business plan fintech pdf

Fintech Startup Business Plan [Sample Template]

By: Author Tony Martins Ajaero

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Are you about starting a fintech startup? If YES, here is a detailed sample fintech startup business plan template & FREE feasibility report.

It is no longer news that the advent of the internet has paved way for unlimited business opportunities that one can easily start and run from a location and have clients in different countries of the world. One of the businesses that can easily be started by leveraging on internet technology and financial expertise is a fintech startup business.

You might ask ‘what is Fintech?’

Simply put, fintech, which is also known as financial technology, is a technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance.

The use of smartphones for mobile banking, investing services and cryptocurrency are examples of technologies aiming to make financial services more accessible to the public.

Starting a fintech startup business can be rewarding but you would have to compete with other well – established fintech companies on the Web. The fact that you will be competing with people from all over the globe is enough reason for you to be result oriented and at the same time be creative with your fintech business.

If you are interested in starting a fintech company, then you should be ready to conduct thorough feasibility studies and market survey before committing your money and other resources to it.

Asides from feasibility studies and market survey, one of the important documents that will aid the success of the business is a good and workable business plan. Below is a sample fintech startup business plan template that can help you write your own business plan with little or no stress.

A Sample Fintech Startup Business Plan Template

1. industry overview.

Players in the Financial Technology (FinTech) industry consist of both startups and established financial institutions and technology companies trying to replace or enhance the usage of financial services provided by existing financial companies.

Basically, they integrate finance and technology in ways that provide a variety of new services to businesses and consumers. Most of the services offered by FinTech companies had hitherto been delivered by traditional financial institutions such as banks.

If you are a close observer of happening in the FinTech industry, you will agree that the industry is highly fragmented and expanding quickly. Areas such as peer-to-peer lending, money transfer, and digital banks have performed especially strongly over the past five years.

The industry heavily relies on third-party financing. Improving economic conditions over the past five years have supported funding from both private and public sources.

Fintech companies in the united states raised .4 billion in 2018, a 43 percent increase over 2017 figures. Global investment in financial technology increased more than 2,200 percent from $930 million in 2008 to more than $22 billion in 2015.

The nascent financial technology industry in London has seen rapid growth over the last few years, according to the office of the Mayor of London. Forty percent of the City of London’s workforce is employed in financial and technology services.

In Europe, $1.5 billion was invested in financial technology companies in 2014, with London-based companies receiving $539 million, Amsterdam-based companies $306 million, and Stockholm-based companies receiving $266 million in investment. After London, Stockholm is the second highest funded city in Europe in the past 10 years.

Europe’s fintech deals reached a five-quarter high, rising from 37 in Q4 2015 to 47 in Q1 2016. Lithuania is starting to become a northern European hub for financial technology companies since the news in 2016 about the possible exit of Britain from the European Union. Lithuania has issued 51 fintech licenses since 2016, 32 of those in 2017.

For example, a report published by IBISWorld shows that in uk, the Financial Technology (FinTech) industry has grown strongly over the past five years, with revenue forecast to increase at a compound annual rate of 9.9 percent over the five years through 2018-19.

The industry has been supported by an accommodative regulatory environment, in addition to good access to skilled employees and external finance. However, UK FinTech companies face some headwinds, including strong competition with firms in other countries such as Singapore, New York and California.

In addition, the industry has had to contend with an increasingly volatile economic environment since the EU referendum, while comparatively high office rental costs have affected operators. Nonetheless, revenue is expected to increase by 10.5 percent during 2018-19 to reach £9.2 billion.

Despite the fact that financial technology (FinTech) business is still much of a Green business, the business will continue to blossom because more and more users will embrace the use of the services offered by financial technology (FinTech) companies in the nearest future.

So, if you have an entrepreneurial mentality and you wish to join a massive technological revolution, you can start your own financial technology business.

Some of the factors that encourage entrepreneurs to start their own financial technology (FinTech) business could be that the business is easy to set up and the startup capital is indeed affordable; you can actually start your own financial technology (FinTech) business from any part of the world.

