5 Key Challenges Before FinTech Startups (and How to Overcome Them)

Remember the last time you transferred money online to a friend or paid at a restaurant with your smartphone? Those were made possible because of products from the FinTech market. 

FinTech apps are becoming a part of our lives more than we realize. With digital payments and enterprise finance solutions, mobile banking is becoming a norm, and the FinTech industry is growing quickly.

“96% of consumers are aware of at least one FinTech service. 75% of them use a minimum of one FinTech product.” 

While consumers are open to adopting FinTech products, there’s still colossal competition and several challenges in this sector that companies need to overcome. Let’s discuss the top FinTech challenges and ways to conquer them. 

1. Build Trust and Credibility

With the introduction of new disruptive technologies and modern solutions, it is hard to convince early adopters to trust the brand. Even when that happens, it is challenging to retain customers in the face of new FinTech applications coming up.

Solution: Content strategy & social media campaigns.

To convert leads to loyal customers, you must first understand the four stages of a customer journey. It begins with attracting the customer, convincing and closing them towards a purchase, or any conversion for that matter, and finally creating repetitive customers and word-of-mouth advocates. 

So to do that, we need to understand the customer segmentation and prepare a marketing strategy to target them. This strategy will serve as the base for customer acquisition and sales pipelines for the next few months to get the early adopters rolling and create the buzz.

Once you’ve managed to rope in new customers, the key here is to retarget them with marketing messages to ensure you stay in their minds. You can use user stories, reviews, and educational material to help customers engage more with the product. 

You might also like: Step-by-Step Roadmap to Developing an MVP

2. Choosing the Right Tech Stack & UX

The right tech stack plays a vital role at every turn in any business, especially for a technology-driven market like FinTech. The tech stack will determine the performance of your application. It will help your developers code faster, which means faster development cycles and product updates.

However, choose the wrong tech stack, and you’ll find yourself taking a long time to fix even the basic bugs. Sometimes, when a platform or a language becomes unsustainable, it can mess with the whole balance of your application. 

Solution: Look for commonly-used tech stacks in FinTech with your system architects.

When choosing the frameworks and programming languages to use for product development, you need to do in-depth research on every technology you choose. The right tech stack will make your job so much easier to maintain your codebase and spend less money on maintenance costs.

You can start by comparing the popular tech stacks already being used in the FinTech market and evaluate them based on your useability requirements and budget. Make sure to give your system architects a free hand to choose the best tech stack they believe would help implement your idea. 

Here are some of the common FinTech tech stacks used:

  • Java 
  • Python
  • PHP
  • C++
  • C#
  • Ruby
  • Kotlin
  • Node.js
  • MySQL
  • SQL Server

FinTech companies use Scala, Ruby on Rails, .NET, and Go for blockchain projects. You can choose the ones that work well with your product idea and integration requirements.

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 3. Ensuring Tight Security & Data Privacy

Did you hear about the ransomware attack on Finastra just a year back?

Finastra, one of the world’s largest FinTech companies with offices in 42 countries, took their servers offline voluntarily in March 2020 when they noticed a ransomware attack. 

When such top financial firms are vulnerable to unscrupulous attacks, it is even scarier for any new and upcoming FinTech company. 

“71% of adopters worry about the “security of their personal data when dealing with companies online.”

A survey by EY on global FinTech adoption in 2019.

With customers being concerned about their data security and privacy, it is essential more than ever to reassure them with foolproof security features.

Solution: Establish high-level security

Customers trust FinTech apps to keep their confidential banking information safe and secure. 

You should employ high-level security features like AI fuzzing, data encryption and obfuscation, behavior analysis, and other relevant technologies to make your process secure. 

On the customer side, you can implement two-factor authentication, biometric authentication, and real-time alerts through messages, emails, and phone calls and educate them often about the best ways to keep their information secure. 

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4. Scaling the Startup

The lifecycle of a startup looks something like this: Create a product, customize it regularly to fit the market needs, generate loyal customers, reduce customer acquisition costs than customer lifetime revenue, create a loop of happy customers bringing in more, and finally, scale.

While numerous FinTech startups excel at most of these initial stages, only a few have entered the scale-up mode. This is majorly due to a few specific reasons:

Solution: Collaboration between the fast-growing FinTech startups and corporates

One potential and effective solution for scaling-up challenges is a collaboration between the startup and corporates.

While there are collaborations in the FinTech market between lenders, banking service providers and startups, a partnership between a FinTech startup and a large organization for scaling would be different. 

Based on the space you’ve carved out in your niche, you can add value to corporates in exchange for taking a load off your scaling needs. This could prove beneficial in increasing reach and cutting acquisition costs.

