Everything you need to know while starting a Fintech Company (2024)

Want to learn what is Fintech? How to get into Fintech and benefit from this innovation? And how to start a Fintech company of your own?

Finance & Technology are two industries that have been thriving on their own for a long time. Can you think of the possibilities these industries can achieve if brought together? Well, some individuals and businesses did, and a few years back brought us a new industry vertical, Fintech (Finance Technology).

We know that banks have been around for centuries and became organizations with a monopoly on financial services. But after all this time, banks have become an old concept that needs a significant upgrade.

This fight between Fintech vs banks and the shift of power was very aptly quoted by Bill Gates in 1994 when he said, “Banks are like dinosaurs, and the world needs banking services but not necessarily banks.”

Half of the banking customers globally are now using Fintech firms.

What Is Fintech?

We’ve praised Finance Technology since the beginning of the blog, but what exactly is Fintech, and how to get into Fintech?

Fintech is an industry encompassing any technology in financial services – from businesses to consumers.

In layman’s terms, any company that provides financial services through the usage of software or any other digital technology is a Fintech company. So a company that offers financial services using the internet, mobile devices, software technology, or cloud services is a Fintech company.

Goldman Sachs estimates the worldwide Fintech pie to be worth $4.7 trillion

The History & Future of Fintech vs Banking:

The Past

Initially, Fintech was a general classification for technologies that were applied in the backend systems of banks and other financial institutes, but as time passed Fintech grew to serve an array of other applications primarily focused on consumers, rather than just financial institutes.

It sparked the battle of Finance vs Banking. This was the point when Fintech and banks became two separate but co-dependent verticals.

The Future

One may not simply feel a revolutionary experience when paying for the food online or booking tickets via an app, but all of these are services only possible due to Fintech services. So whether you are purchasing a cup of coffee or managing your stock market profile, Fintech is all around us in 2024.

Fintech has disrupted traditional financial and banking industries, from mobile payment apps like Square to insurance and investment companies all are proof of a promising Fintech future and the potential threat to traditional, brick-and-mortar banks or financial institutions.

Fintech is moving strongly in the future while the banking industry’s only way to survive, let alone thrive in the future is only possible if it accepts and benefits from Fintech offerings.

See Also: How to Build A Fintech App?

Types of Fintech Apps

Making a good app is a daunting task.

Especially when you are unaware of the exact details. But enhancing the business value is equally important. So, what measures to take? Simple. Focus from different perspectives. For that, try to answer the following:

• What Fintech niche are you going to focus on?
• What will be the cost to develop the app?
• What features will the app have?
• And lastly, what technology will you focus on?

To make a successful Fintech app, you need to think from all the possible perspectives and start with the development phase.

Below we are listing some of the common Fintech app categories to help you get started on the right track.

1. Digital Payment Apps

The digital payments app is showing a massive increase in usage. Compared to 2019, mobile payment apps saw a rise of 900 million users in 2024. This is due to more and more users shifting from cash payments to digital payments and advancements coming in every once in a while.

Moreover, these payment apps carry out efficient and safe transactions for users to rely on.

Popular digital payments apps: PayPal, Google Pay, Circle Pay

2. Digital Banking Apps

Make bank transactions from anywhere in the world!

Many banks are now shifting their Fintech business from traditional to mobile apps. How will mobile apps benefit users? They can make easy transactions digitally without having to step outside the house.

The users can link their debit card with the app to transfer money, exchange cryptocurrencies, and carry out other banking services using smartphones or tablets.

So, perform all the banking transactions from the Bank of America at the tip of your finger.

3. Digital Investment Apps

Investment apps are gaining immense popularity. Today, these platforms help invest in the stock market cryptocurrencies, follow up on the account in real-time, and allow the users to gain an insight into the current market trends.

Owing to these points, digital investment apps as a startup idea can be impressive for people interested in investing in stocks and other investment platforms.

4.Digital Loan Apps

Technology has evolved the way we apply for and process loans.

With digital lending apps, you can easily apply for personal loans, student loans, mortgage loans, etc.; it serves a great purpose to make communication efficient between borrowers and lenders.

