Born from combining finance and technology, the fintech industry has been rapidly gaining traction over the past decade. As entrepreneurs try to bring innovative financial solutions to the masses, fintech startups have been thriving all around the globe. In fact, a recent report from Statista reveals that, as of February 2021, there were 10,605 fintech startups in the U.S. alone. The EMEA region (Europe, the Middle East, and Africa) stands at 9,311 fintech startups and the Asia Pacific region reports 6,129.
In contrast to the way other sectors were developed, fintech is primarily consumer-centered. In this article, we take a look at the top lessons learned from successful fintech companies that can skyrocket your business.
Key Lessons From Fintech Companies
- Agile Development Methods Can Give You An Edge
The development of most financial services is traditionally rigid by nature. If you think of the operating system of banks for example, most of them offer concrete and sequential solutions. All steps have been laid out and must be rigorously followed to deliver the service as described.
On the other hand, most fintech companies use agile development methods to develop, launch and update their services. Focusing on the agile development of your services can give you a serious edge over the competition. Additionally, this enhances your versatility to the rapidly evolving business environment, by enabling you to act on user demand in a shorter turnaround time.
- Early User Feedback Can Help Save Resources
As mentioned above, traditional financial services are fully developed and then offered to consumers. While most would have done their homework and tried to come up with a solution, the reality is that the consumers will still very likely meet roadblocks. This often dampens adoption and requires further research and development to meet customer expectations.
Ideally, businesses want to commit minimal additional investments for their service to be operational. Testing your offering early and often can help you save valuable resources. Studies highlight that as much as 50 percent of engineering time is spent on avoidable reworks. Ask for and act on user feedback at the earliest point in your product life cycle.
- Solving Consumer Problems Increases Trust and Loyalty
All fintech organizations have one thing in common – they all have one core purpose. This can range from helping customers transfer money around the globe, to the tracking of salary information via a paystub generator. Top fintech organizations are aware of customers’ pain points and aim to address these issues with alternative solutions.
Knowing your consumers and acting on their suggestions to solve their problems paves the way for more trust and loyalty. Building customer loyalty is an essential component for business success, especially if you offer financial services. For instance, a study by Accenture reports that only 43 percent of customers trust banks to help them manage their finances in the long term. In contrast, technology has been steadily helping customers get past hurdles and is currently the most trusted industry, according to the 2021 Edelman Trust Barometer.
- User Experience Is A Shortcut to Success
Confusing or complex procedures are often a major turn-off for most consumers. The design of a product (or service) can directly impact user adoption. Steve Jobs famously described a product’s design as “how it works”, instead of what it looks or feels like. Most fintech organizations have adopted this approach and take user experience very seriously.
For instance, research shows that 4 in 7 Americans are financially illiterate. Instead of targeting only the remaining 3 out of 7 consumers, fintech organizations aimed to simplify the UX to capture a broader audience. Notable examples include Paypal and Payoneer; these fintech behemoths are continuously working on enhancing the user experience and their success speaks for themselves.
The fintech industry is in its early years, and there is a long way to go. Still, much can be learned from this sector’s rapid expansion. So far, no fintech companies show up in the Fortune 500 or S&P list. However, this may be only a matter of time, since the fintech sector has seen sharp growth over the last decade. This industry is forecasted to reach $36.04 billion by 2028, up from $1.35 billion in 2021. When applied correctly, leveraging the strengths of the fintech industry can give your business a boost and even enhance your employee engagement.
A Warrington College of Business graduate, Samantha handles all client relations with The PayStubs’s top-tier partners.
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