{"id":248394,"date":"2022-09-28T08:29:28","date_gmt":"2022-09-28T08:29:28","guid":{"rendered":"https:\/\/imarticus.org\/?p=248394"},"modified":"2022-09-28T08:33:07","modified_gmt":"2022-09-28T08:33:07","slug":"is-fintech-failing-a-practical-opinion","status":"publish","type":"post","link":"https:\/\/imarticus.org\/blog\/is-fintech-failing-a-practical-opinion\/","title":{"rendered":"Is fintech failing? A practical opinion"},"content":{"rendered":"<h1><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Is fintech failing? A practical opinion&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:12730,&quot;4&quot;:{&quot;1&quot;:2,&quot;2&quot;:16777215},&quot;6&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;7&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;8&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Arial&quot;,&quot;16&quot;:11}\">Is fintech failing? A practical opinion<\/span><\/h1>\n<p>As the startup craze is booming, more and more startups are emerging with new age and sometimes disruptive technologies. Integration of technology in the financial industry is what Fintechs are doing. Fintech startups are not only limited to the banking and financial industry but also include insurance and stock broking startups. However, not all Fintech startups can survive and thrive.<\/p>\n<p data-node-text-align=\"justify\"><span data-text-color-mark=\"rgb(14, 16, 26)\">Therefore, it is essential to understand the entire ecosystem in which Fintechs operate. Whether you want to learn about banking, insurance, stock broking, or any other Fintech industry, you can obtain deep insights through a\u00a0<a href=\"https:\/\/imarticus.org\/Professional-Certificate-Course-FinTech\/\"><strong>Fintech Certification program<\/strong><\/a>. It allows you to mitigate risks associated with Fintechs and reduce the chances of failure. However, a pertinent question arises here \u2013 are Fintechs failing? Let\u2019s see!<\/span><\/p>\n<h2 data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">How can Fintech startups fail?<\/span><\/strong><\/h2>\n<p data-node-text-align=\"justify\"><span data-text-color-mark=\"rgb(14, 16, 26)\">The failure rate of startups is astonishing. Per the\u00a0<\/span>Wall Street Journal<span data-text-color-mark=\"rgb(14, 16, 26)\">, 3 out of 4 startups fail; that\u2019s a whopping 75% of the total startups. Therefore, it is essential to understand the risks faced by Fintech startups. It can include:<\/span><\/p>\n<ul>\n<li data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">Inadequate market research:\u00a0Understanding the market before getting on the ground is crucial.<\/span><\/strong><span data-text-color-mark=\"rgb(14, 16, 26)\"> Thorough market research will inform you about the existing competitors, customer requirements, current and emerging technologies, etc. Underestimating competitors and their offerings can wipe out the existence of your Fintech. Further, there is a need to provide unique offerings to enter and dominate the market.\n<p><\/span><\/li>\n<li data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">Changing financial landscape: The economic landscape<\/span><\/strong><span data-text-color-mark=\"rgb(14, 16, 26)\">\u00a0is constantly evolving. For instance, with the advent of Web 3.0 technology, Fintechs are in search of a way to integrate blockchain technology with the existing financial landscape. Moreover, new products are launched in the market, like crypto lending, buy now pay later, etc., to woo customers. However, it also comes with a drawback. It doesn\u2019t take much time for existing technology to become obsolete; therefore, Fintechs must adapt quickly to the changing financial landscape to remain relevant and competitive. The more flexibility a fintech has, the more resilient it will be to the changing landscape and the chance to succeed will be greater.\n<p><\/span><\/li>\n<li data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">Cost of acquisition: In today\u2019s startup era, customer acquisition costs are<\/span><\/strong><span data-text-color-mark=\"rgb(14, 16, 26)\"> Most startups incur massive cash burns to acquire customers by giving deep discounts, freebies, rewards, etc. This leads to cut-throat competition among the startups, and in no time,\u00a0<\/span><span data-text-color-mark=\"#000000\">you\u00a0<\/span><span data-text-color-mark=\"rgb(14, 16, 26)\">will find a new competitor with differentiated offerings chewing up\u00a0<\/span><span data-text-color-mark=\"#000000\">your<\/span><span data-text-color-mark=\"rgb(14, 16, 26)\">customer base. Startups raise massive funding to finance their customer cost of acquisition. However, it is essential to understand that, ultimately, businesses work for profits, and therefore, it is vital to convert the startup to profitability.