Fintech momentum has fueled an explosion of solutions tailored to niche demographics and new Fintech startups are springing up daily. In fact, it’s only a matter of time before there’s a neo-bank catering only to aliens in disguise. Yet success in this space is not a foregone conclusion, regardless of the expanding fintech landscape (and compelling evidence supporting the existence of UFOs). In reality, the journey from business ideation to launch must be carefully traveled and is fundamental to the long-term viability of any fintech product.
As co-founder of social trading and multi-asset brokerage, eToro, where I currently serve as Executive Director, I have experienced firsthand the thrills and stress of launching a successful fintech business. Having spent much of my professional life firmly rooted in the product side of fintech, entrepreneurs frequently ask me what constitutes good product practice in this space. Given the lack of readily available, domain-specific resources, I’ve put together my own foundational checklist of key considerations when it comes to bringing a fintech product to market. Let’s take a closer look.
1) Onboard a digitally strong product manager
So you have identified a gap in the market or an opportunity to reach consumers with an innovative product. Good game! Once you have your target audience in mind, or even potential customers waiting in the wings for your product launch, you need to find a product manager with strong analytical skills – someone who can guide you from ideation, adaptation to the market, integration of customers. If your product manager isn’t digitally oriented, you’re in trouble. At its core, fintech is about managing formulas and reconciling numbers. You’d be surprised how many companies ignore this in their recruiting efforts and learn the hard way.
2) Be familiar with fintech trends
It may seem obvious, but you need to develop an airtight understanding of your field. Familiarize yourself with trends, challenges and opportunities. Do your homework. What missteps have been made by industry players in the past? What recurring success attributes can you identify? Stay up to date on reports and industry news and keep a close eye on consumer sentiment surveys. This information will go a long way in informing strategic direction and will greatly improve your chances of developing a product that lasts longer than a cup of coffee.
3) Understand the regulatory landscape
For most areas, the product management success triangle encompasses product, development, and marketing. For fintech, compliance is a central fourth pillar. Start thinking about the potential future implications of non-compliance, both from a reputational and operational perspective, and don’t move forward without a regulatory strategy. When you’re first building a fintech startup, there’s a fine line between exploring a nascent or “grey” area and meeting regulatory compliance. For example, when Venmo launched, they didn’t have a money transfer license and ended up having to pay fines after the fact. Venmo likely had limited resources and a high risk appetite at this early stage of development, but in today’s regulatory environment, your startup might want to think twice. Engage with lawyers and compliance officers to get their thoughts on your offering and learn the lay of the land before diving in head first.
4) Implement robust security protocols
As part of a strong culture of compliance, the security and integrity of the system architecture are extremely important. Cybercrime is on the rise, and fintech products that aren’t foolproof from a security standpoint don’t stand a chance. Security breaches and system failures are stains on a company’s permanent record and customers may not be too forgiving when they occur. Who carries out your audits? What encryption is used? Do you have a contingency plan in place in case of a crisis? These are just a few key questions to consider. If there is a history of service interruptions, system crashes, DDOS attacks, or other nefarious activity, your chances of building trust with today’s savvy clientele are limited, in especially when it comes to their finances. Which brings me to my next point.
5) Establish a relationship of trust with your customers
Instilling a strong sense of trust in your target audience is intrinsically linked to the success of a fintech product. Think about it: you expect consumers to trust you with their hard-earned money and sensitive financial information. The stakes are high, so make sure all product branding and website copy is transparent and informative. Remember that the website will likely be the first port of call for any potential customer. To establish credibility from the start, your site must communicate a sense of robustness, rigor, and integrity in both the product and the business. In this space, granular level details are very important.
6) Cultivate an emotional connection with users
I don’t think anyone would be shocked to learn that people don’t like finance-related administration. However, the downside of switching providers is an equally unappetizing prospect, and very often users stick with outdated solutions to save themselves the administrative headache. Once habits are formed, it is difficult to bring about behavioral change in this area. To be successful, you need to build experiences based on a clear understanding of end-user needs. Also consider that people often act irrationally when it comes to their finances. For example, many Millennials use debit instead of credit, giving up the chance to build a credit history or earn hundreds of dollars in cashback. It’s commonplace, peer-approved behavior, but it actually doesn’t make sense, especially when Millennials who use debit cards clearly have enough funds to pay for their purchases without going into debt.
Build to disrupt
The foundations are in place for a phase of deep transformation of financial services, for which customers are absolutely ready. By looking beyond the safer strands of innovation – usually around user interface and economic improvements – and taking steps to design your product from the ground up, you can deliver your product in a completely new way. , instead of just refining a legacy offering.
The scope of innovation currently taking place in the fintech space is staggering, with neobanks, digital brokers and a treadmill of new customer-centric solutions defining a new financial services landscape. Given the dynamism of the industry, it’s tempting for would-be entrepreneurs to try their hand at launching the next big business. However, if built in haste, lofty ambitions will fall flat. Building trust within an end-user community is the name of the game, and it can be achieved with a consistent brand message, robust security, and a firm grip on the regulatory environment. Beyond that, your product needs to make a tangible difference in customers’ lives – delivering something they’ve been itching for or something they never thought they needed. Certainly not an easy path, but extremely rewarding.
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About the Author: Ronen Assia is the managing partner of Team8. For over twenty years, Ronen has successfully fused technology and design into useful and accessible products, defining the user experience across various devices and platforms. Most recently, Ronen served as eToro’s chief product officer, managing product and engineering, and helped build the company into a fintech unicorn serving 13 million users in over 140 countries. Since January 2020, Ronen has been a member of the board and non-executive director of eToro.
Ronen holds a BA in Industrial Design from the Bezalel Academy of Art and Design in Jerusalem and an MA in Product Design from the Royal College of Art in London.
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