The entrepreneurs developing digital lending apps can comprehensively help customers manage their loans from the time of loan application till the final processing.

5. Personal Finance Apps

Consumer finance apps can be a great alternative to help manage and track expenses effortlessly. These apps link the bank account and help maintain the spending from time to time.

To manage overall finances, these apps house lots of exciting features. It includes sending reminder emails, the due date of bills, subscription tracking, and wallet-sharing capabilities.

Personal finance startups can thrive with features like gamification, personalization, and AI-driven financial coaching

6. Insurtech Apps

The Insurance mobile app development is undeniably becoming more popular due to their speedy policy administration and easier claim process.

These digital apps help remove the unlawful activities taking place during the filing and processing of insurance claims.

Technologies like Machine learning, Blockchain, Robo-Advisors, Artificial Intelligence, IoT, Drone Technology, and biometrics are used to build Insurtech Apps. With such magnificent automation, initiating the insurance business should be on your mind.

7. Regtech Apps

The advent of regulatory technology has led businesses to automate KYB, KYC, AML, and other compliance checks.

The apps can ensure regulatory compliance as well as other ongoing processes. With this, human errors have also become minimal

How to Start a Fintech Company: 5 Things Every Startup Owner Should Know

The best apps right now are the ones that are either helping its users make money, or invest their money to give good returns. Here are the 5 most important things to consider before creating new Fintech startups.

1. Identify your niche

The Fintech services mentioned above are not the only ones trending. You need to research and find out your particular niche in this broad vertical. Now you need to choose your niche based on a few factors like:

(a) Category and age group of users you are targeting.

(b) The country you are targeting.

(c) Your specific expertise in the finance industry.

Just like Non-Tech Startups, Fintech startups have a lot of niches too:

• Online Payments & International Fund Transfers
• Insuretech
• E-Money Lending
• Mobile Trading & Investments
• Personal Finance Management
• Mobile Banking
• Crowdfunding Platforms
• Financial Accounting, Tracking, & Management Products
• Finance Management Softwares for SMEs
• Data Analysis & Financial Decision Making
• Cryptocurrencies & Blockchain-based Solutions
• Fintech Consulting
• NFT Marketplace Development

2. What’s Different About Your Fintech Startup?

Now that you have found your startup niche, find out who are your competitors. Find what are they lacking, and what issues their customers have with them. These are your points to advance and become a superior option for the target audience.

Now your Fintech product or solutions have everything that your competitors provide and then some more, which will be the reason why users will make the switch from them to you. Another approach is to find where exactly your competition is not working and start growing your business from there.

For instance, no Online mobile payment gateways have collaborated with farming equipment and tools providing companies. Now your target niche is to provide online payment options for the rural farmers to buy their farming tools and equipment.

There are more than 12,000 Fintech startups worldwide out of which 5,779 Fintech startups are just in the US.

3. Know the Rules

When you are handling other people’s money, there are a lot of rules and regulations that you need to follow. Previously banking, and now Fintech has many such high regulations that new Fintech startups should abide by.

Before starting a Fintech company, you should learn about the concerning regulatory authorities, laws, legal requirements, and limitations. Remember that every country has its own set of regulations. If you offer your Fintech app and services to people from more than one country, then your Fintech organization has to abide by the regulation of all those countries.

4. Hire the team

The most important part of Fintech app development is not the Finance but the Technology that powers it. You may have complete knowledge of the nuances of the finance world, but you need an equally (if not more) knowledgeable team of technical experts to create your Fintech app or software solution.

You need to find the perfect technology partner as per your development needs as well as your budget. If going with the most expensive app development firm is not in line with your budget, then choosing the cheapest software development agency is also not an advisable option.

The best advice for you in this situation is to find the best Fintech software and app development company that has the top technical experts at a reasonable price. In other words, an offshore technical team supporting your in-house startup team.

McKinsey Panorama report that almost 80% of financial institutions have established a Fintech partnership.

5. Get funded

Funding is the most important and probably most difficult part of starting any company. You need to show the potential of your business venture. The thing that will help you differ from other pitchers will be an MVP (Minimum Viable Product).

