Stripe and Coinbase). If you want to succeed in the fintech industry, you should stake your idea on flawless execution.
The right people will help you build a successful team
In order to have a successful company, you need the right people on your team. But if your area has a limited talent pool, it can be difficult to attract developers.
Developing an effective solution within a constrained timeframe requires technical and financial knowledge from your team. It is important that your partner development company has a track record of creating effective startup solutions. Consider outsourcing your development tasks to a reputable software development firm like Revinfotech.
Protecting data should be a top priority
As a fintech startup, you should make sure your business is secure and that all important data is encrypted and stored in the cloud. In the event of fintech security breaches, sensitive information could be disclosed that could be used for fraud or theft.
To ensure your company’s top-notch fintech cyber security, run thorough tests to identify any vulnerabilities. Secure your client’s information using HTTPS SSL certificates and transport layer security (TLS) on all network connections.
It is also possible to use a cloud platform like Amazon Web Services (AWS). You can put in place multi-step authentication and have users use strong, frequently changing passwords on the client’s end. It provides a strong defense against DDoS attacks and backups the data so it can be restored in case of a network outage.
When your personal resources are limited (which they are usually), it is necessary to secure outside funding before you can launch a fintech startup. You can get seed funding from family, friends, or investors. Getting the funding requires moving to the MVP stage, where you’ll be presenting your company to more experienced investors for future expansion and development.
Choose a scope for your MVP
Your top priority as a startup entrepreneur should be minimizing the time it takes to create your first line of code and onboard your first users. The MVP should be minimal yet provide users with enough features and capabilities to get a sense of your business, so you need to carefully define its scope.
In addition to cutting costs and shortening time to market, gaining MVP status early allows you to start testing and answering user feedback, all of which can increase your chances of long-term success.
Improvements to the product
It’s time to launch your product after your MVP has been approved.
Despite the fierce competition you will face, don’t let that intimidate you. Focus on enhancing the user experience and strengthening cybersecurity for your new fintech business.
Your product should always be tested for improvement, even if customers believe it is excellent.
Building a Fintech startup requires the following technologies
It is important to stay up to date with the latest technology trends so that you can incorporate them into your business when you start a fintech company. The more advanced the technology, the better the services you can provide to your customers. Here is a list of the essential technologies you need to get started with your Fintech company.
Artificial intelligence can be used to detect fraudulent activity in digital banking, insurance, etc., because it recognizes and analyzes real-time data, offering recommendations for the best course of action.
You can create a decentralized fintech product using blockchain technology because it creates time-stamped uneditable data that is unremovable.
A cyber-secure environment
In the fintech industry, cybersecurity is a top priority. Before starting a fintech company, you should be very careful about how sensitive customer data will be handled and stored.
In order to avoid security breaches and data theft, you should implement various security measures.
Microservices enable you to create decentralized data management and a distributed application. Your infrastructure can quickly incorporate new solutions.
Are you interested in building a Fintech startup with Revinfotech?
Are you seeking a finance software development company to help you build your fintech startup? Revinfotech can assist you. Our company has been developing digital solutions for international organizations and Fortune 500 companies for the past few years. Our solutions are directed by listening to our clients’ problems first.
The fintech team at Revinfotech has previously created successful fintech solutions for Asian Bank. As a result of our efforts, we were able to create an app that received 250k+ downloads and made them the next big thing in consumer finance. To date, the app has received over 50k cryptocurrency transactions since our team was able to identify and resolve critical challenges in the process.
In this sense, we are glad to help you launch your fintech company. Our team of experts will help you create a successful project without any hassle.
Frequently Asked Questions
- Choose a partner that cares about its clients.
- Never compromise on technology experience and domain expertise.
- Check out your development partners’ portfolios, customer testimonials, and references.
- Observe how they approach communication and how much they pay attention to your vision.
- Ask the right questions to help you choose easily.
- The average outsourcing charges in India are $18 – $40, which is way more affordable than in developed countries like the USA, $38 – $63.
- India has a large pool of native-English speakers who’re highly proficient in their work.
- With an Indian outsourcing partner, you can access 24×7 support and specialized IT talent.