What it takes to scale a fintech internationally

As the growth of fintech slows, scaling remains a key priority for entrepreneurs. To achieve this, startups must navigate the regulatory landscape of different countries, overcome cultural and language barriers, and manage payments and other transactions in different currencies.

All of this can be significantly difficult for businesses, but it can be achieved. This is how.

Internal and external obstacles

Pranav Sood, managing director, EMEA at global fintech airwallex, thinking about scaling fintech in two ways — one is the internal obstacles and the other is the external obstacles.

“If you’re a small business that’s just getting started, it’s a pretty big turn off if your customer is told they have to pay in a currency that’s not their own.”

“Internal means as a business, how do I set up my own operating structure to get money moving around the world the way I need it to?” he says. “External means how do I ensure that the products I offer meet the needs and expectations of my customers.”

In the external capacity, it is important to remember that you must be able to meet the customers’ needs and preferences when it comes to the currencies they pay in, the payment methods they use and the payment cards they collect.

“Take, for example, accepting payments in US dollars everywhere in the world,” says Sood. “That’s probably fine if you’re Google or Meta, but if you’re a small business that’s just getting started, it’s a pretty big turnoff if your customer is told they have to pay in a currency that’s not their own.”

Jumping the hurdles

When a fintech company is ready for global expansion and growth, there is a lot to consider, further complicated by a uncertain economic market.

“Economic volatility and changing compliance and regulations are here to stay, so it’s important to do things the right way to enable long-term sustainable business.”

“More than ever before, the outlook for fintech in 2023 will be driven by external factors and ongoing economic uncertainty,” said Dinghua Liu, SVP of Customer Experience and Operations at Airwallex. “In this context, the important thing to overcome challenges and enable more growth is to be robust as a company and to be very focused and disciplined with how you scale.”

Liu notes the importance of working with the conviction and ability to drive operational and functional excellence. She recommends looking at regulatory and business requirements, and tracking your ROI to assess overall impact

“Economic volatility and changing compliance and regulations are here to stay, so it’s important to get things right to enable long-term sustainable business,” she says.

Cooperate

As a founder, it is important to recognize where your expertise lies. Many managers try to wear multiple hats in business, but this can mean that attention is diverted from where their skills really lie. Here, collaboration with another start-up can prove fruitful.

Dann Bibas is GM international at Public.com, a US-based investment platform due to launch in the UK this year. Public.com has partnered with Airwallex to help meet the needs of its customers in emerging markets.

“The benefit of partnering is that you can pick and choose the pieces you need and hopefully adapt their distribution to your needs.”

“When you’re building your product and starting to launch in new countries, there are constant regulatory, operational, technological and marketing considerations, and they’re all interconnected,” Bibas tells Sifted.

“Partnering allows you to immediately leverage a solution that is more sophisticated, more advanced and perhaps even more economical,” he continues. “With the right partnerships, you have the advantage of working with teams, technologies and processes that are more established in new markets. The knowledge sharing between partners can also be incredibly valuable, especially if they have been in the market longer and have worked on similar use cases with other customers.”

Sood believes that in most cases partnering is the best option for companies – especially those scaling up – because the overhead and complexity involved in building out new infrastructure is high. He says that unless you’re an infrastructure company, it hardly makes sense to try to solve these problems yourself.

“The advantage of partnerships is that you can pick and choose the pieces you need and hopefully tailor the distribution to your needs,” says Sood. “When you have to build this yourself, you have less flexibility to do this because you have to do all the basic elements before you can even start thinking about modularity.”

Room for scaling

While financial landscape for fintechs in 2023 will be challenging, fintech has driven change in financial services – and technology will continue to play an important role in the sector.

“Continue to use technology—either your own or from another fintech—to solve problems in an innovative way,” says Liu. “Try to be disruptive and always think about how you can improve services and products for your customers.”

“At the end of the day, fintech is a people business – it’s about having the right people in the right roles.

Liu emphasizes the need to surround yourself with the right team that can help you scale and spend time hire the right person rather than hiring to fill a gap — a sentiment Sood also shares.

“At the end of the day, fintech is a people business – it’s about having the right people in the right roles,” he says. “Now more than ever, it’s really important to be as picky as you can be about the people you bring in and clear about the standards you expect.”

Liu adds that with fintech, hiring someone locally can be critical. “Make sure you hire the right talent to support your growth internationally – having someone in place who has the local knowledge and can support your ambitions will be a key piece of the puzzle,” she says.

Sood also notes how integral it is to be clear about what your minimum viable offering looks like and ensure that when you invest in scaling, you can reach that level.

“People can often get stuck in a trap of offering something that doesn’t actually meet customer expectations in the market, and then be surprised that it doesn’t take off, not invest in it and then not see the growth they need to see,” says Sood .

“It’s really important to be clear about what the minimum you need is to really make sure your product flies with the customers you want to serve.”