What it takes to build a disruptive Fintech company in 2023

Fintech remains one of the fastest-growing sectors of the tech industry, and with that, the number of entrepreneurs and innovators trying to disrupt the space continues to skyrocket every year.

Fintech’s growth is due to a number of factors. The enormous capabilities of AI and automation are changing how the financial industry operates. A constantly evolving regulatory landscape requires new technology to keep up. And the challenges that must be solved in all arenas from financial markets to data analysis and digital transformation require disruptive fintech.

For founders who have the tenacity to face the obstacles that come with disrupting one of the most lucrative industries on the planet, the rewards can be staggering. But it doesn’t come without navigating complex challenges related to product development, team building and cultivating trust in a difficult industry.

How to build an innovative, cutting-edge Fintech company

Startups face quite a few trials when they first get off the ground. Whether you’re competing for funding or trying to find the right candidates for the job, there are many steps a new business must take before they can succeed. Building technology platforms that serve investment firms, banks and other financial institutions also presents its own challenges.

Innovation is not always easy. Fear of investment, lack of leadership and the inability to deliver ideas to the market can prevent a startup from succeeding. The market is uncertain, and those who are not prepared will soon be forgotten.

But by working to build trust, create change and communicate value while managing potential risks, you can create a cutting-edge fintech company for the modern world.

Build trust

It is important to remember that the financial services industry moves slowly, especially when adapting to new technologies. Many organizations operate on legacy technologies, and some operate without any at all.

With so little faith from their customers, up-and-coming tech companies need to build a sense of trust in their products to succeed, which will make it easier for businesses to rely on your services without fear of getting burned.

According to Stephen Roche, president of Saphyre, a leading fintech platform that helps banks automate and accelerate pre-trade onboarding processes, “You have to instill confidence that a technology is real and here to stay.”

Make meaningful changes

Ironic as it may sound, change is the only constant when it comes to technology. Fintech companies rely on a rigorous process of development, evaluation and improvement to ensure their products stand the test of time. However, the development process is not the most important factor for users.

Many legacy financial organizations are wary of trying new things, which means fintech companies need to demonstrate the benefits that their product can provide and how it can make them more competitive in an ever-changing market.

While each version and iteration is different and changes are important. The customer is going to want to know how each change affects their bottom line. Does the processing speed up the elimination of an error? Does a new version of a tool improve performance? Explain changes in a user-focused way, and make changes that matter to your users.

Administer regulations

Companies operating in the financial industry face strict rules that they must meet in order to maintain compliance with the law. Failure to do so may result in financial penalties or worse.

Many decisions that financial institutions make are directly influenced by the regulatory requirements under which they operate. For your fintech platform to succeed, you need to be able to help them seamlessly navigate the regulatory environment and ensure they don’t run afoul of the law.

Businesses will not have the risk of being penalized or reprimanded for questioning the current compliance structure. So to build a successful fintech company, don’t fool them. If you can guarantee that they meet regulations and industry standards, it will also help you earn their trust.

Communicate value

Companies often cannot see the full picture of what a product or service can provide them. For financial organizations, there is a general reluctance to make purchasing decisions without first understanding the risks.

Changing minds is not always an easy thing, especially in the financial industry, which makes it all the more important to communicate why companies should approach you and your product. By demonstrating the value of your product, you make it easier for cautious business leaders to choose you as their source of financial technology.

Roche states that “Financial clients don’t get fired or get in trouble for the tried and tested – there is a reluctance to work with cutting-edge fintech firms unless they clearly understand the holistic value.”

Building a disruptive business in any industry comes with struggles, but entering the financial space as a technology company brings more challenges. Keeping these tips in mind can help. Above all else, make sure your business offers recognizable value to your customers.