Technology has been implemented in the financial world many years now. Computers were used for payroll accounting long before they were used by the average office worker to type letters. Replacing tellers with ATMs saves money and gives customers access to their money when they want it. And technology applied specifically to the financial industry has become its own industry. Here are four tips every new fintech business needs to know.
Know the Regulations that Apply to You
You must fully understand every regulation that applies to your industry, your business, and your customers. If your financial offering is classified as a security and you don’t have the right licenses and registrations, you could be shut down. And you have to understand all of the rules and regulations that apply to your financial technology. Failure to abide by information security rules is bad enough, as the Equifax breach shows, but the rules for protecting digital financial transactions are even tougher.
Understand the Market
When you’re developing a fintech product, understand the market you’re disrupting and the customer expectations. If you aim at the wrong market, correction is costly and may kill you because you cannot rebrand fast enough. Deliver a product that doesn’t improve on what the market already offers, and you’ll fail. Don’t develop something that faces an already crowded market without a distinguishing characteristic customers value, and that requires doing your research first.
Understand Where You Fit In, Literally
If you don’t know how to connect your fintech product with existing supply chains, you’ll probably fail. For example, a budgeting app sounds good but if you have to manually input all of the information instead of importing it from your bank, few will want to use it. Crowd-funding platforms need to be integrated with social media so that people can advertise their campaign and link with financial institutions where they want the money to be moved after the campaign.
Work with a team that understands both how to develop the technology and how it fits into the broader market as a whole.
Cultivate and Maintain Trust
Financial breaches like Equifax cost a business the trust of its customers. You need to determine how to protect customer data at every step of the way, whether preventing data stored on their phone from being stolen by keystroke loggers, encrypting data as it travels over the network, or securing your own data on the cloud from being breached.
Fintech is a growing market with great potential but if you’re struggling to make successful bids for new work, use a professional bid writer such as Executive Compass, a company that specializes in bid and tender writing.
Regulations are arguably strangling fintech startups, but they exist because the public wanted them in the first place. Know which ones apply to you and how to comply with them before you spend too much time and effort creating a financial technology product or service. Know where your product fits in the market and why people should go with your offering over what is already on the market. Determine how you’ll protect data and customer privacy and demonstrate that your product is trustworthy.