The banking & financial industry across the world is flourishing with a large number of transactions. The global digital payment transactions in 2019 were estimated to be over 750 billion in terms of volume and valued at over USD 740 trillion. Moreover, the digitalization of financial offerings and growing digital transformation across the BFSI sector are contributing to the market growth.

 The digital revolution has been accelerated even lead by financial technology. By pushing traditional institutions through innovation, they could change market practices. How to define Fintech? It comes to my mind three words: Digital, Agile, Young.

 Those factors explain that the Global Fintech Market will grow at a Compound Annual Growth Rate of around 20% over the next four years. The market value is expected to reach $ 305 billion by 2025, according to GlobeNewswire.

However, life is not a long quiet river, Fintech companies have big challenges to face if they want to succeed and grow :

1. Innovation: this is the main advantage that brings added value and increases competitiveness.

 The innovation is temporary and rapidly imitated by big actors, banks, and financial institutions. The challenge is to stay on the top and keep find new ideas. And it is not easy. The Fintech Company, often a small start-up is focused on the IT solution and can neglect the human component. It is so easy to miss the customer’s point of view, to avoid their feedback. But the fact is that the client is sensitive to the way his voice is listened to. The condition to be on the top of the innovation is to find a good balance between the innovation and some “pauses to listen to the voice of the customers”.

2. Compliance and regulation

 Regulation concern all aspects of the Finance industry and the business Trust is based on the respect of the rules, meaning all the components of the regulation (law, tax, compliance, anti-money laundering, KYC…).

 Dealing with innovation, focusing on agile technology and fast processes, the company may avoid some points of regulation that would lead to a fine or a loss of trust from clients and partners. One of their concerns should be updated and advised regarding the regulation part.

3. Risk management

 Outside the traditional world of the bank, Fintech appears fast driving and highly risky. This image can be negative to build a partnership with banks and financial institutions but also regarding the customers’ trust.

 This tendency requires to invest in transparency regarding security, risk management, procedures…etc, and above that the appropriate communication to the different actors.

4. International expansion

 To grow, Fintech must expand its business and partnership with banks in a global way. That means going to the international. The challenge is to make all decisions regarding that goal. For example, if one banking partner does not provide the global network you need, you will be forced to work on opening up another banking relationship that can be very long. The solution is to partner with a non-bank provider of liquidity with the right technology, experience, and network for compliant cross-border payments

If you need help for your business regarding any international payment topic, regulation issue or advice for your international development , you can send us an email at [email protected]