Enhanced compliance standards, and the introduction of new regulations in the case of crypto businesses, is making it harder for smaller businesses to grow and startups to enter the market. Only those with a robust growth strategy are likely to succeed. So, how can fintechs prepare themselves for scaling at a time of instability and consolidation?

How can the fintech industry scale today?

Not so long ago, the aim for fintech businesses was growth at any cost. Companies wanted to go bigger, further, faster. And most of them failed. Just 25% of fintechs succeed. Something needs to change within the industry, and with the current period of heightened volatility, a more strategic scaling strategy is required.

Tactical growth strategies for fintech brands

Data-driven decision making

Data will always be the most valuable asset available to fintech. But while most businesses appreciate this, they don’t always know how to use data properly, focusing on surface level applications rather than mining its full potential. In my business, we use data to provide the insights we need to make fully informed decisions. So, rather than simply tracking user engagement, we analyse the entire customer journey. Focusing on which users stay, what helped them make that decision, and where and why drop off occurs. When we were experiencing lower than expected uptake, we split tests through every stage of our onboarding process, seeking to discover what was putting people off and how we could simplify the process for our users. It took time and effort, but it ultimately paid off, increasing our conversion rates by over 600%.

For us, the most important takeaway was that most people don’t leave a platform because they dislike the product. They leave because they’re struggling with the interface. It may be too slow, confusing, or appear to be misleading. Your data can help you identify these issues, allowing you to find the solutions you need to overcome them.

User experience

Trust and user experience are paramount when you’re trying to encourage new customers to use an unfamiliar fintech product. You need to make the experience as simple and friendly as possible. If you don’t, your bounce rate will continue to grow. However, by prioritising user experience (UX) and creating an intuitive, frictionless interface, you not only gain that essential extra time to convert interest into sign-ups, but you also build customer trust and loyalty.

Niche focus

You can’t cater to everyone. There’s a misconception that the wider your customer base, the more business you’ll attract. But the reality is that your business is far more likely to succeed if you serve a niche set of customers really well than if you try to serve as many customers as possible. It is far more productive to focus on attracting and retaining the right customers, who’s needs you can completely fulfil. That way, you gain long-term loyalty and customer satisfaction. When you’ve achieved that, and have systems in place to ensure that you can continue to answer the evolving needs of your core customer base, you may then be able to expand into serving other demographics. Just don’t lose sight of those core customers.

Trust

Trust is not something that is always associated with fintech, in particular the crypto market to date. Known more for fraud, scams, and collapses, the industry has garnered a reputation for shady opacity which has deterred many would-be investors. This is something that fintech has worked hard to avoid, but there is still an element of the unknown. Regulation is doing something to dispel this, and will hopefully do the same for crypto in time. While the EU’s Markets in Crypto-Assets (MiCA) regulation has been met with scepticism, other regulations are currently being planned, with the aim of bringing legitimacy and transparency to the space. However, until that time, it's in the grace of individual companies to put into practice the safety and compliance standards that their customers deserve. This has always been a priority for my business. Not only to make compliance easier when it becomes an obligation, but to earn our customers’ trust.

Transparency

Transparency is no longer a ‘nice to have’. Customers now expect it, especially in financial services. We have the 2008 financial crisis to thank for that. And it’s no bad thing. But if you want customers to trust you with their business, you have to be open with them. In fintech that means being open to third-party security audits, informing customers of potential risks, and not trying to hide problems. Transparency builds trust and loyalty, giving your business the stable foundation it needs to grow.

Education

Lastly, there’s the matter of education. For my business, customer education has always been a key differentiator. Customers come to us because we help them to understand the investment space they’re moving into, enabling them to grow their portfolio with confidence. And this matters, because for most people, cryptocurrency remains a great unknown, despite the fact that it’s been around since 2009. So, whether you’re working with business customers or individual investors, the more you can help them to understand the space, the more they’re likely to explore it. And the same premise applies to fintech. It might not be so ‘foreign’, but it’s still different.

It's not an easy time to be doing business right now. There’s uncertainty and instability everywhere. But if you want your fintech business to scale, you have to invest in your customers. Aiming for those big, exciting growth numbers may be appealing, but it’s not sustainable. If you put your customers first however, ensuring that your products and services meet their needs and they know how to use them, you can build a committed and loyal customer base that will stick with you, even through the turbulence. And that’s what you need if you’re going to help your business grow.

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