Although Fintech solutions have not been able to take on banks as the primary fintech solution providers, they have done something different and more inspirational. They have changed the world in a way that businesses, across industries, are taking lessons from Fintech startups.
It has been more than a decade since the Fintech revolution came into existence, fuelled by the great financial crash. But everytime the banking circles of New York or London are told that a new Fintech startup company is emerging to eat up their lunch, their reaction is the same smirked “will see”.
And let’s be honest. Their smirkness birthed by the belief of how difficult it is for Fintech to push them out of business is not a castle in the sky. Even after a decade of their existence, the validity of fintech’s capability to reach heights in the global finance domain is unestablished. There are still no Fintech companies in the Fortune 500 or S&P 500 list. This has kept the industry several steps behind in the banks vs Fintech startups comparison.
While there is one thing guaranteed for this year – banks are irreplaceable. But what the Fintech domain must be accoladed for is the continuously rising user adoption rates and all the investments in successful Fintech Sectors it is attracting.
The adoption and the blessed hand of investors have together charted a Fintech market growth which is poised to be worth US$26.5 trillion in 2022, with a 6% CAGR.
The fintech app development trends added with technology adoption like IoT in Finance and Blockchain in Finance have given rise to a number of new use cases which are being explored by the domain, globally.
Another thing which has brought about this rise in trends is the growing user adoption rate. There are many things that the world loves about the Fintech domain, here are some of the main reasons behind the users’ side of Fintech market growth –
On a different, unpredicted note, fintech app solutions are embedded with some key business lessons for modern-day entrepreneurs. These lessons from Fintech startups are a result of their efforts taken to revolutionize how financial transactions are conducted – in a way that is completely different from the traditional approaches. And how they are behind a long list of problems solved by financial applications.
Reasons Why Fintech Mobile Apps Are Role Models for Any Industry
1. A focus on user-friendliness = The shortcut to success
There are very few people who like doing finances. Majority of us find financing boring, confusing, or simply complex. Fintech apps, going by the standard that has been set by the likes of top Fintech companies such as PayPal and Robinhood etc follow Steve Jobs’s definition of a good UX principle to its exactness.
“Design is not just what it looks like and feels like. Design is how it works.”
Simplicity and a clear consumer understanding lies at the center of Fintech applications. The interfaces, as you would see in most instances are uncluttered, clear, and display what the users expect. For conveying information a lot more vividly, they even use functional animations and the core applications of minimalism. At the back of this functionality, a Fintech brand, Numbrs raised $40 million funds making it a unicorn.
2. Giving fintech business solutions to customers’ problems is the direct path to customer loyalty
No matter which Fintech app you pick, you will find them fulfilling one core purpose. It can be anything from helping customers set a budget through a Cleo like app and send money to their friends using PayPal to making investment easy through Robinhood application.
What has worked for the best Fintech companies is knowing their customers – the events where they would trust a third party application and ones where they will want to limit their interactions with their bank’s application.
The other thing which all the business model of fintech companies follow is knowing the problems associated with traditional banks: delayed transfers, high transaction fees, and some other key mobile banking limitations. An approach that offers them insight is the product design sprint. The sprint which is conducted mostly in the span of 5 days helps businesses with validating an app idea on the front of feasibility and users preferences by including the actual prospective users in the mix.
3. Use of Interactive Elements is what your users need. Heck! what your business needs.
A good percent of the Fintech user base is made of millennials and the Gen Z. And, unlike a number of digital sectors, they know how to keep the user engaged.
In order to prolong users’ time inside the application, the Fintech app developers don’t shy away from putting in unconventional in-app elements in the mode of games, contests, etc. the intent that they aim to follow is also around educating their users about the new product launches or features’ additions. In return, the users generally receive rewards which can be both intangible – low interest rates, subscription, and discounts or tangible like gadgets or event tickets.
4. Correct Application of Voice Assistants & Chatbots is how you open business to the never-sleeping Gen Z
Chatbots are known to change a business’s growth story. This is something that almost every sector knows but very few apply in their business process. Fintech is not a part of the latter.
The chatbot’s specific answer to how does Fintech work lies in using bots for serving a plethora of functions, while not shying away from making their brand a part of leading virtual assistants like Google Home and Siri, Amazon Alexa.