All you need to do is to have the right network with financial institutions like banks et al and be ready to abide by the clearing rules. You don’t necessarily need to see the people you are doing business with since you can transact business with clients from any part of the world.

Lastly, starting a financial technology (FinTech) business requires professionalism, advance mathematics skills and good grasp of how cryptocurrency and a digital payment system works on a global platform. Financial services are among the most heavily regulated sectors in the world.

Besides, you would need to get the required certifications and license and also meet the required standard for such business before you can be allowed to start a financial technology (FinTech) business in the United States.

2. Executive Summary

Pay Net® FinTech, Inc. is a registered and licensed financial technology (FinTech) and a digital payment system company incorporated under the law of the United States of America. The business will be based in Silicon Valley – California and we are able to secure a well – positioned and standard office facility.

We are aware that to run a standard financial technology (FinTech) startup company can be demanding which is why we are well trained, certified and equipped to perform excellently in our chosen line of business.

Pay Net® FinTech, Inc. is a client – focused and result driven financial technology (FinTech) and a digital payment system company that provides tested, trusted and broad – based financial technology services at an affordable fee that won’t in any way put a hole in the pocket of our clients.

We will offer standard and professional financial technology (FinTech) services to all to our clients at local, state, national, and international level. We will ensure that we work hard to meet and surpass our clients’ expectations.

At Pay Net® FinTech, Inc., our client’s best interest would always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hire professionals from any part of the world who are experienced in financial technology.

Pay Net® FinTech, Inc. will at all – time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Our plan is to position the business to become one of the leading brands in the financial technology (FinTech) industry in the whole of Silicon Valley – California, and also to be amongst the top 10 financial technology (FinTech) companies in the United States of America within the first 10 years of operation.

This might look too tall a dream but we are optimistic that this will surely be realized because we have done our research and feasibility studies and we are enthusiastic and confident that Silicon Valley is the right place to launch our financial technology business.

Pay Net® FinTech, Inc. is founded by Larry Willis and Justin Bob, his business partner for many years. The organization will be managed by both of them since they have adequate working experience to manage such business. Larry Willis has over 5 years’ experience working at various capacities within the financial technology (FinTech) and digital payment system  industry in the United States of America.

Larry Willis graduated from both University of California – Berkley with a Degree in Information Technology, and University of Harvard (MBA). He is also a Certified Bitcoin Professional (CBP) and Justin Bob has Blockcerts Certification, Cryptocurrency certification, Ethereum certification, and Blockchain professional certification.

3. Our Products and Services

Pay Net® FinTech, Inc. is going to offer varieties of services within the scope of the financial technology (FinTech) and digital payment industry in the United States of America. Our intention of starting our financial technology company is to offer nothing but the best of services.

We are prepared to make profits from the industry and we will do all that is permitted by the law in the United States to achieve our business goals. Our business offerings are listed below;

• Operating peer-to-peer lending platforms
• Digital banking
• Payment services
• Investment platforms and management
• Credit and lending
• Distributed ledger technology
• Operating investment platforms
• Investment management services
• Unbanked/underbanked, services that seek to serve disadvantaged or low-income individuals who are ignored or underserved by traditional banks or mainstream financial services companies.

4. Our Mission and Vision Statement

• Our vision is to disrupt incumbents in the finance industry by expanding financial inclusion and using technology to cut down on operational costs.
• Our mission is to offer services that will integrate finance with technology in order to provide new or improved services to businesses and consumers in the United States and from all across the globe.

Our Business Structure

Ordinarily we would have settled for two or three staff members, but as part of our plan to build a standard financial technology company in Silicon Valley – California, we have perfected plans to get it right from the beginning which is why we will ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.

