Did you know that the fintech industry is worth over $310 billion in the United States alone? Fintech is, without a doubt, a lucrative industry and an excellent sector to invest your resources. In other words, if you’d like to build a profitable business, the fintech industry is a superb choice.
However, starting any business, let alone one that requires financial and technological knowledge, is challenging. Fortunately, this Idea Maker guide is here to help you get started. So, keep reading to learn how you can successfully enter the fintech market.
What Is Fintech?
Fintech, short for financial technology, is an industry concerned with technological solutions to financial needs and problems. For example, fintech companies may aim to provide banks with financial management and tracking software for consumers like mobile banking apps.
Types of Fintech Companies
Fintech software has many applications and niches. Here are just a few:
Investment software are applications that enable users to invest in private stocks and business conveniently and without the need for a stockbroker. Investment apps often let users invest for as little as $1, removing the barrier to entry that typically prevents people from getting involved with investments. Additionally, these apps also offer an all-in-one place for investors to view their portfolio.
Banking apps allow bank account holders to manage their accounts without having to go into their local branches. They include features such as transaction monitoring, online bank transfers, and fraud help. Banking apps offer users a secure way to manage their accounts from the comfort of their homes.
Though the crypto industry is not as valuable as it once was, seeing a contraction from $3 trillion to $906 billion in 2022, it is still an integral part of fintech. Cryptocurrency allows investors to send and receive digital and encrypted money on a peer-to-peer network. Cryptocurrency also requires a “wallet” that enables users to manage their crypto finances.
Related Page: Cryptocurrency Development Services
How to Start a Fintech Company
So, now that you know the massive potential of fintech software, let’s explore how you can start a fintech company of your own.
1. Determine Niche
As with any business, you should start by determining your fintech company’s niche. You might take examples from the above use cases and focus on investment, banking, or crypto; otherwise, you can explore the market further and aim to solve a unique problem.
Your niche will later help determine your business’s branding, business model, and software requirements. As a result, you must choose your niche carefully and seriously consider your options. Ask yourself: will people need my services? And what problem will my business solve?
2. Determine Business Model
Next, you need to determine how your fintech company is going to make money. There are several ways you can generate revenue as a fintech business; however, the following business models are dependent on what type of software and niche you choose.
The subscription model, sometimes referred to as the “SaaS model,” is where you charge users a monthly or annual fee to use your platform. Generally, multiple subscription levels with different prices and features are available. For example, you may offer a free tier with basic software functionality and an advanced tier at $29 per month with enterprise-level functionality.
Commission On Earnings
If you decide to create a service that allows users to make money – an investment app, for example – you could charge users a commission on their earnings. This form of monetization is appealing to users, as there are no upfront costs on their side. In other words, they only pay if they make money.
Money Transfer Fee
If your fintech service allows users to transfer money between one another, you could opt to charge a small transfer fee applied when money is sent or received. This, however, can be a frustrating fee for users to have to pay. Nevertheless, it remains a viable method of monetization.
3. Hire Software Development Agency
Once you’ve determined your niche and business model, the next step is to build the software that you plan to sell. Fintech applications require advanced technology and tight security. So, unless you have expert knowledge of software development, it’s best left to a professional development agency.
Here are some things to look out for when hiring a development company:
Portfolio and Expertise
First, you should examine the software development company’s portfolio to determine the level of their expertise and the quality of deliverables. If their previous work doesn’t fit your niche, appears low quality, or is stylistically different from your preferences, then they might not be the right company for you.
Related Page: Portfolio of Orange County Development Company
Clearly Defined Development Procedure
You should also identify if the development agency has a clearly defined development procedure listed on its website. The procedure should outline what steps the company takes to build your software and where your input is required. If the agency does not have a process listed and is unable to produce one upon request, this is a clear sign of inexperience.
Related Page: Our Development Process
Finally, you must ensure that the development agency offers post-release support. No matter how well-built software is, bugs will inevitably arise – having post-release support means these errors can be swiftly remedied. Check out the developer’s previous projects to see how they function a while after completion.
4. Go Live
Once your fintech software has been developed and your business model implemented, you can then go live to the public. At this stage, you’ll want to ensure all appropriate security and insurance measures are taken, making sure that both you and your future customers are legally and financially secure.
As customers start to use your software, you’ll need to carefully monitor for bugs, errors, and security flaws, then work with your developer to reach a resolution. You should also take note of user feedback and make modifications accordingly.
5. Marketing Your Company
To ensure your fintech company is a success, you’re going to need to market your business. There are several ways to do this effectively, Pay-Per-Click advertising and social media promotion. .
Pay-Per-Click advertising is the practice of placing ads on websites and social media for a small fee each time someone clicks on your ad. PPC ads are an excellent way to generate traffic to your website but often fail to return a high customer conversion rate.
Social Media Marketing
Social media marketing can also effectively generate an audience for your company through organic or paid promotion. Fintech applications work especially well on LinkedIn – a social media platform that’s aimed at business professionals and entrepreneurs.
Fintech Software Development From Idea Maker
Looking for a dedicated US-based software development agency to build your business’s fintech application? Look no further than Idea Maker. We have a team of expert software developers and designers ready to build an application that fits your requirements and exceeds your expectations. Schedule a free consultation with us today.