4 Pitfalls to Avoid When Building a Fintech Startup
Fintech startups fill gaps and improve service in the financial system. They bank the unbanked, make investing more accessible, build new tools that bringconvenience to entrepreneurs, and more. But however deeply fintech founders understand their solutions, they still need to execute their vision within the context of a large, complex industry. To succeed in the disruptive world of fintech, you need to understand the highly regulated world of traditional banks.
Fintechs benefit from the security that chartered banks can offer through FDIC insured accounts. To access that benefit and others, they need to meet the expectations of potential bank partners. Banks value fintechs’ ability to connect with emerging and distinct consumer and business segments, and they expect fintech relationships to be profitable. But they have to weigh that potential gainagainst the risk of taking on a new fintech client. Part of what makes banks so secure is that they comply with strict rules and regulations.
So to build a successful fintech company, you need not just the right skills and ideas, but the right mindset. Making the wrong assumptions early on will hauntyou later. Here are four pitfalls to avoid: