How Are Fintech Startups Changing The Face Of Financial Services?

Since fintech startups strive to make financial services more practical, easy and accessible, it is possible for successful startups to make changes in financial ecosystems. Thanks to innovative fintech startups, the types and methods of financial services we are accustomed to are changing.

Fintech startups, inspired by technology, are radically changing every unit of financial services. For example, while the number of transactions managed by mobile applications among traditional banking methods was quite limited in the past, almost all banks have experienced a digital transformation with investments in fintech startups.

Fintech startups are innovative projects that often require resources and bring together technology and finance. Capital investors and banks need to create atmospheres that encourage these startups. Investments in startups that aim to make financial services more practical and affordable provide long-term returns for banks.

What Unique Services And Products Do Fintech Startups Offer?

Fintech startups offer various solutions by developing different projects for each of the banking transactions. Especially startups that can directly respond to the needs within the sector and find resources can turn into widely used products. Many financial factors, from payment transactions to credit evaluation processes, from digital banking solutions to investment models, can experience significant developments thanks to startups.

For example, while credit evaluation processes were long and costly with traditional banking methods in the past, credit evaluation processes can be done automatically thanks to artificial intelligence-supported automations developed by fintech startups. In the 90s, a customer who applied for a loan from a bank had to submit documents such as income statement and employment information to the bank and wait for his application to be evaluated.

Thanks to the automatic credit assessment tools offered by Fintech startups, customers’ data are automatically examined through artificial intelligence and creditworthiness reports are created. This provides financial institutions with significant efficiency in terms of both time and cost.

How Do Fintech Companies Approach Customer-Centric Financial Services?

One of the issues that fintech startups and companies should consider when developing financial products and services is to be customer-focused. Fintech startups must develop direct solutions to customers’ realistic financial needs.

Banks and financial institutions aim to provide equal levels of banking services to all their customers, with the principle of financial inclusion. This is undoubtedly possible by offering customized solutions for customers at all income levels. Providing customer-focused and customized services or solutions by banks is a costly and time-consuming process with traditional banking methods.

However, this process is easy and fast thanks to the artificial intelligence and automation tools offered by fintech companies. Every customer of a bank at different income levels can access the same banking service. Moreover, thanks to the automations offered by fintech startups, they can access customized solutions for their personal investment portfolios.

What Are The Main Challenges Faced By Fintech Startups In Scaling?

Fintech startups are initiatives that seek resources and offer innovative financial developments that need investments to grow. Especially in the early stages, fintech startups may face many difficulties.

The most common problems that fintech startups encounter during the growth phase include competitive market conditions, lack of resources and non-compliance with regulations. These problems are generally the difficulties faced by almost all fintech startups, large and small.

The high potential income of fintech startups, especially in terms of potential income, if they are successful, causes many startups to be developed in this field and competition to be high. Such high competition can cause difficulties for fintech startups at the beginning level.

Additionally, convincing investors for resources and investment and developing communications on P2P lending platforms can be challenging. However, I can still guarantee that good and productive ideas in the market will receive investment at the end of the day.

Can Traditional Banks Compete With The Agility Of Fintech Startups?

In recent years, almost all traditional banks have been developing incentive policies to support fintech startups. Even though the ecosystems offered by fintech startups will radically change the entire dynamics of traditional banking, they do not want to be left behind in this era of transformation.

It is possible for traditional banks to compete with the agility of fintech startups. However, they need to allocate resources and platforms to startups and other financial initiatives. The development of fintech startups will increase their potential profit margins by enabling the development of their products and services.

Even though traditional banks are experiencing a slower adaptation process in terms of innovation, they will not soon lose their power to compete with fintech startups with a more widespread use and preference rate. However, financial institutions that are unaware of the solutions and developments offered by fintech startups will gradually become unable to offer solutions to current needs and will become weaker in the competitive market.

What’s The Role Of Venture Capital In Fintech Startup Growth?

Venture capital is the most decisive factor in the growth of fintech startups, regardless of whether their ideas are good or not. Fintech startups are projects seeking funding and resources. It will grow by convincing investors with the financial services and products it will offer to financial ecosystems and gaining those who evaluate venture capital.

There are an endless number of fintech startup projects that could not be developed in the past because they could not access resources, funding or venture capital. The main reason why these projects are left unfinished or stopped is the inability to find resources. For this reason, I recommend that those who develop fintech startup projects communicate correctly with venture capital providers. 

You should also be presenting the goal and mission of your startup project effectively when explaining it to investors. Fintech startups seeking venture capital should be in appropriate networks and present their projects correctly. Global Fairs and competitions in the field of fintech technologies should be followed and new ways to reach venture capital distributors should be discovered.

See you in the next post,

Anil UZUN