Starting a Fintech Startup: 5 Key Tips Founders Should Prioritise

Entering the final quarter of 2024, the fintech industry is showing signs of improvement compared to the funding decline of 2023. However, despite some recovery, the global fintech ecosystem is still far from its peak. Investment levels and deal volumes are still lower than in previous years. Notably, regions such as the UK and parts of the US have fared slightly better due to increased funding, but overall the industry continues to face significant challenges.

Despite all this, the number of fintech startups continues to grow, especially in the US and EMEA regions. This growth has led to market saturation, and for any new fintech startup to succeed, it must offer something truly unique. Investors are becoming increasingly selective, focusing on profitability and scalability. This makes it critical for founders to take a strategic approach when launching their businesses.

So, what should founders focus on when building a successful fintech startup in today's world?

5 Key Tips for Fintech Founders

As an experienced founder who has launched several fintech companies, I believe there are critical factors to consider for success in this evolving market.

1. Identify Real and Relevant Problems

Focus on building a product that solves a real problem, rather than developing a fictitious solution. Founders must ensure that the problem they are solving has market relevance and that their solution is in line with current trends. It is important to understand your customers’ pain points, resist the urge to develop a product just for the sake of riding the fintech wave. It can be done through communication with your clients, surveys, or market analysis. 

Conducting market research, for example, will not only confirm the demand for the product, but also ensure that the solution is unique. Founders must constantly evaluate changes in the market and adjust their strategies accordingly to stay ahead. Try to find the gap that you can fill. 

2. Assess Niche Potential

Instead of considering wide options, shift attention to the narrowness of your niche. However, it does not finish here. Founders must carefully evaluate whether their chosen niche has sufficient demand and revenue potential to support growth. Scalability is another key — while specialization is important, your solution must have the potential to expand beyond the initial market to ensure long-term success. 

So, basically, start with a niche and then expand further. 

3. Prioritize UX

Users are already used to intuitive and aesthetically pleasing designs, they will definitely be turned away by a complicated and incomprehensible interface. It is important to incorporate UX considerations from the very beginning of product development. Make sure users will not need to spend their time understanding what button to press, and provide them with immediate access to all essential information from the app. A responsive support team, complemented by an integrated chatbot, will also significantly benefit user experience.

4. Accurately Estimate Costs

Development and infrastructure costs are, in my experience, often underestimated. Be prepared for hidden costs and budget accordingly. If you fail to accurately estimate these expenses, it can lead to cash flow issues, project delays, and failure to meet operational needs. This can jeopardize the viability of a startup, hinder growth, and ultimately lead to business failure. You do not want to go bankrupt. 

5. Regulatory Compliance

From GDPR to AML requirements, fintech companies need to ensure compliance with relevant regulations from the start. And, of course, founders should stay up to date with regulatory changes that could impact their business model. Otherwise, ignoring regulatory risks can lead to fines, potential litigation, or even the shutdown of a business.

To sum up

Yes, launching a fintech startup in 2024 is not an easy task, but when was starting a business easy, right? However, by considering all the necessary steps, the process will definitely be smoother. My experience shows that building a successful fintech company requires not only vision, but the ability to adapt to the rapidly changing market. For those who are prepared, the fintech sector can offer significant opportunities for innovation and growth.