The kind of financial technology business we intend building and the business goals we want to achieve is what informed the amount we are ready to pay for the best hands available in and around Silicon Valley – California. Below is the business structure that we will build Pay Net® FinTech, Inc. on;

• Chief Executive Officer

FinTech Operations Specialist

• Programmers and Software Developers

Admin and HR Manager

Digital Marketers (Marketing and Sales Executive)

• Customer Care Executive / Front Desk Officer

Roles and Responsibilities

Chief Executive Office:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Monitor and reconcile accounts
• Assist in reconciling FED subaccounts
• Act as liaison between various bank departments to facilitate account maintenance, resolve issues and escalate inquiries
• Maintain proficient knowledge of the rules and regulations, including but not limited to, the Bank Secrecy Act (BSA), USA Patriot Act, OFAC, Regulation E, Truth In Savings Act and Unfair, Deceptive or Abusive Acts or Practices (UDAAP)
• Participate in weekly status calls
• Assist in maintaining policies, procedures and risk assessments
• Compliance with all regulatory requirements

Software Developer/Programmer

• Responsible for designing, installing, testing and maintenance of software systems for the organization
• Reviewing current systems
• Presenting ideas for system improvements, including cost proposals
• Working closely with analysts, designers and staff
• Producing detailed specifications and writing the programme codes
• Testing the product in controlled, real situations before going live
• Maintaining the systems once they are up and running
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defining job positions for recruitment and managing interviewing process
• Carrying out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office activities
• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts
• Writing winning proposal documents, negotiate fees and rates in line with company policy
• Responsible for handling business research, marker surveys and feasibility studies
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Document all customer contact and information
• Represent the company in strategic meetings
• Help increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• create reports from the information concerning the financial transactions as recorded
• Prepare the income statement and balance sheet using the trial balance and ledgers
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Associate Fraud Specialist- Call Center/Merchant Disputes Specialist / Help Desk Officer

• Reviews and responds to suspected fraudulent service requests, queues, and transaction records to identify potentially fraudulent transactions or accounts.
• Identifies problems by performing relevant research using the appropriate tools
• Utilizes custom and standard software programs and applications as well as manual review to analyze transactional and customer record for fraud.
• Maintains control of inbound calls
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Performs and understands systems such as Enhanced Chargebacks and debit network rules.
• Explains decisions and outcomes to internal and external customers, clients and cardholders.
• Exhibits specialized knowledge in regulatory rule requirements based upon review of non-standard, cardholder-provided documentation.

6. SWOT Analysis

Pay Net® FinTech, Inc. engaged the services of a core professional in the area of business consulting and structuring to assist the firm in building a well – structured financial technology company that can favorably compete in the highly competitive financial technology industry.

Part of what the business consultant did was to work with the management of our organization in conducting a SWOT analysis for Pay Net® FinTech, Inc. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Pay Net® FinTech, Inc.;

We can boast of a team that has analytical and critical thinking skills that can help them find creative solutions for our clients. Aside from the synergy that exists in our carefully selected workforce, we have a very strong online presence and we are well positioned and we know we will attract loads of clients from the first day we open our doors for business.

One of the weaknesses that are obvious to us is the lack of capacity and inability to compete with big players in the industry especially as it relates to partnering with major players in the banking and finance industry. Most of them like partnering with businesses that have been in existence for a while.

• Opportunities:

The opportunities in the financial technology (FinTech) and digital payment system industry is massive considering the number of online trading companies and people that make online transactions all over the world. As a standard financial technology (FinTech) startup company, we are ready to take advantage of any opportunity that comes our way.

Businesses in the financial technology (FinTech) industry, particularly start-ups, face a host of technological, legal and regulatory challenges and unexpected events. For example, automation of processes and digitization of data makes fintech systems vulnerable to attacks from hackers.

Recent instances of hacks at credit card companies and banks are illustrations of the ease with which bad actors can gain access to systems and cause irreparable damage.

7. MARKET ANALYSIS

• Market Trends

In this age and time when transactions worth multiple thousands of Dollars are conducted online, you can be rest assured that financial technology (FinTech) startups are in for good times. You will agree that there is hardly any serious player in the cyberspace who is not transacting with cryptocurrency and hosting digital payment system on their platform.