\n<p><\/span><\/li>\n<li data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">Regulations and compliances:<\/span><\/strong><span data-text-color-mark=\"rgb(14, 16, 26)\">The financial sector has its own regulations and resultant compliance requirements. For instance, <\/span><span data-text-color-mark=\"#000000\">you<\/span><span data-text-color-mark=\"#ea3323\"> must comply with all relevant SEBI laws and regulations for stock broking services in India. In the case of banking or payment services, <\/span><em><span data-text-color-mark=\"#000000\">you<\/span><\/em><span data-text-color-mark=\"#000000\"> need to ensure adherence to RBI regulations and requirements. These are in place to protect consumer interest and avoid irregularities. Therefore, a Fintech missing out on such regulatory compliances can attract heavy penalties.\n<p><\/span><\/li>\n<li data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">Information technology risks:<\/span><\/strong><span data-text-color-mark=\"rgb(14, 16, 26)\">The fintech industry involves technology in finance. Therefore, it is always susceptible to information technology risks. This can include cyber attacks, data loss, theft, server issues, etc. If it happens frequently, it can affect the customer experience, leading to the loss of customers. Therefore, fintechs must ensure good IT controls and security systems to mitigate those risks. <\/span><\/li>\n<\/ul>\n<h2 data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">How to avoid failures?<\/span><\/strong><\/h2>\n<p data-node-text-align=\"justify\"><span data-text-color-mark=\"rgb(14, 16, 26)\">To reduce the chances of failure,\u00a0you\u00a0must ensure that\u00a0your\u00a0Fintech mitigates the above risks. In addition, as the competition is enormous, you must add value to your customers. This can be done by providing differentiating offerings and services to your customers. However, before starting with your Fintech, it is important to understand the Fintech industry, how it operates, the market segments in which Fintech operates, etc. This will increase the odds of your success.<\/span><\/p>\n<p data-node-text-align=\"justify\"><span data-text-color-mark=\"rgb(14, 16, 26)\">Further, apart from the above risks, there are certain prominent reasons that lead to the failure of FinTechs. These include inadequate funding, inability to comply with the laws of the land, low-cost metrics and macroeconomic cycles and government policies. Mitigating these risks is important to ensure the success of your FinTech.<\/span><\/p>\n<h2 data-node-text-align=\"justify\"><strong><span data-text-color-mark=\"rgb(14, 16, 26)\">How to understand the Fintech industry?<\/span><\/strong><\/h2>\n<p data-node-text-align=\"justify\"><span data-text-color-mark=\"rgb(14, 16, 26)\">Understanding the Fintech industry is not difficult. Further, in today&#8217;s world, where we have access to courses for almost everything, you don&#8217;t need to start a FinTech to understand how the FinTech industry operates. You can enrol in a\u00a0<\/span>financial technology course<span data-text-color-mark=\"rgb(14, 16, 26)\">\u00a0to gain insights into the Fintech ecosystem. Imarticus Learnings has an exclusive\u00a0<\/span><strong><a href=\"https:\/\/imarticus.org\/Professional-Certificate-Course-FinTech\/\">Fintech Certification Program<\/a><\/strong><span data-text-color-mark=\"rgb(14, 16, 26)\">\u00a0that provides detailed learning about how Fintechs operate and case studies to understand real-life practical examples. If you are searching for the\u00a0<strong><a href=\"https:\/\/imarticus.org\/Professional-Certificate-Course-FinTech\/\">best Fintech courses in India<\/a><\/strong>, it\u2019s time to enrol in Imarticus Learnings. You can also contact us through chat support.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is fintech failing? A practical opinion As the startup craze is booming, more and more startups are emerging with new age and sometimes disruptive technologies. Integration of technology in the financial industry is what Fintechs are doing. Fintech startups are not only limited to the banking and financial industry but also include insurance and stock [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":247135,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[22],"tags":[3236],"class_list":["post-248394","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-best-fintech-course"],"acf":[],"aioseo_notices":[],"modified_by":"Imarticus Learning","_links":{"self":[{"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/posts\/248394","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/comments?post=248394"}],"version-history":[{"count":0,"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/posts\/248394\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/media\/247135"}],"wp:attachment":[{"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/media?parent=248394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/categories?post=248394"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imarticus.org\/blog\/wp-json\/wp\/v2\/tags?post=248394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}