With FinTech being currently a hot topic in the startup world, we have partnered with Startupbootcamp FinTech and brought together some of the most informed women in the industry to see how they have dealt with challenges in FinTech, including regulations, gaining credibility and working in male dominated industries.
Overcoming the biggest challenges in FinTech
There are many hurdles when it comes to entering the FinTech industry. The barriers to entry are quite high as it is a hugely regulated industry; startups may be required to raise huge amounts of money and liaise with large banks and infrastructures.
So how can you overcome these barriers? Research is crucial. It is important to get educated and obtain knowledge on the regulatory landscape. Studying competitors is also useful, especially those one or two steps ahead of you. Look into joining an accelerator program (like Startupbootcamp FinTech) and talk to other entrepreneurs. Don’t be afraid to ask as many questions as possible.
There is good news if you are struggling with regulations. Startups can now take advantage of a regulatory sandbox developed by the Financial Conduct Authority. This will be a safe space for you to test innovative products, services, business models and delivery mechanisms in a live environment without immediately experiencing any consequences.
Another common challenge is the clash of culture between startups and large banks. To overcome this, both groups will have to venture into unfamiliar territories, so superior communication and keeping an open mind are key.
Is the market for FinTech startups saturated?
"There is space in the market for startups that cover regulations", says Elizabeth. RegTech is a buzzword in the industry at the moment. Banks are looking for any new products or services that help them comply with regulations in a more efficient way, especially with record keeping. It may sound unsexy or boring, but it is a very lucrative field as banks need these services. There is also a market for digital technology identity solutions such as digital passports as the government are currently looking into these products and services for pensions and security.
When it comes to saturation, Elizabeth believes that there are too many payment, bill splitting apps and challenger banks already in the market.
How can you build credibility in FinTech, when you have limited experience?
Focus on proving your idea to yourself first, says Arya. After all, if you don’t believe in yourself, then who will? It is important to focus on being of value to your customers. Go above and beyond for them and understand your target audience.
If you don’t quite know how things work in the FinTech world, ask for help from people that have more experience than you and see if they can help bring in some of the resources and connections.
You may also surprise yourself in what you enjoy learning about. FinTech can be thought of as bland and number focused, but it's often overlooked that the focus is around developing a solution that solves a problem in creative ways, says Arya.
It is very important to get the team right in your are starting up in FinTech, maybe even more than in other industries. Find people with the skills and knowledge you need.
Lastly, persevere. Rome was not built in a day and neither will your credibility. Sometimes all you need to do is to keep pushing and give it some time.
How will Brexit affect the FinTech industry in London?
Our speakers had a lot to say on the UK leaving EU. Everyone agreed on the importance of preparation and the need to be aware of what is coming.
Paulina says the outcome depends on which model the UK adopts after exit. There are three options:
The Norway model where the UK retains trade and single market privileges
The Switzerland model where the UK is no longer a member of the EU and abides by its own financial service regulations, in which case we will formulate new bilateral trade agreements
The UK no longer being an EU country, in which case it would negotiate entry to Europe from a first principle basis
She also identified 6 areas of impact that we should be aware of in order to prepare:
Free movement of labour – employment law bureaucracy may increase; in this case we will be less likely to attract talent
Investment – access to European venture capitalists could become harder and they may be less likely to invest
Free movement of goods – the UK could lose access to the single market and this will make trade with other EU countries less profitable
Privacy data protection and security – we may need to negotiate new terms in this area
Regulation – the UK may lose its ability to authorise services to EU countries, services being regulated by the FCA (Financial Conduct Authority) may no longer be useful if the UK can not trade with other countries
It may become harder for London to become the second Silicon Valley due to the perception of the UK from other EU countries and individuals
All speakers were hopeful for the future, as London is a global city and has been a financial hub for centuries. They believe that the UK will survive the exit from the EU and not get away without having a free trade agreement in some way. It was also emphasised that the UK has the opportunity to trade globally with Africa, America and China. Most importantly, as interesting situations arise, there can be many positives such as new ideas being born, creating opportunities for people to work harder and emerge stronger.
How should women navigate inequality in the FinTech world?
Both finance and technology are industries that are traditionally male-dominated and there is often a question of whether women should join in with the macho male stereotype to fit in. However, you won't win in the long-term if you don't stay true to yourself. The best way to reach your potential is to keep your individuality, whether it's considered to be feminine, masculine or anything in between.
To encourage more women to work in these fields, it is important for the females in the industry to be visible, to speak about and be proud of what they do, and to mentor the future generation.
Being an entrepreneur is lonely and being the only woman in the room is even lonelier. That's why we have built our community as a supportive tribe who can help with that. As you can see, there are women in FinTech who are doing amazing things.
Join our community, if you'd like the company of other female founders.