This goes to show that sooner than later, cryptocurrency and digital payment system will become the most used payment system in the globe. Trends toward mobile banking, increased information, data, and more accurate analytics and decentralization of access will create opportunities for all four groups to interact in unprecedented ways.

In recent time, financial services institutions offered a variety of services under a single umbrella. The scope of these services encompassed a broad range from traditional banking activities to mortgage and trading services. In its most basic form, Fintech unbundle these services into individual offerings.

The combination of streamlined offerings with technology enables fintech companies to be more efficient and cut down on costs associated with each transaction. Another notable trend shows that financial technology (FinTech) is also being leveraged to fight fraud by leveraging information about payment history to flag transactions that are outside the norm.

Lastly, operators in this industry ensure that they get all the testimonials they can and publish them on their website and promotional materials. This usually goes a long way to give them credibility and also to attract more clients to them.

8. Our Target Market

Pay Net® FinTech, Inc. will initially serve small to medium sized business, but that does not in any way stop us from growing to compete with the leading financial technology (FinTech) companies in the United States and from across the globe.

As a standard and licensed financial technology (FinTech) startup company, Pay Net® FinTech, Inc. offers a wide range of cryptocurrency and digital payment services hence we are well trained and equipped to service a wide range of clientele base such as;

• B2B for banks
• Banks business clients
• B2C for small businesses
• Consumers (everyday individual clients)

Our competitive advantage

It is indeed a growing competition in the industry hence a host of tech-savvy industry watchers warn that keeping apace of fintech-inspired innovations requires more than just ramped up tech spend. Rather, competing with lighter-on-their-feet startups requires a significant change in thinking, processes, decision-making, and even overall corporate structure.

Part of our competitive edge is that we can deploy new technologies, like machine learning / artificial intelligence, predictive behavioral analytics, and data-driven marketing, automated customer service technology, utilizing chatbots and AI interfaces to assist customers.

We also have access to highly skilled workforce, ready access to investment funding and the capacity to comply with government regulations.

9. SALES AND MARKETING STRATEGY

We are mindful of the fact that there is fast – growing competition amongst players in the financial technology industry in the United States of America and around the globe; hence we have been able to hire some of the best business developers cum digital marketers to handle our sales and marketing.

Our sales and marketing team will be recruited base on their vast experience in the industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of the organization. We will also ensure that our excellent job deliveries speak for us in the marketplace. Pay Net® FinTech, Inc. is set to make use of the following marketing and sales strategies to attract clients;

• Introduce our business by sending introductory letters alongside our brochure to all the bitcoin exchange and trading companies, programmers, investors, and internet – business oriented people and organizations within and outside the United States
• Promptness in bidding for online payment platform contracts from bitcoin exchange and trading companies cum bitcoin traders, programmers, investors, and internet – business oriented people and organizations within and outside the United States
• Advertise our business in relevant programming magazines, radio and TV stations
• Attend international financial technology (FinTech) related seminars and business fairs et al
• Create different packages for different category of clients in order to work with their budgets
• Leverage on the internet to promote our business
• Join related associations around us with the aim of networking and marketing our services; we are likely going to get referrals from such networks.

Sources of Income

Pay Net® FinTech, Inc. is established with the aim of maximizing profits in the financial technology (FinTech) and digital payment industry and we are going to ensure that we do all it takes to attract clients on a regular basis. Pay Net® FinTech, Inc. will generate income by offering the following services and products

• Unbanked/underbanked, services that seek to serve disadvantaged or low-income individuals who are ignored or underserved by traditional banks or mainstream financial services.

10. Sales Forecast

One thing is certain, there would always be bitcoin exchange and trading companies, people and organizations that make online transactions that would need the services of financial technology (FinTech) companies.

We are well positioned to take on the available market in Silicon Valley – California and in the cyberspace and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base beyond Silicon Valley to other cities in the United States of America and in the cyberspace.

We have been able to examine the financial technology (FinTech) market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Silicon Valley – California.

