While, in reality, there are plenty of reasons why a company can fail, research shows there are some rather common mistakes that can occur that end up causing the lack of growth. With this in mind, today we’re going to explore the top five mistakes modern fintech companies are making.
1. Not Understanding the Attitude of Money
Like all businesses, a fintech company is based around the concept of money, whether that’s offering a loan, savings solution, or making payments. However, groups of society will all treat and view money in different ways, and not understanding these behaviors of the target audience can lead to failure.
The psychology towards money differs immensely between generations, income types, and individuals, so fintech companies need to make sure they’re carrying out proper research of their target market to ensure they get their product right.
2. Assuming Adoption Techniques
Hand in hand with the point above, just because fintech is taking off and is one of the most rapidly growing businesses and industries in the world, that doesn’t mean that any company or product is going to make it big. Companies need to be proactive in how they are getting their customers to adopt their products.
Most people these days are comfortable with their financial routines and the methods they use, which is why new fintech companies need to go above and beyond the call of duty when it comes to how they get their customers to pick up the product.
3. A Disregard for the Law
No matter what country you’re operating in, fintech companies need to make sure they’re following the law and the legal requirements surrounding the industry. Financial laws govern the world, whether that’s covering money laundering, anti-terrorism funding, or any payment directives, and this is only scratching the surface.
Fail to follow all the laws or lack an understanding of what they are and how they work, and a fintech company can quickly find itself in trouble and will end up fined or shut down.
4. Not Managing Budgets Properly
One of the more common mistakes that new fintech companies make, as well as new companies in any industry, is not managing their budgets properly, and thus investing their money in the wrong places.
For example, just because a fintech company is a new, state-of-the-art business, that doesn’t mean that they need to have the latest, most expensive software on their computers or all the latest gadgets in their office.
“During the early stages of a company, many business owners will focus on trying to get the best equipment and assets they can to help them build their company, rather than just focusing on what they can do to create the best product possible.”
5. Not Listening to Customers
Focusing on what customers want and how they react to the fintech products a business is offering is essential to their development. Still, there are plenty of companies out there unwilling to take the leap. Sometimes, a company needs to pivot and readjust where they stand, but failure to do this could leave a fintech company out of action.
This can happen in lots of different ways, whether it’s simply not taking the steps and making the decisions to make the changes that need to happen take place, or not getting enough feedback in the first place to understand where their product actually stands,’ ultimately rendering the product useless in the eyes of the customers.
Every company in existence has gone through the startup process, and as you can see, it’s all about finding the right balance between innovating a product and making sure it’s something customers want and will use.
Of course, there is a lot of planning and research that needs to take place, and some big decisions that need to be made, but with courage and the ability to move, you may be able to find yourself in the top 10% that make it.
Ellie Coverdale is a finance writer with Ukwritings.com. Among other skills and interests, Ellie enjoys sharing her financial expertise to help businesses and individuals make the most of what the world has to offer.