How do you scale up your new FinTech?

The priority for most new Fintech’s at the outset of your journey will be to get a MVP. This may be to attract investment, get to market and therefore onboarding clients and generating revenues as quickly as possible.

Many start out with a clear idea of what you are going to be bringing to the market and how you will be improving the lives of your customers.

It is probable during this stage that not too much thought is spent on what the possible future requirements beyond your initial product may be.

This would clearly be difficult at this initial stage as many Fintech’s will adapt, or even pivot with their offerings, once they have significant engagement with their clients, both new and prospective.

But it is important not to become trapped within a system, whether this is a platform you built or bought, that prevents you from building out your product range, type of customer, market sector or the geographical regions you may operate in.

So, how do you plan to ensure your business can grow without having to revisit the platform you invested so much in at the outset?

Planning and flexibility are the keys in order to be able to incorporate new products and services when you don’t know what they will be, what the UX will look like and what supporting services you will need to integrate with.

In addition to new products, the following needs to be taken into consideration,

  • The ever-changing regulatory requirements to adhere to in your home market.
  • As you move into new jurisdictions with new regulators and currencies there will be new requirements to deal with.
  • Will the reporting function create all the reports needed to manage the business internally and provide the information needed by the regulators?
  • Can you manage the compliance requirements for onboarding clients to multiple account types and levels and multiple KYC/AML requirements?
  • Does the system integrate into multiple Third-Party Service Providers and decide which is best for any given transaction?
  • How will the IT infrastructure be able to manage the increasing security risks as the business grows both in size and geographical coverage? Security breaches can have severe financial and reputational impacts.

What options do you have when considering the build of your new FinTech platform?

You could start your FinTech with an in-house team, proven to be the most expensive and time-consuming option.

  • You will need to recruit (find, interview and vet) and possibly train your new team.
  • This team will need to have the knowledge and experience of not just developing a front-end App but building a secure back end platform that will manage and protect the business on an ongoing basis. Two very different skill sets.
  • The requirements for your team may evolve over time once the initial design and build process morphs into a manage function.
  • In time these IT staff may not be fully employed, so will become an expensive resource to maintain.

Outsource the development and management of your platform.

  • This option enables you to concentrate on the design and build of your new system, your unique UX.
  • It gives you access to the talent you need both for the initial design stage but also the flexibility to change the composition of the team as your requirements evolve.
  • You will need to ensure any time and cultural differences do not become issues as you manage the communication with the outsource team.

Purchase an existing and proven platform on which you can then develop your front end App.

  • This will give you the security of knowing you have a back end platform that is currently in use with a number of regulated entities.
  • It will enable you to concentrate on what you do best, your unique customer UX
  • Your product can be brought to market in the shortest time and at least cost.
  • Further development and enhancement can be carried out by an experienced team as and when the business requires without having to maintain an in-house team.

Whichever approach you take it is important that the methodology for designing your new Fintech product takes into account the short, medium and long term requirements for the business.

This should include as a minimum,

Research, covering

  • Regulatory requirements for your prospective service and necessary staffing levels
  • Target customers and their requirements, how will they engage and what it will take for them to use your service
  • Price points
  • How you are going to market your service

Technical infrastructure

  • What programming languages, databases, server infrastructure, data centre, will you use.
  • How will you address security, including data protection, user access, multi-factor authentication.

Define the product

  • What is the minimum you want to go to market with.
  • What additional products will be added in time
  • What Third Party Service providers will you need to integrate with, both for essential services like client onboarding, KYC/AML, Banking, FX and value added services.

Design the interfaces

  • How will your customers engage
  • Will you need web and mobile interfaces
  • What interfaces will staff need to manage the business and when interacting with customers

What will come next

  • How will the business expand and scale
  • New products
  • New geographical regions
  • What further integrations will be required and will the system need to intelligently select the best vendor depending on a set of rules

Scoping out the tasks, taking into account immediate and future requirements, will ensure you are fully aware of what funds you will need to get your product to market. You really don’t want to run out of funds before completion.

But, getting the above right is critical to not just getting your product to market but ensuring you haven’t built a cul-de-sac with your platform that won’t allow you to expand when the business is ready.

Employing the services of an experienced Consultant at the outset, when funds are short, may feel to be an unnecessary expense but could save both time and money in the long run whilst also ensuring there is no interruption to business down the line.

They will ensure that all factors have been taken into consideration in line with the business plan but should also be able to help bring together the full set of Third Party Service providers to ensure you have a comprehensive eco-system.

Most importantly an experienced consultant will ensure you set out with a platform that is capable of expanding according to your ambitions but also be flexible enough to handle any changes in direction that may come along.

In order to give yourself the best chance of getting your business to where you want it to be, you need to ensure you start from the right place.

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