Complying with Government Regulations

FinTech companies are under tremendous pressure to understand and comply with government regulations. When there’s a breach in compliance, it can lead to major trust issues from the end-users, not to mention the struggle with the government.

“According to a survey by PwC, 82% of people believe the government should regulate the data used by companies, and 80% agree that government regulations are crucial for protecting customer information.”

With customers stressing the importance of compliance, it is essential for companies to be on top of it.

Solution: Hire a consultant to oversee the compliance

Government regulations are in place to protect the customers. So, companies must ensure that their transactions and operations are well within the observations. And one of the best ways to do that is to hire a legal consultant. 

This consultant can help ensure that you’re following all the regulations and keep you informed about any new regulation updates. The consultant can also sit in for new features or product developments and advise the team on the rules. 

For US FinTech companies, here are some of the regulatory laws and institutions that need to be followed:

  • Federal Trade Commission
  • Consumer Financial Protection Bureau
  • State’s data breach notification laws
  • Gramm-Leach-Bliley Act
  • Financial Industry Regulatory Authority 
  • Fair Credit Reporting Act 
  • Fund Transfer Act 
  • Federal Deposit Insurance Corporation
  • Securities and Exchange Commission
  • Commodity Futures Trading Commission
  • New York Department of Financial Services Cybersecurity Rules
  • Financial Crimes Enforcement Network’s Anti-Money Laundering laws
  • CAN-SPAM

You should also comply with the European Union’s GDPR if you have customers from Europe. 

Wrapping Up

FinTech apps are growing in number, and competition is becoming intense. While there are many challenges, you can turn them into an advantage with a few purposeful strategies. It is vital to stay on top of your customer requirements, security features, and regulations to register that initial success and make way for scaling and keep providing the best user experience.

Also, read our article How Startups Can Leverage Artificial Intelligence and Machine Learning for more information that can help you. What is your biggest challenge as a FInTech startup? Let us know in the comments below.

Robotic Process Automation: Everything You Need to Know

Businesses across the globe are evolving at a rapid pace. Automation technology is a significant aspect of a successful business and it is changing the way organizations work. A McKinsey & Co. survey reported that 66% of business leaders planned to automate at least one business process in their organization in 2020. Emerging technologies like Artificial Intelligence (AI), Machine Learning (ML), and Internet of Things (IoT) are accelerating the growth of businesses and leading towards a much sophisticated technological infrastructure for the world.

As automation technology gains momentum, you can find one crucial aspect of it – the Robotic Process Automation (RPA) industry growing at a terrific rate. Did you know that the RPA Market, while only $250 million in 2016, is expected to grow to $12 billion by 2023?

Why is it creating a buzz around the world? How is RPA becoming the rising star of the world of automation technology? And how can it benefit your business?

Let’s find out.

What is Robotic Process Automation?

In today’s tech-savvy world, where robots are playing a pivotal role in the routine life of mankind, the mere idea of a robot handling all your operations just seems very absurd. But well, here’s a major difference. Robotic Process Automation isn’t the concept of a robot sitting on a chair and carrying out operations like humans. In the case of RPA, there is no physical presence of a robot, but it is a software bot that more accurately and efficiently manages your things. They’re capable of having personal interactions like humans and efficiency of an automated application.

As per Deloitte Global RPA Survey, Robotic Process Automation will achieve a “near-universal option” in the next 5 years. The dynamic architecture and exceptional flexibility have made it tough for organizations to turn a deaf ear to RPA. With the implementation of RPA, businesses are able to leverage comprehensive insights from the customer’s needs and quickly adapt to the changing market dynamics.

Benefits and Applications of Robotic Process Automation

Benefits

Amongst all the diverse advantages of RPA, the major benefits are as follows:

  1. Business Analytics and Insights

With RPA, it is easy to store, organize, track and analyze all the data related to your business operations. It delivers significant insights from the data, that assist you in decision-making processes and ensure better execution.

  1. Cost Savings

RPA collectively handles all the robotic and human workload across the respective platform. Work is not just automated but is completed in a much shorter time duration, which further saves up the expenditure. With its integration with AI, it is able to deliver a personalized customer experience and develop innovative solutions as well.

  1. Improved Security

The bot performs all the tasks with utmost functionality and efficiency. The information and data related are well processed, documented in the database, and aren’t leaked in any form.

  1. Employee Management

To utilize RPA and bring the best out of it, one doesn’t require any exceptional technical skills. RPA is easy-to-use for the end-users and employees can thereby use RPA for their tedious and repetitive task that saves up a ton of time.

  1. Better Flexibility, Visibility, and Control

It’s just a myth that RPA is going to replace humans. But in reality, with its excellent productivity, efficiency, and accuracy, RPA is bound to provide a much-needed helping hand for businesses. With a non-disruptive approach, RPA keeps the existing technological infrastructure of the business intact even after its implementation.

