Fintech has already changed the life we’re used to as much as it was possible. Now we all know that buying online, monitoring our finances, and paying for different services is easy and available even from home. But more so, there is no monopolist in the fintech industry! You’ve heard about who monopolized retail (Amazon, eBay), entertainment (Disney, Netflix) but there is still no one who has the ultimate power over all fintech industries. It means that there is enough space for new startups, unicorns, and enterprises, so you may launch your fintech startup with a dream in your heart. Maybe your startup is meant to be the Ultimate One in this industry?
But in order to fulfill this dream, you need to build your unique experience based on the experience of others. So in our brief guide, you’ll find the most useful secrets hidden in from other’s success.
Secret 1: Solve the real problems of your clients having a focus on their “pain points”
Even though it seems like a really simple thing, not everyone is able to handle it. The Unicorn from the UK, Funding Circle, was one of those who nailed being useful to their main target audience. Its co-founder Sam Hodges once was in their clients’ shoes. He says that somewhen he had trouble getting a business loan. Meanwhile, his startup’s main idea is simplifying the funding process for small businesses. Savvy?
Funding Circle is a funding platform for both investors and small businesses. It allows startupers to get business loans from investors directly while investors can make profits; and all of them are united by the common goal that lies in funding. The other Funding Circle co-founder, Samir Desai, is awarded as peer-to-peer and financial inclusion innovator.
Around 90,000 businesses were financed with the help of the platform and the reasons for this success are quite obvious: using this platform is easy and fast.
Clearly, their secret is in the fact that they work with the pain points of their clients. They’ve found what is extremely important for people they are targeted on and simply made it better.
The speed of getting funding is the thing that stimulated the investors and startups to find each other on the platform. According to Funding Circle’s statistics, more than 100,000 businessmen already got the business loan and the whole turnover in the project is around 10 billion pounds.
The other reason for its success is transparency. Funding Circle gives detailed information about the funding process; investors can find info about startups they’re about to invest in and contact its founders. Transparency is important both for small businesses and investors since it allows both sides to be sure that funds are really spent on what it was meant to.
They’ve approached the problem that is relatable for many small businesses and solved it through the fast and transparent connection between investors and startups directly. Funding Circle works with large companies like Facebook, Twitter, Skype, and manages 5 trillion pounds. Their impact on both fintech services and work search can’t be underestimated since they’ve contributed to give jobs to 115,000 professionals.
If your goal is a success of this level then you can’t simply dream of it. You need to research the market, find the pain points of your target audience. Work on something you’re personally interested in – this is the way of finding your target audience’s main interests as well.
The thing is most people using fintech are worried about security. And this is exactly what US-based fintech startup Coinbase has taken on its shoulders. In 2017 Coinbase got its round D funding and this raised its value to $1,6 billion. Now they are fintech Unicorn and their mobile app has been the most downloaded in AppStore for quite some time.
Their main purpose is cryptocurrency trading; this is why security is in the first place for them. And this is what made them a successful Unicorn.
98% of the cryptocurrency funds on the platform are stored autonomously, the other part stored online and is protected and insured. Insured clients will get compensation in the case of hacking. By the way, Coinbase wasn’t hacked even once.
In addition, the startup encrypts all data and provides customers with quality two-step data validation.
One of the most interesting things about this startup is also its reward system for bug-finding. Thus, those who have found imperfections in software can get real money for their thoughtfulness.
The secret of Coinbase’s success lies in this particular attention to security issues. The startup, that is ready to pay compensation to the victims of digital malfunctions and encourages users to search for imperfections in the system, is able to win the trust of clients. Today they have more than 35 million users, and their budget for 2019 was about $2 billion. It is integrity, transparency, and digital security at the highest level that has made Coinbase the largest platform for cryptographic exchange.
If you want to do the same one day, you can look for a technical partner that works with blockchain implementation. Blockchain is the best tool if you need to ensure the highest security level in fintech software.
Secret 3: Track innovations/trends and think about how you can apply them
Here we will move the spotlight a little bit from fintech to regtech, on which banks and other financial institutions also rely on. So, regtech itself is a subtype of financial technology responsible for the companies’ compliance with regulatory standards.
British startup Onfido created a new normal for digital identification. Their technologies are based on AI algorithms and are made for assessing personal identification to minimize fraud. The companies they’re working with are Revolut, Zipcar, and Bitstamp, along with other 1500 companies all around the world. The startup was founded in 2012 and now has offices in London, San-Francisco, New-York, Lissabon, Paris, New-Deli, and Singapore. The number of employees is more than 400 people.
Onfido uses machine learning and AI algorithms for biography and digital identity checks by analyzing the photo of documents or even a simple selfie. This is why they’re taking far less time than the same work done manually. Onfido works with companies in fintech, healthcare, telecommunications, retail, gaming, and other industries. One of the most interesting Onfido use cases is the “know your customer” service that helps reduce the checks in the workflow; only the clients who didn’t pass the primary check have to go through the additional one. This may be especially useful for fintech companies related to lendings.
Onfido also provides age verification, fraud detection, user verification, and other services.
The secret of Onfido’s success is the quality implying innovative tech where it was most needed. They’ve implemented it so their startup is now able to simplify the standard procedure for identity verification. Thus they’ve changed the standards for verification and provide their clients with many more opportunities for securing themselves and their businesses by digital identity checks.
Secret 4: Aim to create something unique to stand out
When we’re talking about fintech it’s easy to say that each innovation in this industry has the potential to disrupt the market. But the startup we’re now talking about didn’t only have potential, they did disrupt the market in the end. One more fintech Unicorn Ayden is a global payment platform that you can use to pay both online and offline. Among their clients are Uber, Lush, Spotify, Netflix, and eBay. The last-mentioned eBay even stated once that Ayden has the potential to become their official payment system.
The most important thing for this startup is being easy to use, and they provide both online and offline stores with this level of comfort. Ayden ensured that they have a possibility to scale by adding more and more payment methods. Now available ones are Visa, Mastercard, American Express, iDEAL, Sofort, Alipay, and others. And with each new payment method on the market, they’re becoming more and more universal.
The company allows payment through their platform from different places in the world (they’re working in Europe, US, China, others) and it ensures the startup growth. The level of comfort and usability is responsible for the disruption they’ve made on the fintech market.
The secret of their success is probably the fact that they’ve found a new unique solution in their industry. The most important things for changes are comfort and accessibility with which Ayden never had any troubles. Their clients can pay through the system both from offline and online; this simplifies the users’ and businesses’ lives since it unifies the payments in all stores. In 2019 this startup processes around 240 billion euros and the whole thing is about being easy to use.
Don’t doubt anymore; if your idea can bring a piece of comfort to the people’s lives it has the potential to be “disruptive”. Especially if your solution is more accessible than anyone else’s ever before.
So now you know the main highlights of “how to ride high”: change, secure, improve, and be innovative. But at the base of every success story always lies something you’d never read about in checklists or articles. The main things are a good idea and a true passion for it.
Anything else comes next: how you’ll fit into the market, how committed your people are, how good your team is. Don’t stop on what you’ve already done, don’t disregard any of those primary things you build your startup on, and remember your core values.
In today’s world there is a lot of space for creating a fintech startup that may one day become a Unicorn. So if you were waiting for a sign, here it is!