Fintech is a hot market because its growth has rapidly increased in the past few years. According to Statista, the average revenue of fintech companies in 2023 was $79.38 billion. Furthermore, it is estimated that by 2028, the revenue of Fintech companies will be $141.18 billion. This goes to show that Fintech will generate more income.
Certain mistakes must be avoided to enjoy the projected revenue of the fintech industry. If you are a startup in the fintech industry, read and learn about the mistakes fintech companies must avoid to grow.
Common mistakes made by novice Fintech companies
Unfortunately, despite the projected growth of the fintech industry, some companies in this sector may not enjoy any. More so, check out the common fintech mistakes you should avoid as a startup.
- Insufficient financing: Usually, at the initial stage, most fintech companies lack adequate financing. Before you start a fintech company, ensuring that you have adequate funding is paramount. If your customers realize that you always have insufficient financing, they will engage the services of other fintech firms. You don’t want to be left without funds halfway through a transaction with a customer. Take note that the fintech industry requires a lot of financing to flourish.
- Blindly following other people’s approach: Unfortunately, some startup fintech companies lack focus. They aim to follow the trend or do exactly what their competitors do. This approach will hurt your business in the long run. Define your fintech business and ensure your approach is unique and suits your customers. Some Fintech strategies you followed on the surface value may have some issues that occur in the future.
- Excessive focus on the trend: It is very difficult to fintech, a fintech company that is not offering services related to Blockchain, cryptocurrency, and machine learning. Even though these trends are fantastic, allowing the Fintech trends to determine your strategy may harm your company. Meanwhile, ensuring they work is important if you must offer such services. Unfortunately, some fintech companies use words like cryptocurrency, Blockchain, etc., and they don’t perfect it. Following the trends is good, but it is also important to ensure it works better.
- Noncompliance with regulations: The first bottleneck that fintech startups encounter is compliance with regulations. Interestingly, some fintech companies try to cut corners and get into trouble. Ensuring compliance is important, no matter how rigid a fintech regulation may be. Your fintech business will suffer setbacks when your standards are inconsistent with the regulatory authority. Remember that whatever business involves holding people’s money is always watched closely by the government.
- Poor selection of tech partners: Running a fintech company while partnering with third parties is almost impossible. Most Fintech startups use third-party partners to save and secure their data. For example, if the partner you use to secure your data is not secure, it will affect your transactions. Customers always want their data to be safe and secure. Meanwhile, customers may no longer use your services if your third party is inconsistent.
- Using a simplified platform that is poorly secured: Top fintech companies take the security of their customers’ data seriously. One of the most expensive things about a fintech company is security. Using a simplified technology for your security can cost you a lot of losses. In addition, if customers scrutinize your security measures and discover that they are simple and less safe, they will not use your services. From your mobile application to your website, they should be on backends that can be trusted.
- Hiring an inexperienced workforce: No matter the cost, ensure that your fintech workforce is experienced in this industry. Your workforce should understand how the technology in the fintech space works. Remember that the fintech industry’s successes are primarily predicated on the growth and development of technology. Hire experienced fintech experts and get some novices to learn and be tutored.
Conclusion
The slightest mistake made by a fintech company can ruin its chances of success. Some generalized issues may not be your business, like network issues. Finally, no fintech business should launch without having the right funds and technical know-how. Experts like Skaleet can help your business get to the next level.