Applications

Here are a few applications of RPA that would reshape your current business ecosystem in a much constructive manner:

  1. Finance: Assists in Financial Planning and Analysis, maintains bank statements, and tracks daily P&L.
  1. Human Resource: Automates hiring and employment procedures, processes payrolls on time, assists in expense management, and acts as a virtual assistant to the employees in the HR department.
  1. Customer Relationship Management: Reduces churn and generates customer leads, updates data and queries related to customer experience, and provides personalized solutions.
  1. Supply Chain Management: Effectively tracks the inventory and looks after the trade promotion and analytics of retail.
  1. Manufacturing: Automates management of raw materials, mechanical components, and logistics systems throughout the product life cycle.

Top RPA Companies in the US

The big picture of the RPA landscape in the US covers some prominent names. 

  1. UiPath

UiPath designs and builds RPA software solutions for industries across finance & banking, healthcare, telecom, insurance, retail, public sectors, etc. These include automation cloud and analytics, enhanced automation with ML & AI, chatbots and action centers for robots, etc. 

  1. Nintex

Nintex provides automation tools across sales operations, human resources, customer services, legal support, marketing, etc. It helps firms to develop a complete business process mapping, enhance control process, and assists in customer onboarding. 

  1. WorkFusion

WorkFusion creates RPA solutions for sectors like insurance, healthcare, and finance & banking. The startup helps in deploying hyper-automation solutions, document intelligence, manages end-to-end automation workflow, and scales automation across multiple dimensions of businesses. 

  1. Kryon

Kryon provides a full-cycle automation suite for business operations. WIth RPA-integrated solutions and Hybrid Automation, the Kryon robots help in cost savings, increase productivity and efficiency, improve customer experience and ensure utmost security.

  1. Infinitus

Infinitus develops voice RPA tools for the healthcare and insurance sectors. They aim at automating business communications and improving human interactions. Their platform primarily looks after the customer experience and employee management across pharmacies and insurances.

Scope for Robotic Process Automation in the US

Valued at $1.4 billion in 2019, the RPA market is expected to grow at a phenomenal CAGR of 40.6% from 2020 to 2027. In fact, in 2019, North America dominated the market by a whopping 37% share of global revenue. SMEs are reaping the benefits of bolstered productivity, improved resource utilization, and data-driven decision-making. The operations of the supply chain, healthcare, finance, human resources, etc. have become accessible to both consumers and businesses, thus leading to increased profitability and hence, market growth. In fact, 78% of the businesses that have adopted RPA, plan to increase their investments in the upcoming years.

The upward curve of RPA adoption is paving the way for more and more businesses to dive into the evergreen market and strive for getting ahead of the curve. Raising the bar for RPA, even the US Government encourages other agencies to adopt RPA tools across different use cases.

Final Thoughts

Technology never ceases to amaze us. Ever since the emergence of RPA, it has been changing the way global businesses work, making business processes more productive and eliminating inefficiencies. The intensifying focus on RPA and increasing investment in the sector are helping companies achieve significant targets. Forrester estimates that more than 4 million robots shall be operating in the corporate cubicles by 2021. There will never be a better day to unleash this diamond in the rough.

Are you ready to create a breakthrough in the world of RPA?

10 Pitch Mistakes Entrepreneurs Need to Avoid

A great pitch can open doorways to resources that can help you grow and scale by leaps and bounds. A bad pitch, on the other hand, is a missed opportunity. Pre-empting what could go wrong with your pitch will stop you from derailing your pitch through some very avoidable mistakes. Here are 10 of the biggest and most common mistakes entrepreneurs need to avoid when making pitches plus tips on how to fix them.  

1. Not Being Part of a Peer Network

When it comes to pitching, your strength is in the numbers. Build relationships with other entrepreneurs, thought-leaders, and mentors. Leverage these to keep abreast of opportunities and potential challenges in the marketplace. Being part of a peer network will help you gain valuable insider intel for new business ideas and also gain advice and support for your actual pitch. You will get a feel for what works and doesn’t work in your specific niche.

2. Not Doing Your Homework

Coming up with a great business idea and a successful pitch both require extensive groundwork in the form of research. Ask yourself these important questions. If you don’t have answers to any one of them it’s time to go back to the drawing board:

  • Have you successfully validated your business idea?
  • Do you have market research and competitor analysis that you can provide to support your claims?
  • Have you created a solid business plan? This should include a revenue model and a marketing strategy. In other words, how do you plan to make money and how much are you realistically projected to make?
  • Have you identified key milestones that you can plug in your pitch? These can be the successes that you’ve had along the way in terms of sales, other buy-ins, and new contracts, for instance.
  • Have you researched your potential investor, their approach, and interests so you can adapt your pitch accordingly?

