How to start a FinTech company – What entrepreneurs must know

We have reached a point where people must use their laptops and smartphones to go through their daily routines. Its usage extends to payments and banking being done digitally through apps. It allows people to manage their personal finances, trade cryptocurrencies, and even invest in international businesses through the convenience of an app. Starting a fintech company can give you more audience than a traditional financial institution.

If these numbers impress you, let us discuss how you can complete your fintech startup business plan and how you can start a fintech company alongside.

Startups revolutionizing the Fintech sector

Let us take a look at some companies in the industry that are doing well in their niche.

Stripe

Stripe deals in online payments and rose funding of $478.7M across nine rounds.

Mint

Mint deals in personal finance management and rose funding of about $31M across five rounds.

Robinhood

It deals in investment and trading and rose funding of $539M across five rounds.

Coinbase

Coinbase works for digital currency exchange and rose funding of $225.3M in 8 rounds.

Revolut

It works as a ‘neobank’ and rose funding of $1.7B in 7 rounds.

Now that we have seen the major fintech startups that are reaching great heights with their success stories, let’s look into the steps needed to create a fintech startup.

How to build a fintech startup?

Now that you understand how viable it is to start a fintech company, let us dive into the steps you must follow to build a financial technology startup.

Know the regulations

Banking and fintech are highly regulated sectors. Therefore, you must be familiar with every aspect of this extremely complicated industry, including the governing bodies, legislation, restrictions, and criteria.

The General Data Protection Regulation (GDPR) covers all companies that interact with client data. For businesses in the finance sector, this policy is just the beginning. Anti-money laundering (AML) guidelines, Know Your Customer (KYC) compliance standards, and adherence to the PCI DSS are typical fintech regulations in the US. Additionally, you might have to use conventional authentication methods like digital certificates.

Choose your niche carefully

The need for all types of fintech software is currently steadily increasing. However, digital payments, personal finance management, and alternative financing are the fastest-growing market categories. The use of investing solutions has also increased dramatically.

Here are a few of the several fintech subdomains to take into account:

1. Investment management
2. Personal financial management
3. Global money transfers
4. Loans and advances
5. Bitcoin and blockchain-based technologies
6. Crowdfunding

Your product can target a particular audience, such as a nation or demography, depending on your subdomain. It’s preferable to start your firm locally and then grow internationally.

Establish a competitive advantage

Once you’ve decided on a niche, research your competitors. A thorough knowledge of the market and your competitors can assist you in identifying a distinctive quality or competitive advantage that will set your product apart from similar products already on the market.

Build your team with the right people

One of the many requirements for a successful company is having the right individuals on your team. However, it could be difficult to draw in developers and expand your team locally, particularly if your area has a small talent pool.

Prioritize data security

Verify the security of your business along with the encryption and cloud storage of all important data. As a fintech startup, this should be your most urgent requirement. Fintech security problems could cause the disclosure of sensitive information that one could exploit for theft or fraud.

Run thorough tests to inspect any vulnerabilities to assure your company’s top-notch fintech cyber security. Apply transport layer security (TLS) to all network connections, stop unauthorized API connections, and use an HTTPS SSL certificate to secure your clients’ information.

Obtain funds

If your personal resources are limited (which they typically are), you must first secure external investment before launching a financial firm. Your fintech startup funding can come from close friends, family, or seed investors. In order to get the funding, you need to move to the MVP stage, where you’ll be presenting your firm to more experienced investors for future development and expansion.

Set your MVP’s scope

The shortest possible time between creating the first line of code and onboarding your first users should be your top priority as a startup entrepreneur. In order to do that, you must carefully define the scope of your MVP (Minimum Viable Product), which should be minimal yet provide users with enough features and capabilities to acquire a feel for your business.

Quickly reaching the MVP stage allows you to cut costs, reduce time to market, and start testing and responding to user feedback much earlier, all of which naturally improve your chances of long-term success.

Product launch and improvements

After you have gotten your MVP approved, the next step is to release your product in the market.

You will face fierce competition as a new fintech company but do not get intimidated. Keep concentrating on improving your product for a better user experience and stronger cybersecurity.

Learn more: https://appinventiv.com/blog/how-to-start-a-fintech-company/