If you don’t have enough budget to create a complete Fintech app, you can ask your tech team to build an MVP which you can show as proof of concept to potential investors and ask for investment into your Fintech venture.

With the funding that you receive based on your MVP, you can build a complete app or software solution for the market. That is how all large businesses grew their products and solutions.

5 Things to Avoid When Launching Your Fintech Startup

Starting a Fintech business is not a piece of cake where you can succeed overnight or by magic, and smart work will also not work if you put all your efforts into it. However, experts suggest that with knowledge and skill, Fintech companies can be successful.

Although Fintech companies have common risks like many businesses, you can still flourish in this industry by learning the pitfalls and implementing them correctly.

Let’s see some of the common mistakes to avoid when starting your Fintech company!

Neglecting the Needs of your Target Niche

What is the prerequisite in any business? Knowing the customer’s requirements and fulfilling them, right?

So, ensure that you do not miss out on any opportunities to meet the user demands, do not leave any stones untouched to find out your niche market interest. Do this first when you start the company because avoiding this crucial point can result in your business failure.

Lack of Concentration

Distraction is not an answer when you enter the financial technology industry.

The Fintech domain requires complete focus to draw new ideas and suggestions from time to time.

Having a properly planned idea to follow up till the end is a must.

Hiring Mediocre Employees

A startup requires the right talents to work as a wholesome team in its initial stage. However, it can get expensive to hire and retain experts. But, employing experts is also a must to thrive in the industry.

So, To find a middle way, consider hiring an off-shore developer team from a cost-effective location. Continue with remote employees until you can afford to employ high-paying app developers.

Inadequate Capital

Proper equity capital is a must in any business, and the same is true for Fintech startups. So make sure you have sufficient funds.

A Fintech business can get expensive with technological developments and workforce. Besides that, taking the legal regulations can also be costly at times.

So to get rid of all the piled-up costs, put a proper strategy in place. It will help you flourish in the business in the longer run.

A Complex Payment Process

Never make this mistake.

Customers always find ways to switch on the internet. Hence, if you leave any stone untouched (bad user experience), they will leave immediately.

To escape from the switching part, try to make the checkout process as simple as possible to carry out payment processing easily.

The Most Popular Fintech Trends in 2024

Fintech Services are not just limited to ordering products online or accessing and maintaining your bank account via a smartphone. The latest Fintech and mobile banking trends are changing the face of the entire finance industry. After going through how to start a Fintech company, now get ready to see the full extent of Fintech services.

Best Budgeting Apps of 2024

The most common and simplest use of finance technology is developing New money management and budgeting apps. here is the list of the top personal finance apps of 2024 to manage your personal finance Acorns, Mint, Quickbooks, YNAB, and Intuit.

Earlier people had to maintain a logbook or an excel sheet to track their finances. There was also the tiresome activity to gather checks and bills to maintain them in files. Fintech-based best budgeting apps resolved all such issues.

With these Best Budget Apps and Personal Finance Tools for 2024, users could easily manage and keep track of their income, expenses, and investments.

3 trillion is the prediction for the globally forecasted mobile payment market size

Build Crowdfunding Platform Website

The new entrepreneurs don’t need to depend on a bank or any other financial institute for a loan to start their business startup. Fintech gave birth to a concept called a crowdfunding platform. On such platforms, people can post their business ideas or prototype products and ask for investment.

People from around the world view this post and can give any amount of money they wish as an angel investor, a fan of the idea, or a patron. The most popular crowdfunding platform websites are Kickstarter, GoFundMe, and Patreon.

Create A Blockchain & Cryptocurrency Exchange Platform

Blockchain and more specifically, Cryptocurrency is the benchmark of excellence of Fintech in action. Due to the advance and elite nature of Financial services in blockchain, Cryptocurrency exchanges like Coinbase and Gemini help users in buying and selling cryptocurrencies such as bitcoin Ethereum, and Litecoin.

SEE ALSO: create your own cryptocurrency website

Blockchain is not just limited to bitcoin & Cryptocurrency Exchange Application Development, Bitcoin Trading Application Development, Private Coin Development, Bitcoin Exchange Systems and etc.