This kind of in-depth research gives you the raw data to form the backbone of a very convincing pitch. Once you have the material, it’s time to put it together.

3. Not Structuring the Pitch

It’s necessary to structure your pitch so that your thoughts are laid out in a lucid, step-by-step, and methodical manner. Without a structure, your presentation can seem haphazard and unplanned, both of which are red-flags for your pitch audience. Ideally, a pitch should consist of the following:

  • An introduction about who you are and what your company is about. If you have a powerful or inspiring story that led to the creation of your startup, this would be a good time to talk about it. Also, discuss your team members and how their strengths contribute to your business.
  • Talk about the problem that your product solves and how it attempts to do so. Provide specific research and examples to support your case. If you can bring a sample for your audience to look at or conduct a short demo, it can make your pitch a lot stronger.
  • Provide a synopsis of your business plan, market research/validation, and competitor analysis.  
  • Talk about the challenges you foresee and how you plan to work through them.
  • Discuss the financials and projections. Always have the right numbers on hand and be able to substantiate them if required.
  • Q & A session to address investor questions and concerns.

4. Making Excessively Short or Long Pitches

Your pitch should be short, succinct, and super-focused on the essentials. But it can’t be 5 minutes or less either. Unless you’ve been allocated a specific timeframe, aim for a good 20 minutes for your pitch. Experts agree that this is an ideal timeframe to cover everything you need to but at the same time keep things concise. On another note, having this timeframe in mind when preparing your pitch will also help you narrow down on the absolute essentials to keep in your presentation. Cut anything that doesn’t add value or provide new information.

5. Not Being Able to Pitch on the Fly

You never know when you might be called to pitch. Aside from the usual places where you could bump into them like business meetings and conferences, you could meet potential investors at a coffee shop, or at the airport as you shuttle in and out of destinations. It helps to have a pitch in hand for all of these occasions. 

6. Not Effectively Presenting the Pitch

Two of the biggest deal-breakers with pitching, are a sloppy appearance and ineffective presentation skills. Happily, these are easily resolved. 

  • Appearance is everything in business. But it doesn’t mean that you need to dress expensively. There are plenty of budget-friendly options for formal attire that you can wear instead. It’s a smart idea to rely on classic grooming tips i.e.keep a tidy, easily-maintained hairstyle. Facial hair should be trimmed neatly.  Wear fresh, well-pressed clothing free from wrinkles and stains. If in doubt, wear a light, conservative fragrance. 
  • Practice your pitch in front of the mirror first and then in front of peers. Communication is both visual and verbal. Look at how you can make your presentation better in both aspects. Inc has a comprehensive guide on presentation skills that you can find here

7. Being too Salesy

The overbearing-salesperson-pitch was, and still is, an investor/partner turn-off. The average consumer is only interested in how your product or service will help them or make their lives faster, better, or easier. The average investor is looking for a great idea backed by a solid plan. When you pitch, always focus on the benefits because aside from a bullet-proof business plan and strong numbers, these are all that count. 

8. Being either Overconfident or underconfident 

Confidence is tricky to get right. Overconfidence comes across as cockiness, while a lack of confidence makes you look unsure and unable to take up responsibilities. Being confident is simply about having a realistic sense of trust in your abilities without feeling the need to be superior to others. If confidence doesn’t come naturally to you, it’s important to expose yourself to as many situations as possible which require you to speak. Sign up for speaking lessons, if you feel you need a helping hand. Investors need to see a healthy sense of confidence in the pitch, otherwise, you will find it hard to win their trust.

9. Not Being Prepared for Questions or Feedback

Always leave some time in the end for a Q&A session. It shows that you’re transparent and available to address grey areas. If you’ve done the level of preparation outlined earlier in this article, you should be able to confidently address most questions. If there is anything you genuinely cannot answer, it is best, to be honest. Trying to fluff your way out in the presence of seasoned investors will work against you.

10. Inability to Learn from Rejection 

Pitches take time to perfect. Even seasoned veterans take the time to prepare no matter how long they’ve been doing it. If your pitch was disastrous, it’s really not about the fact that you fell. It’s about whether you can pick yourself up again. Review what went wrong during the pitch and think about what you can do to make it better the next time around. Speak to your mentors or other veterans for their feedback and guidance. Use this intelligence to refine your next pitch. There isn’t any reason you can’t bounce back from defeat if you’re willing to do the work.

Also read our guide Pitching to Investors: Best Practices During the COVID-19 Crisis for more information that can help you. What is your biggest challenge when creating your pitch? Let us know in the comments below.