To reach fintech’s next level, infrastructure providers need to address these pain points – TechCrunch
We’ve all seen the headlines: Fintech is struggling. Since last year, valuations are down 70-80%, deal activity is down 67% and layoffs have plagued many former industry favorites.
But fintech is resilient. Innovation continues to drive new developments in lending, payments, crypto and especially infrastructure, showing that the industry still has plenty of room for growth. And although investment activity decreased this year, it is still well above where it was in 2019 and 2020.
Infrastructure providers have a unique opportunity to be a bright spot in the midst of all the doom and gloom. Over the years, infrastructure has enabled fintech companies and non-financial services companies to seamlessly integrate financial products into their platforms.
But as the market became crowded, infrastructure providers have begun competing to develop the cheapest product and sign the most fintech companies. The infrastructure market is overlooking a key opportunity to build additional product capabilities that address pain points arising from the fintech struggles.
Infrastructure providers can help connect fintech companies with incumbent banks so that they can both reap the benefits of the interest rate environment.
Infrastructure providers need to re-prioritize and find a way to expand their capabilities for their current customers rather than just signing new ones. To do this, they need to look closely at the problems that customers deal with on a daily basis. What does a fintech company do when it is under a fraud attack? What does a new UK compliance order mean for your business? How do they retain customers who are terrified of news about soaring interest rates and inflation?
These are the questions fintech industry leaders face daily, and infrastructure providers need to understand how they can help answer them.
Identify and address pain points
The influx of huge amounts of cash in the financial infrastructure sector has crowded the space with newcomers. Addressing specific fintech pain points is not just a way to help the fintech industry; it is also a way for infrastructure providers to differentiate themselves and show that they provide real value.
International coverage
The attraction of more customers and revenue streams has prompted fintech companies to explore international waters. In an increasingly globalized world, international coverage is no longer optional.
Infrastructure providers must meet their customers’ appetite for global growth by ensuring their platform is available in countries outside the US. They must also ensure that their platform helps fintech companies stay compliant with rapidly changing global regulations – more on that below.