The overall contribution of apple pay is accepted in 60 countries, and Google pay is still available in 40 countries, and Samsung pays in 29 nations only.

Starting a Insurtech Startups

How tiring was it in the 90s to go after your insurance claim? Going from one office to other, sometimes more than a day wasted behind a simple query. But all this changed when Fintech disrupted the insurance sector and changed it into Insurtech (that’s a real thing).

Oscar health insurance startup secured $165 million last year, increasing its valuation to around $3.2 billion. Other Insurtech companies like Credit Karma, reached a valuation of $ 4 billion in the 1st quarter of 2019. These Insurtech examples show the level at which Insurtech is thriving.

AI-based Investment Assistance

The stock market has many times witnessed a market crash due to human error. The best way to avoid such an error is by bringing in artificial intelligence that can calculate all the factors and give a foolproof output for your investments. This is the future of Fintech for stock trading and investment.

Such “smart” advisers will make sure that your investment portfolio is completely calculated and decided after taking all the factors into account. The stock-trading apps that can analyze various portfolio options 24/7, work on such AI-based advisers.

The mobile payment revenue will surpass 1 trillion U.S. dollars globally by the end of 2019.

List of Top Fintech Companies & Applications

If you decide to start your Fintech startup in NYC or Chicago, then you have a better chance of succeeding. Chicago, New York, and San Francisco are turning out to be the Fintech hub for this industry.

If you are planning to invest in promising best Fintech startups, then you should look out for these Fintech Startups:

SEE ALSO: Stripe vs Braintree: Which is the Best Payment Process Service Provider?

If you aim to build your own Fintech app or just looking to download an excellent app to manage your money, here are the best Fintech startup apps for you:

Top 5 Reasons to Start your FinTech Business Now

The Fintech world is thriving rapidly with dynamic advancements coming in. There are so many new articles to read on the firms getting unicorns in the fintech industry each day.

Let’s sneak peek into the reasons why you should start a Fintech business.

The Growing Adoption Rate

As per a report, the global adoption rate of Fintech apps was 64% by the year 2020. Today, we can find at least one Fintech app in a smartphone user, and many traditional finance players are using it too in their day-to-day life.

The Fintech industry has every solution that users need, from personal finance apps to insurance apps. Considering that, the Fintech business is a great way to kickstart your startup.

Successive Incorporation of the FinTech Apps

Big Firms like Stripe, Braintree, PayPal, and many others have started Fintech apps and have broadly established their business into the financial industry.

So, starting your Fintech app is a great initiative to go for, especially in an era where mobile apps are becoming prominent.

Wide Array of Developmental Opportunities

The Fintech business opens doors for multiple developmental opportunities like personal finance, mobile-enabled payment services, budget management services, etc.

Thus, developing a Fintech app can be a great way to kickstart your business.

Availability of a Wide Array of Technologies

The Fintech apps house a lot of technologies, and you can build the app in IOT, AI, ML, or Robotics. For example, Stripe has built its identity verification tool with Artificial intelligence and Machine Learning technologies.

Pick any broad spectrum of technologies to create a powerful Fintech solution.

Better Expertise

With the world shifting from web apps to mobile apps, there is immense expertise seen in the fintech industry.

Developers can quickly develop these kinds of Fintech apps. Alternatively, programmers can also seek opportunities from fintech consultations to learn the fundamentals of financial regulations.

Moreover, government institutions also look forward to digitizing fintech businesses.

Let’s Start Your Own Fintech Startup

People need banking, not banks. This statement of Ranjit Sarai has been proved true with the thriving Fintech industry. It is not far fetched to say that in a couple of years machines will debate with you on your investment hypothesis and probably prove you wrong.

The world is moving in the fast lane with Fintech, and you can either stand in the sidelines and watch it pass by you or be one of the forerunners of this revolution. I guess now you exactly know how to start a Fintech company. Find the right technology partner for your Fintech startup and grab the best Fintech opportunities this industry offers.

FAQs on FinTech Startup