Now that you’ve successfully acquired Series A funding for your FinTech startup, it’s time to scale up your business and work towards the goal of international expansion.
But to do this successfully, you’ll need to be aware of the myriad challenges that come with the growth cycle of FinTech firms like yours.
These include maintaining financial stability, attracting capable leadership with the skills to guide your FinTech firm through the scale-up phase, and ensuring compliance with taxation and regulatory requirements.
You must also keep track of the factors that most influence the success of businesses in your industry. For the FinTech sector in particular, the key is to plan to scale your business on both a national and international level.
As such, we’ve collated a list of key conditions that FinTech firms like yours must meet to achieve a successful scale-up, so that you can anticipate and plan for them.
We’ve also included some approaches you can take towards ticking off these key conditions, and how optimising your business processes – such as through the implementation of an ERP software – can help you in this regard.
We hope this will serve you as a resource that’ll help you transition your FinTech firm from a start-up to a business that’s scaling-up towards unicorn status.
Having an innovative new FinTech product or service is all well and good, and might have been what convinced your investors to fund your business in the first place.
But now that you’ve secured your funding, your first order of business must be to develop a core target market that you want to sell your product or service to.
And it’s important that you choose your core target market carefully; trying to make your product or service be all things to all people is an unrealistic prospect.
Therefore, you have to determine the kind of people you’re planning to market to, and what sort of challenges or pain points they may be experiencing.
Once you’ve identified them, you need to figure out how to leverage the latest technologies into your FinTech product or service so it can address these challenges or pain points more effectively.
However, you might be the type of FinTech entrepreneur more driven by identifying an existing need that can be addressed by a potential product or service, rather than the technology needed to enable it.
In this case, you can always partner with developers who possess a better grasp on the latest technology available.
These developers will know best how to design your product or service to leverage the right kind of technology that’ll best fit as the solution to your customers’ pain points.
Overview of NetSuite Dashboard For Data Insights: Source: Oracle NetSuite
FinTech firms like yours face the same challenge as any business looking to transition from the start-up to the scale-up phase; that is, building up your customer base from scratch.
And the FinTech sector in particular lives or dies by whether a product or service can offer a slick, personalised, and responsive user experience. It's a key differentiator for businesses like yours in this sector against traditional financial institutions such as banks.
This means you’ll need to constantly collect feedback on your product or service from your customers. You can then use this data to generate actionable insights that you need to continually improve on your offering.
With that in mind, we recommend that you focus on retaining your existing customer base, as opposed to trying to acquire new customers. That’s because your FinTech firm operates in a sector where the latter could cost up to 20 times as much as the former.
You'd probably want to prioritise improving the user experience of your FinTech product or service, as it’s the most effective way to retain your existing customer base.
Some of the ways you can improve your FinTech product or service for your existing customers include:
All these will entice your existing customers to keep using your product or service, and continue to generate the feedback and insights you need to continue improving on your offering.
Artificial intelligence (AI) technology has come a long way since its early days, and can be leveraged to enable all sorts of advantages for savvy startups, especially in the FinTech sector.
These include applications such as natural language processing (NLP) chatbots that streamline customer interaction, to big data algorithms that greatly optimise your data analysis.
You can be sure that your competitors in the FinTech sector will be planning to incorporate AI technology towards optimising their products and services, as well as their business processes.
Thus, you too must also keep up-to-date with the latest emerging AI-related trends in the FinTech sector, and figure out how you can make it work for your business.
Some AI use cases for FinTech firms like yours include bolstering fraud prevention, enhancing the delivery of customer experiences, and providing avenues of improvement for your own product and/or services.
You can even optimise your internal business processes with AI through third-party integrations with your in-house systems. This can help you automate small tasks, manage your data, plan your marketing campaigns, and all sorts of other tangible benefits.
And since you’ve designed your product or service to make the lives of your customers easier, why not do the exact same thing for your own FinTech firm?
Because the FinTech sector is a relatively new emergence in the financial services market, the regulatory requirements for FinTech firms like yours are not set in stone.
However, that doesn’t mean your business gets to operate in a regulatory vacuum.
Just like with traditional financial institutions, your FinTech firm will have to play by some of the most important regulations. These include anti-money laundering (AML) and know-your-customer (KYO).
That said, you may enjoy some leeway the established banks and financial institutions don’t. Depending on where your FinTech firm is located, you may have a much easier time complying with the local regulations.
This is especially the case because several Asia-Pacific countries – Singapore included – has adopted sandbox regulations specifically for the FinTech sector.
In other words, if your FinTech firm is operating in a country with such regulations, you’ll be able to test how your product or service would perform in that market without worrying about existing regulations for established financial institutions.
Therefore, choosing where your FinTech firm does business (if it hasn’t been set in stone already) will greatly influence the regulatory burden your business will have to bear.
Either way, it’s important that you have a clear vision and business model to determine what regulatory responsibilities your FinTech firm will have to bear during the scaling-up process.
Talent is a key asset for every FinTech firm. Attracting new talent, and retaining your existing talent, is therefore key to the success of your business.
However, as the FinTech sector continues to boom, both of these will become a growing challenge as the competition for talent heats up.
This is especially the case for when you’re looking to add to your leadership team with a view to scaling up your FinTech firm.
You’ll need people with distinctive sets of functional skills which cannot be easily copies or developed easily, to maintain an advantage over your competition during the scaling-up process.
They must also have the people skills to manage, empower and inspire your employees.
