Regardless of geographic location, FinTech startups have learned some valuable lessons over the past few years. The successful ones have adopted several key lessons, and many who have since folded have ignored them.
As CEO of WeGoLook, an on-demand asset verification platform that works in close collaboration with enterprise financial clients, I have seen first-hand some valuable lessons given by FinTech.
Here are five of the most important.
1. Understand your target clients’ needs and desired outcomes
Before you begin designing your technology solution, you need to have a thorough understanding of your target client. Develop a complex persona and tailor your designs accordingly.
What does this person struggle with? What would make this person’s life easier? How can you help? Spending time upfront to identify and understand your ideal customer will save you a lot of time and energy in the long run.
2. Solve a problem for your clients
Once you have defined your target user, focus on solving a singular problem for that user. Finding a niche will help streamline your customer acquisition, and it will also help ensure scalability of your application development and marketing.
Focus on a single issue that consumers struggle with at traditional banks – transaction fees, transfer delays, or mobile banking limitations could be potential starting points.
3. Get user feedback throughout the development process
To make sure that your solution is aligned with consumers’ expectations, test your application early and often. Ask for feedback from users on the interface and functionality of the program so you can make any significant changes sooner rather than later.
Listening to user feedback will help your team improve the app design and will also help establish trust with your target customers.
Building trust is especially important in financial services, an industry that is notorious for lukewarm customer loyalty. In fact, banks and financial service providers traditionally hold nearly the lowest levels of consumer trust, according to the 2015 Edelman Trust Barometer.
Conversely, 76 percent of people surveyed in the above study identified technology as their most trusted industry.
It's therefore not overly complicated deciding how we can regain consumer loyalty: embrace digital innovations.
4. Form strategic partnerships
Finding a niche has the added advantage of leverage when forming strategic partnerships. In the world of finance, there are opportunities to integrate and collaborate with other technology solution providers.
Thanks to the rise of APIs, different providers can selectively share certain aspects of their application with third parties while preserving the privacy of their full code.
Major banks like JPMorgan Chase, Bank of America, Goldman Sachs, and Citigroup have already made investments in FinTech companies to extend their services.
Goldman Sachs has reportedly made bold investments in Square, Circle, and PayPal to improve their service offerings and increase customer retention.
5. Build a culture of innovation
FinTech is more than an application; it’s a state of mind. Instill a sense of brilliant disruption among your colleagues by encouraging them to share ideas, collaborate with unlikely partners, and innovate from within the organization.
To succeed as a FinTech startup, you must thrive on disrupting the status quo.
The rise of FinTech serves as a reminder that maintaining a singular focus on small, deliberate changes can yield tremendously powerful results.
By simplifying a small-yet-important task like transferring money, FinTech companies can make their users’ lives easier and save them a lot of money over time.