Below are the sales projections for Pay Net® FinTech, Inc., it is based on the location of our business and the services and products that we will be offering;

• First Fiscal Year:  $250,000
• Second Fiscal Year:  $450,000
• Third Fiscal Year:  $950,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and internet shutdown within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.

11. Publicity and Advertising Strategy

We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.

We are set to take the financial technology (FinTech) and digital payment system industry by storm which is why we have made provisions for effective publicity and advertisement of our financial technology (FinTech) startup company. Below are the platforms we intend to leverage on to promote and advertise Pay Net® FinTech, Inc.;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events/programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our brand
• Install our Billboards in strategic locations all around Silicon Valley
• Distribute our fliers and handbills in target areas
• Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our company’s logo et al.

12. Our Pricing Strategy

At Pay Net® FinTech, Inc. we will keep our fees a little bit below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance.  In addition, we will also offer special discounted rates to startups, nonprofits, cooperatives, and small social enterprises who want to transact with cryptocurrency and other digital payment platforms.

• Payment Options

The payment policy adopted by Pay Net® FinTech, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Pay Net® FinTech, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via online bank transfer
• Payment via mobile money
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients.

13. Startup Expenditure (Budget)

These are the areas we are looking towards spending our startup capital on;

• The total fee for incorporating the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400.
• The amount needed to acquire a suitable Office facility in a business district for 6 months (Re – Construction of the facility inclusive) – $40,000.
• Marketing promotion expenses for the grand opening of Pay Net® FinTech, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The total cost for hiring Business Consultant – $2,500
• The cost for equipping the office (computers, software apps and hardware such as Application-specific integrated circuit (ASIC) machines and other cryptocurrency and digital payment system related software apps, internet server, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $45,000
• The cost of launching our official Website – $2,000
• Budget for paying at least two employees for 3 months and utility bills – $45,000
• Additional expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
• Miscellaneous – $1,000

Going by the report from the research and feasibility studies, we will need about Two Hundred and Fifty Thousand US Dollars ($250,000) to set up a small scale but standard financial technology company in the United States of America.

Generating Funds/Startup Capital for Pay Net® FinTech, Inc.

Pay Net® FinTech, Inc. will be owned and managed by Larry Willis and his business partner Justin Bob. They are the financiers of the company, but may likely welcome partners later which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $50,000 (Personal savings $40,000 and soft loan from family members $10,000) and we are at the final stages of obtaining a loan facility of $200,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting Pay Net® FinTech, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to offer our financial technology services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

Pay Net® FinTech, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more as determined by the board of the organization. We know that if that is put in place, we will be able to hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Leasing a standard and well positioned office facility in the heart of Silicon Valley – California: Completed
• Generating part of the startup capital from the founder: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the needed software applications, internet server, furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with vendors and key players in the industry: In Progress

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Home » Financial Services

A Sample Fintech Startup Business Plan Template

Fintech, which is also known as financial technology, is the technology that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance.

The use of smartphones for mobile banking, investing services, and cryptocurrency are examples of technologies aiming to make financial services more accessible to the general public. Even though this segment of fintech may see the most headlines, the big money still lies in the traditional global banking industry and its multi-trillion-dollar market capitalization.

Available data shows that globally, the number of fintech companies grew to 1,463, with 2,745 unique investors. They also acquired $25.6 billion in investments in H1 2020. The total transaction value of digital payments grew from $4.1 trillion in 2019 to $5.2 trillion in 2020.

Steps on How to Write a Fintech Startup Business Plan

1. executive summary.

Money Net© FinTech Company, Inc. is an American-based financial technology company. Our head office will be located in an office facility in the heart of New York City. Money Net© FinTech Company, Inc. is a global fintech payment system that will store and transfer payment information.

Consumers will make use of our applications to pay for goods and services directly as well as make peer-to-peer fund transfers using their mobile devices. David Williams is the founder and CEO of Money Net© FinTech Company, Inc.

