The fintech sector is growing at a faster pace than ever. Global venture-backed equity funding for fintech companies topped $20 billion in the second quarter, according to CB Insights.
Not all growth is equal. We hosted a breakfast roundtable where fintech founders and experts discussed exactly that. Our panel included Craig Le Grice, Founder of Upgrade Pack; Mitchell Wonboy, Co-founder of Strategic Growth Investment Management (SGIM); and Karen Morgan, Global Chief Marketing Officer of Moven to talk about building fintech companies that last. Here are their five key lessons on outperforming the growth curve.
- Customers want simplicity
As Karen from Moven said, “Knowing the vision of the company and communicating in a simple way is key for attracting funding.” Whether your goal is funding, customer acquisition, or awareness, having a strong core message for your brand is essential to break through the clutter — not only for customers, but for investors. Too many fintechs are trying to do it all. Build a strong messaging matrix that defines who you are as a company and allows you to stand out. Doing so will help you to simplify your message with stakeholders.
- Find the right investor
“There is a tendency to want to chase the big VC and PE investors for the credentials and recognition, but you may lose control over the company you’re trying to grow,” said Craig from Upgrade Pack while discussing the challenges of obtaining funding. Many potential investors may already be in your network. It’s all about finding the right fit and building something together. Focusing on obtaining a collection of smaller investors that can offer their own expertise, support and strategic counsel to your business can be better in the long term. Not only will you have the capital, but you will also have a rolodex of experts you can call on for advice.
- Focus on delivery
Make it easy for customers to use your product. We are already seeing a big shift towards mobile banking, wearable payments and robo-advisors — and according to Capgemini’s Top 10 Trends in Retail Banking 2018 report, financial services companies who do not adapt digital systems could lose up to 35% of the total market share to digital-only counterparts.
Mitchell at SGIM expects that within five years, banking will radically change to focus on the experience on top of a quality product. This shift is due to customer demands for simple and seamless ways to deal with their finances and the desire to integrate them in their daily lives, so it is important to keep those needs top of mind to avoid losing your consumer base.
- Feedback is the future
Listening is key to making the best possible product. Customer needs change from one day to the other — and you must be in tune with what they want. Moven and SGIM use proprietary data and apply it to improve customer experiences. But how can you get there?
In an ideal world, you would conduct one-on-one interviews with your customers to know exactly what they want, but that takes a lot of time and resources. Tools like AI, machine learning, and chatbots can collect data and learn from user feedback. This technology, combined with own hands-on research through more personal channels such as your company’s social media accounts, will allow you to analyze, find gaps and make the right changes to your business model.
- Be smart about new technology
It’s easy to want to jump at the first chance to adapt new technology. But be cautious not to get carried away. Mitchell from SGIM mentioned “while blockchain has a huge potential to impact finance, most are waiting for stability and regulation before investing,” and even the big players are very careful with investments. As CB Insights found in their recent acquisition study – only 18 fintech startups were acquired by 10 of the top US banks since 2013, but they are picking up as fintech startups become more developed and regulated with eight of the acquisitions taking place in 2017 alone.
Much like fintechs can be helpful to banks, AI, blockchain, chatbots and big data can be great resources for your business, but you must be critical about what is the best for you. It’s crucial to be aware of who is using the technology and how; you should also determine whether results been positive or negative in order to properly assess it for your own business.
See below for some photos from the event: