The prospects look brighter than ever for the fintech industry. As per a recent Research and Markets report, by 2026 the global fintech market share is set to reach $190 billion. Obviously, customers are happily embracing fintech. Almost 92% of the population have used digital payment systems and in most of the developed economies banking apps have already become mainstream.
In this blog, we will outline the steps you have to take if you want to launch a fintech startup. We will also talk about the important things that you should consider if you’re contemplating fintech app development.
What’s a Fintech Startup?
Using digital solutions for helping customers resolve their financial problems is what a fintech company is all about. Established financial institutions are also building fintech apps and platforms to offer customers better experiences. On top of that, every company now, regardless of the industry, can add fintech to its pallet of services using embedded finance.
The competition is high, but the opportunities for success are also in abundance. If you need a guide to entering the fintech scene from scratch, read on.
How to Launch a Fintech Startup: Things to Keep in Mind
There are things that you should take into account before you plunge into fintech app development. There are many regulatory and business specifics to watch for. The checklist below should set you on the right track.
1. The laws and regulations
In the US, finance is a highly regulated domain requiring compliance with many regulations and laws. These laws will also differ depending on the state, so make sure you know and comply with the legislative demands in your area of operation. Scaling SaaS fintech products to cover different US states becomes challenging in this situation. The regulations will also differ depending on the finance industry segment that you plan to target.
As of recently, a vast number of services have emerged to help companies deal with regulatory requirements. The fast-changing regulatory landscape has led to the rise of an entirely new industry called regtech. Delivered on an as-a-service basis, regtech is now a major asset in helping fintech companies ensure regulatory compliance.
2. Fintech niches and segments
Fintech is split into a number of segments, so you must decide which one you want to target. Are you planning to launch a lending service, a payment transfer service, or a digital bank? Some of the most popular fintech areas include:
– Investment management
– Mortgage app development
– Loans and peer-to-peer lending
– Mobile banking
– Payment transfers
– Insurance
– Crowdfunding
– Cryptocurrencies and blockchain, etc.
3. Your customers and their pain points
Your next step should involve collecting as much information as you can about the customer group you want to target. Getting to know them better will help you build a fintech service that addresses their needs. A historic 2014 survey, for example, that revealed what the millennials hated most about traditional banks, helped many companies build digital banking services that are simple, convenient, and user-friendly.
4. Your competitors and their shortcomings
Chances are that you won’t be introducing anything unique and that the niche you target is already filled with competitors. Yet, you can still succeed if you meet the same customer needs in a better way. Studying your competitors will help you identify their shortcomings and build your products around the important gaps they have overlooked. Something as simple as a convenient interface and better customer service can set you apart from other companies and help you gain the upper hand.
5. Your funding options and budget
Think about how you will attract funds to finance your fintech startup. Consider several options: crowdfunding, angel investors, bank loans, or venture capital. Most of the now existing fintech giants have started by building MVPs (minimum viable products) and attracting investor capital after they have proved successful. Such an approach helps you save your money and effort rather than investing it in something non-viable.
6. Fintech app development costs
The cost of building an MVP will depend on a number of factors. Developers usually charge hourly rates. The more complex your solution will be, the more time and effort it will take to build it. Another factor is the geographic location of your development center. For example, an app built in North America may cost almost four times as much as the app built in Ukraine. Basically, the costs for fintech app development start at $30, 000.
7. Finding a development partner
The company you partner with should be working under the legal framework of the US or EU and have headquarters in a country with a developed economy.
History of successfully-developed projects
Your partner in fintech app development should have proven experience in successfully-completed projects and have hands-on experience in building a wide range of software solutions and services.
As a software development company, VARTEQ meets all of the above criteria. If you have a fintech solution in mind that you want to bring to life, get in touch with us now to discuss the development details.