Sunday 7 June 2020
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How To Make The Most Of Financial Technology (FinTech) Investments

How To Make The Most Of Financial Technology (FinTech) Investments

If your company is investing in FinTech and looking to disrupt the financial services industry, you may be wondering how you can make the most out of your FinTech investments. In this article, we’ll discuss the basics of FinTech (Financial Technology) and help you understand some best practices you can use to make the most of your investment in advanced financial technology. Let’s get started now.


What Is FinTech?

FinTech is more than just a buzzword. It’s short for “Financial Technology.” However, it doesn’t just refer to all of the different types of technology used in the financial and banking industries – rather, it refers to a movement focusing on disruptive innovation of the financial services industry.


FinTech startups usually focus on using advanced technology to deliver a powerful customer experience, or innovate on a concept that traditional banking firms – with their legacy systems and old-fashioned approach to financial services – simply cannot implement on their own.


From stock trading platforms to mobile banks, online mortgage lenders, peer-to-peer lending platforms and more, there are dozens of FinTech startups out there which are looking to disrupt the traditional banking and financial industries.


Because of this, many large financial companies are investing in FinTech companies, purchasing them outright, or launching their own FinTech initiatives. Quicken Loans, for example, launched the app-based Rocket Mortgage in 2016, due to competition from smaller FinTech companies.


Understanding How To Make The Most Of FinTech Investments

 To make the most out of a FinTech investment, there are a few guidelines you should follow. Here are a few of the key concepts and best practices that have allowed FinTech companies to outperform traditional companies in the financial industry. Yes, some of these tips may seem like they should always be considered, but you would be surprised by how many software applications do not take these basic tenants into account.

  • Focus on users – A great user experience is something that most banks and financial companies don’t focus on. By developing a more user-friendly app or platform, you can disrupt traditional software in your industry, and gain a larger user share.


  • Be disruptive – It’s best to choose a segment of the financial industry that has not been modernized, and could benefit from disruption using today’s powerful computing technology. Robinhood, for example, disrupted the industry of stock trading – offering completely 100% commission-free trading of stocks, bonds and other financial instruments.


  • Focus on speed and business agility – This is one of the biggest advantages that small FinTech startups have. Despite the large size and monetary resources of big banks and financial institutions, they often lack business agility and speed – making it harder for them to innovate and release new products quickly.


  • Keep existing regulations, limitations in mind – FinTech startups cannot afford to simply ignore existing financial regulations and limitations. Doing so may result in steep fines – which they may not be able to afford to pay. Innovation and rapid product releases are important, but all relevant financial regulations and limitations must also be followed to prevent severe penalties from financial regulators.


 Make More Of Your FinTech Investments

Whether you’re investing in a FinTech company, or you’re working with a FinTech company to develop a new platform, application or service, these tips are sure to help you and your partners get the most out of your FinTech investment.

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