White Space for Fintech Startups

I have attended the Singapore fintech festival twice, a wonderfully planned, world's largest fintech festival. We had a small stall at the festival to showcase our startup. The stall was in the fintech corner, mixed up with so many other fintech startups from different parts of the world. Considering the chance of getting lost in the crowd, we found ourselves a crowd-maker.

Among so many visitors, I can remember a group of young bankers. The type of their query was just as young as their profession. After gathering knowledge about our Products and Services, Market Segment, Target market, etc. one of them asked me, "Why can't we just open a Bank Account for them and solve all the problems? ".

The answer to that very simple question demands a lot of explanation.
Our company is a fintech startup tailored to financial services for Migrant workers in Malaysia and Singapore. It's not always a pure financial product that we offer, rather it engages people financially. For instance, we sell a Bus Ticket which is not a financial product but it involves customers visiting the bank, and depositing money. , in other words, you might define it as Financial Inclusion, through which you are giving Access to Finance.

However, the question is, why do we need fintech startups, where is white space?
To reach people in remote areas Banks need infrastructure, investment, and manpower and in return they need profit. As we are talking about the migrant market, it's truly tough to get the expected business volume and profit out of it. The volume of each transacted amount would be so small that, the cost of processing the transaction might surplus it. The maintenance cost of the Bank for Migrants account might surplus the total transaction volume of that account in a fiscal year. Moreover, Banks are the mainstream of financial services, though they offer some utility services, they are not designed for less educated, low-earning migrant workers.

In addition to that, there is a prime issue of legal documentation for staying and working as a migrant. An undisclosable and unpredictable number of illegal immigrants are working in different countries across SEA who will not be able to provide minimum documentation for KYC. A considerable number of people remained out of financial access and if summed up, a significant amount of money lay unbanked. It's possible to address this pool of unbanked people if the operational expenses and bureaucratic documentation process of financial organizations can be kept minimum.

That is the very white space we are talking about. This is where the economy needs fintech startups. Fintech startups any startup generally works with small team full of hardworking and experienced people, they try innovative and less expensive ways to get things done. They try new and to some extent impossible methods to get a result, if any method turns out to give positive results and occurring less costs than usual, it becomes their SOP. Workflows are not confined to departments and alter process manuals frequently to cope with the wind of change. Focuses on the main section, subsection even appendix of any constitution to keep harmony with regulatory bodies. Fixed assets are very low, and human resources and operational expenses are utilized brilliantly to keep the business commercially viable.

Technology has played a big role all along. The primary objective remains to increase people's engagement. This people engagement period is one of the crucial periods because most of the time it determines the survivability of the company. Irrespective of amount and volume, fintechs keep on engaging people and keep on giving financial access at a very minimum level. And at a certain point in time, it shows its beauty, you will be in a dilemma whether to ignore its total volume, its reach, or its social impact in financial inclusion.

It's somewhat impossible to run fintechs without mainstream financial institutions. Fintechs are not competitors nor substitutes of them rather an extended wing that completes the ecosystem. Worldwide 2 billion adult unbanked people are the gap to reaching sustainable economic development, the very white space, Fintech minds the Gap and hopes they will fill the Gap with their innovative capability.