Financial Technology (Fintech) is the technology that aims at bringing new innovation is the financial methods. Fintech industry aims at bringing new ways to assist the businesses in making their financial and business management processes more advanced, automated and smart. To sum up you can say that fintech is the perfect example of a hybrid business model (a combination of Artificial intelligence and Human Intelligence).
Fintech based businesses are gaining a higher share in the financial industry. Banks and financial institutions are inducing fintech solutions to their business models. Recent pwc report showed that global investments in fintech will exceed $150 bn in the next 3 to 5 months. Fintech businesses are picking up hike in the world. This survey also declared that fintech will most probably affect the consumer banking, fund transfer and asset management part of the financial sector.
What must be a part of fintech business model
Follow the regulations:
Regulatory compliance is a vital part of the fintech industry. If you want to stay in business for long and do not want to indulge in legal problems then your business must be following the General Data Protection Regulations (GDPR) regulations and compliances being practiced in your region.
KYC and AML compliances:
Know Your Customer (KYC) and Anti Money Laundering (AML) compliances must be followed. ID verification services are used by many businesses. These service providers filter the customer base of the companies and help them mitigate the risk of managing the assets of blacklisted people (fraudster, money launderers, identity thieves) from any part of the world.
Smart data management for customer confidence:
Fintech startups should smartly manage and secure the data of their customers. Customer confidence is the key to success. Many businesses are using the SaaS (Software as a solution) products to secure their data.
Follow the trendsetters:
Before putting the foot into fintech business, research about the trendsetters of the fintech industry. Research about their guiding principles, their weaknesses and how they catered to them, their strengths, etc.
A unique business idea:
Fintech is the next big thing, it has been still evolving. Try to find a loophole in the industry and try to cater to that loophole. A good startup idea should always be unique and well thought.
Need for innovation:
Fintech industry revolves around complex data management and handling techniques. Continuous and rapid advancements in the fintech industry have increased competition. Fintech businesses need to bring innovation on a regular basis.
A strong team comprising of devoted individuals:
Like every other startup fin-tech startups also need a strong devoted team of self-motivated individuals. The team must consist of people who have experience in fintech related experience.
Having strong investors:
Fintech is an evolving industry but it requires big investments, due to its versatile and unique business model. Fintech is a very huge industry with a lot of growth potential. Having a strong investor base will help the company to stay in the industry for long also will reduce the risk of takeover or acquisition.