Here are some use cases of how the domain employs voice assistants and chatbots to expand their reach in the sector –
From checking the account balance to paying the utility bills and reviewing transaction history, the 24*7 nature of voice assistants and chatbots are being enjoyed by the Fintech consumers to a much greater extent compared to other domains. There are some sophisticated chatbots like Bank of America’s Erica, which sends users notification about their bill payment date, warns them of low balance, and offers extensive proactive financial guidance.
5. Complete Inclusion which makes Fintech solutions available to everyone on a mass scale
There are two elements which together play a role in making Fintech available to all:
- Greater audience coverage – even after the onset of several banks being made operational across the world, the number of unbanked people are in millions. And just like people, there are many small and medium enterprises which are underbanked and unbanked, meaning they don’t have enough access to the online banking processes. The adoption of Fintech solutions make it easier for the unbanked SMEs to conduct their financial business.
- Omni-channel benefits – in addition to mass inclusion, the Fintech solutions also care a lot about reach. By making the solution accessible from email, messages, social media, and even home assistants, Fintech solutions take the abilities of omni-channel to the next level and with them, the uses of Fintech.
For an entrepreneur, one of the important lessons from Fintech startups can be to offer a service that answers to a number of people and is accessible through multiple channels. These two events are more or less the solutions to take your business growth forward.
6. Fintech Solutions are the examples of Agile development methods done right
The domain is a constant recipient of integration of technologies in finance, new functionality expectations, and user demands. In this scenario, the only way to be truly a leader in the domain, it is important for the domain to be agile.
By being agile, the Fintech industry is able to update its offering in a very short turnaround time – something that always keeps it several steps ahead of banks.
In fact, the principles of Agile development methods have also taught the domain how important it is to solve customers’ concerns in real-time. A doing of this understanding has been the onset of multiple support options such as Slack, Telegram, 24/7 online chats, which prioritize client requirements.
7. Greater Transparency brought about to end the era of closed banking systems
Banks and other traditional financial institutions are known to hide data and not reveal financial information which the customers need to know.
Every Fintech software development company realizes this gap. This is why the majority of these solutions are made on open APIs, third-party connections, and modular structures. Also, almost all the Fintech apps are very open and transparent about their services – how they collect data, what they do with the data, their transaction charges, etc.
Upto this point, we have looked into the different learnings that entrepreneurs belonging to ANY industry can draw from Fintech business models.
But we know that everything you read till now is nothing but farce to you.
Trust me, we know. We have worked with more than 850 clients and the one common language that they understand is that of examples. And even better – Live Examples.
Here are Some Top Fintech companies that are offering their two cents to the business world
1. Funding Circle
The UK based Fintech unicorn is a classic name in the Fintech growth strategy. It is a peer-to-peer lending marketplace which brings investors and small businesses together. Their idea? To replace the traditional lending systems.
In addition to an amazing user interface, their modus operandi of making services transparent by detailing loan formalities and giving investors the option to talk to business owners is what separates them.
Moral: Founders of Funding Circle approached a real issue which a HUGE number of small businesses face. They approached it with a customer-first medium and offered a transparent way of getting loans straight from the investors.
The application with over 3 million users automatically invests the spare change left to users after their everyday purchase. Their idea? Simplifying investing and inculcating the habit in the users by passing them educational content. The finance knowledge that they were offering through the software, turned their customers into smart investors.
Moral: The application makes users grow and become more confident in their investment choices. By giving them the ladder to become more financially sound, they show that they care for not just their users’ subscriptions but also their well-being.
The American company allows its users to buy and sell cryptocurrencies. In 2017, having bagged $100 million in a Series D funding, the company became a Fintech unicorn and around the same time, they became one of the most downloaded applications on the App Store. Their idea? To launch a new finance model in the world. Since the product was based on Blockchain – a new kid on the block – the company knew that they would have to focus a lot on regulations and security compliances from the very beginning.
Moral: When you show your unwavering focus on regulatory compliances and security, you can gain customers’ trust which can ultimately make you one of the most famous crypto asset exchanges in the world.
The expansion of Fintech apps is a textbook of use cases. There are a number of things that the domain is doing right. The things that are answering why Fintechs are popular. There are also some things that they are yet to learn. Many challenges for Fintech startups are yet to bloom, but what is keeping them afloat and rising is the willingness to be agile and forward moving. Isn’t this what every industry and every entrepreneur needs?
The end result of this expansion of Fintech apps and whatever lessons from Fintech startups that other industries have gathered, has been of the sector being adopted by some of most high economy countries.
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