Such leaders may not have the vision or creativity of your existing leadership team that helped you get your FinTech start-up off the ground, but you’ll need them to provide the years of management expertise necessary during the scale-up.
Therefore, you’ll need to provide a competitive offer in order to attract and retain the best talent in a cutthroat market. Salaries and financial rewards remain big factors in doing both, but they’re not enough by themselves.
You should also develop a range of initiatives and benefits that would appeal to the new talent you’re trying to attract, as well as keep your existing talent satisfied with their working experience at your FinTech firm.
Challenges of International Expansion; Source: AFON & Oracle NetSuite Joint Webinar on Building Digital Foundations For International Expansion
More than most other industries, businesses in the FinTech sector will eventually have to consider expanding their operations overseas in order to continue their growth trajectory.
With a product or service that can be implemented in any location around the world, you’ll only limit the growth of your FinTech firm if you constrain your operations to one market – especially one as small as Singapore’s.
However, expanding to markets overseas comes with the usual set of challenges for any startup, not just FinTech firms. Financial regulations, taxation, and laws vary from country to country, making compliance with the regulatory requirements of each new market a daunting prospect for your business.
Many FinTech firms like yours tend to struggle at this stage, because they do not have the infrastructure ready to handle transactions in multiple currencies, and maintain compliance with multiple sets of regulations.
It’s also very easy to underestimate the difficulty of overcoming language barriers and cultural differences when you’re rolling out your FinTech product or service in a new market.
To resolve this, you need a tool or solution that comes with multi-currency and multi-language support to help you overcome these challenges.
It should also offer automatic elimination of intercompany transactions, to help you manage the multiple branch locations more effectively and support the international expansion of your FinTech firm.
All of these features can be found in a true cloud ERP software solution designed to support international operations, such as Oracle NetSuite OneWorld.
FinTech firms, especially those that are transitioning from startup status to a scale-up phase like yours, are a particularly attractive target for cybersecurity threats such as hackers and ransomware.
It’s no surprise; FinTech firms like yours work with technology and handle sensitive customer information on a day-to-day basis, and so it makes sense that they present one of the most tempting targets for malicious actors.
That’s an issue, because the trust of your customers is a key asset for any FinTech firm, especially one transitioning to a scale-up phase like yorus.
And because both your customers and the regulators know this, your FinTech firm will have to ensure compliance with any data protection regulations which apply to it.
The most well-known of these is the General Data Protection Regulation (GDPR) that applies to all businesses with operations within the European Union (EU).
In Singapore, your business would have to adhere to a similar set of regulations, the Personal Data Protection Act (PDPA).
Thus, you must have measures in place to safeguard your customers’ data, in order to provide them with peace of mind and meet regulatory requirements.
Some of the most effective technology for ensuring data privacy in your FinTech firm are tokenisation, and two-factor authentication (2FA). Therefore, it’s advisable to incorporate them not only in your FinTech product or service, but also to your back-end operations.
Fortunately, data security need not be merely a sunk cost. Having robust security features could be marketed as a selling point for your product or service, since they boost consumer confidence in your offering and attracts more customers and partners to your platform.
In that sense, putting data security measures in place can be considered an investment into your FinTech product or service, and not just an unavoidable expense.
As the proprietor of a FinTech firm, you’re familiar with offering a product or service that makes the lives of your customers easier.
Because of that, you can certainly appreciate a solution that makes managing your business much easier than it otherwise would be.
You certainly don’t want a software solution that you’ll have to replace in a few years, forcing you to migrate databases and retrain your employees repeatedly.
Instead, what you need is something that can easily scale in line with the scaling-up of your FinTech firm. And that’s exactly what Oracle NetSuite brings to the table.
Thanks to its true cloud architecture, NetSuite can easily be scaled in line with your FinTech firm’s own scaling-up phase, and fully support your growing operations throughout the entire journey to unicorn status.
The true cloud ERP software will streamline your FinTech firm’s business processes, and provide the real-time reporting capabilities you need to acquire full visibility into them.
It also boasts strict security standards, which will help you maintain compliance with the financial and data protection regulations applicable to your business.
And with the OneWorld add-on, NetSuite brings the multi-language and multi-currency support you need to take your FinTech firm across national borders to overseas markets, your best bet at truly scaling your business to its full potential.
To find out more about how Oracle NetSuite can bring digital transformation to your FinTech firm, click on the image below and find out what the true cloud ERP software can do for you.
Once you’ve secured your Series A funding, your FinTech startup will have taken its first step in a long and complex scale-up journey.
And to achieve your goal of making your business profitable, and maybe even a unicorn in the long run, you need to ensure that it’s able to meet the key conditions that must be achieved beforehand.
These include leveraging insights to attract and retain your customers, staying up-to-date with AI trends in the FinTech sector, maintaining compliance with financial and data protection regulations, and eventually planning to expand your operations internationally.
And the right ERP software can provide the full visibility into your FinTech firm, along with the critical features and functionalities, that you’d need to achieve all of the above.
But how do you find the right solution fit for your FinTech firm? You’d need a reputable partner that truly understands your business needs, and at AFON, we pride ourselves on doing exactly that for businesses like yours.
As a qualified Oracle NetSuite partner in Singapore, we are equipped to implement the true cloud ERP software, and customise it to support the scale-up journey your FinTech firm is about to embark upon.
If you’d like to know how we can help your FinTech firm achieve the key conditions in its scale-up journey with the right solution, do schedule a free consultation with us today!