Top FIVE Mistakes Eradicating Start-up Fintechs.
Keeping in mind that approximately 90% of start-up businesses fail there’s no denying that there has been a massive accumulation of information to help businesses that are struggling to find their footing. While this instability is shaking the ground through all the industries, it is even more prevalent in the fintech industry.
While there are thousands of reasons why exactly an individual business can fail, researchers have managed to narrow the list to pick out the top five reasons why modern fintech companies are going under.
1. Not understanding the target market and their views towards money.
Just like all businesses, for a fintech business to be successful it must find a niche in the market to satisfy. Many Fintech companies find it hard to reach their potential in the niche they are aiming to fill as they do not understand the behaviours of their target audience which in turn leads to failure.
Different people's outlooks and psychologies towards money will vastly differ between generations, types of income, the permanence of jobs and other factors. So for a fintech business, it is vital to carry out the right research of the target market to ensure they’re getting their product right.
2. Adopting the trend.
Some businesses tend to make the mistake of jumping on the bandwagon when they see a flourishing industry and try to sell products that may not be fully developed or polished only to try to make it big in the industry.
Companies in the Fintech industry have to go above and beyond with their products to not fall into the trap of overpromising to clients and not being able to deliver.
3. Legal Troubles.
Fintech, although many may not think because of its difficulty to trace in comparison with a physical business, has many pitfalls that new entrepreneurs must be aware of to ensure that they operate within the limits of the law. Whether that’s covering anti-money laundering or anti-terrorism funding of the GDPR. Even with those notable mentions, we’re barely scratching the legal surface.
4. Budget Mishaps.
When attempting to enter a new industry with your own new company, it is easy to make inexperienced decisions on where to invest your budget. This in turn leads to money being invested in the wrong places.
For example, just because a company is offering the latest in AI technology for their fintech products, does not necessarily mean that everyone in the company should be getting iPads. Yet unfortunately, this is a scenario we’re seeing more and more.
5. Not listening to Customers.
Inarguably, when selling a product, the customer is always the most important person. Therefore listening to their opinions on your products are of invaluable benefit. Unfortunately not every company gets the idea before its clients start turning away.