5 things to not do if you are a fin-tech startup!

By Mohit Gang*

There are start-ups and then there are fin-tech start-ups. It will not be an exaggeration to say that fin-tech is perhaps one of the most challenging verticals to be in. The sheer market size and opportunity base always makes it a lucrative option from the macro perspective, however, it is vastly complex and individualistic at a micro level.


A fin-tech startup is like a herbivore in a sea full of sharks and crocodiles ready to pounce at you and gulp you at your first mistake. Sheer size of the market makes it so lucrative that multiple players jump into the fray making it extremely competitive. To survive and flourish being a fin-tech startup requires more than just the domain expertise or the technical acumen. Here are my quick bytes on what surely can be avoided being in this domain:

1) Ignoring the regulations

Financial world is a maze of complex regulations and every move is closely governed and monitored by regulators of the land. On the other hand, startup world is inhabited by young mavericks who are eager to make a mark in a soaring marketplace with little or no exposure to the prevailing regulations in the sector. I have seen a plethora of start-ups who in their zeal to make a simplified platform, end up ignoring the basic laws of the land. And this is one space, where ignorance is not bliss!

It is of paramount importance to understand the regulatory framework in which one is operating and make sure all sides are well fortified. One blip on the regulatory front can crush years of effort. Take that first step after carefully studying the regulatory aspects of your business and it’s never wrong to hire a competent compliance or legal person to handle the complexities.

2) Being first-mover is not an ever-lasting advantage!

Sheer market size and varied dynamics, makes it so lucrative that the moment an interesting idea comes across, multiple players will jump in the fray. Well, that’s true for most of the ventures, but not as brutal as for fin-tech start-ups. Reason is very simple – world of finance is owned and dominated by large financial banks or institutions with extremely deep pockets and global technological reach. Any new technological solution or innovation can be easily replicated in half the time and can be promoted at a much larger scale with an existing client-base. Hence, having ambition in this vertical will mean that one has researched enough if the idea is really sustainable and if it can withstand onslaught of big financial daddies. Being first, unlike other domains, is never a recipe of success. It’s a mere momentary time-advantage.

3) Ignoring the product-technology mix

Fin-tech is one area, where product dominates over technology. This might sound quite blasphemous to the purists but nature of the beast is such. Technology can be replicated and standardised, but understanding of the end-user can’t be. Most of the consumer businesses are transactional and the end-goal is making purchase of a product easy and convenient for a client. Technology can squarely solve this for you. For a financial service platform, capturing a client being a P2P lender, or a wallet or a robo-advisor requires much more than a sophisticated platform. There will be a time when everyone will offer 5 minute loan processing with brilliant client experience – but what will differentiate one from another is the client acquisition and product strategy.

Knowing where to find the right client and what will lure him to use your platform is the crux of this business. This requires someone who understands the psyche of end-buyer and knows the business inside-out. A must have for a fin-tech startup is to have experienced hands on the deck.

4) Security compromises

Last thing one can ill-afford in a fin-tech setup is having security lapses. Its people’s hard-earned money at stake and one security lapse can completely endanger the entire platform, reputation of the brand and years of hard-work. Financial websites need complex security mechanisms, data security systems, anti-hacking testing and sophisticated level of encryptions. One of the biggest follies for a Fintech startup could be to cut edges in spending on security.

5) Ignoring Brand Factor

The reason why Fintech is perhaps the toughest segment is because you battle with big banks to capture client trust and confidence. Trust is the paramount factor behind any financial transaction – it’s not product, platform or price! And building trust can sometimes take years. It’s a continuous investment in Brand and an unswerving commitment behind the company’s philosophy. This can be a costly and patient walk, but the ultimate winner in Fintech battle will be the one who persistently works on this credibility factor. Ignoring this can lead you to short term victories but will never win you the long-term war.

In a nutshell, Fintech battle will not be won by early-movers or convenience providers. It’s a far more complex code to crack and requires a comprehensive Brand-client-product-technology-trust mix to succeed in the longer run.

*Mohit Gang is the Co-Founder of, an investment portal that offers Direct Plans of Mutual Funds. Having worked with HSBC and Citibank, Mohit has over 12 years’ experience in the investment and banking industry.

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