Company Profile

A. our products and services.

• Operating peer-to-peer lending platforms
• Digital banking
• Payment services
• Investment platforms and management
• Credit and lending
• Distributed ledger technology
• Operating investment platforms
• Investment management services
• Unbanked/underbanked, services that seek to serve disadvantaged or low-income individuals who are ignored or underserved by traditional banks or mainstream financial services.

b. Nature of the Business

A fintech business is meant to operate the business-to-consumer model or transfer completely to a business-to-business approach.

c. The Industry

Money Net© FinTech Company, Inc. will operate under the Financial Technology (FinTech) industry.

d. Mission Statement

Our mission is to make financial services more accessible to all and sundry and our services will include traditional financial transactions like saving, investing, loan processing, and also blockchain and cryptocurrency transactions.

e. Vision Statement

Our vision is to be known as the leading innovative digital technology solutions fintech company that aim to optimize financial services for her clients.

f. Our Tagline (Slogan)

Money Net© FinTech Company, Inc. – Your Safe and Trusted FinTech Company!

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

Money Net© FinTech Company, Inc. will be formed as a Limited Liability Company (LLC).

h. Our Organizational Structure

• Chief Executive Officer
• Company’s Lawyer/Secretary
• FinTech Operations Specialist
• Programmers and Software Developers
• Admin and HR Manager
• Digital Marketers (Marketing and Sales Executive)
• Customer Service Executive/Front Desk Officer

i. Ownership/Shareholder Structure and Board Members

• David Williams (Owner and Chairman/Chief Executive Officer) 51 Percent Shares
• Olsen Vincent (Board Member) 14 Percent Shares
• Jude Soares (Board Member) 10 Percent Shares
• Paul Nelson (Board Member) 10 Percent Shares
• Zara Mack (Board Member and Sectary) 10 Percent Shares.

SWOT Analysis

A. strength.

• Effective structure in place to help consumers enjoy a seamless digital experience
• Highly experienced and qualified employees and management
• Highly secured payment platform
• Access to finance from business partners
• Water-tight strategies on how to expand beyond major markets
• Good returns on investment for our investors.

b. Weakness

• Financial Constraints
• We will be competing with well-established fintech companies and traditional banks
• Inability to retain our highly experienced and qualified employees longer than we want

c. Opportunities

• Partnerships and mergers between established companies and fintech startups are becoming more frequent.
• Digital banking services are taking over as 46 percent of people exclusively use digital channels for their financial needs
• Good support structure for fintech companies in the United States of America.

i. How Big is the Industry?

It is safe to say that the Financial Technology (FinTech) industry is massive. This is because the per-share value of the Global X Fintech ETF has more than tripled from $15 in 2016 to $47 in 2023.

ii. Is the Industry Growing or Declining?

The Financial Technology (FinTech) industry is growing rapidly and available data shows that the total transaction value of digital payments grew from $4.1 trillion in 2019 to $5.2 trillion in 2020. Globally, the number of fintech companies grew to 1,463, with 2,745 unique investors.

iii. What are the Future Trends in the Industry

New technologies, like machine learning/artificial intelligence, predictive behavioral analytics, and data-driven marketing, are what will determine the future trends in the Financial Technology (FinTech) industry. Fintech is also a keen adaptor of automated customer service technology, utilizing chatbots and AI interfaces to assist customers with basic tasks and also keep down staffing costs.

Fintech is also being leveraged to fight fraud by leveraging information about payment history to flag transactions that are outside the norm.

iv. Are There Existing Niches in the Industry? 

Yes, there are niche ideas when it comes to the fintech business, and they are as follow;

• Digital Banking App
• Investment App
• P2P Payment Apps (Peer-to-peer lending)
• Insurance Apps (Alternative insurance underwriting)
• Money-Saving Apps (Digital wallets)
• Crypto Exchange Platform
• RegTech Apps
• Crowdfunding Applications
• Payment gateways
• Transaction delivery.

v. Can You Sell a Franchise of your Business in the Future?

Money Net© FinTech Company, Inc. has plans to sell franchises in the nearest future and we aim to have a strong physical presence in key financial hubs (cities all across the world).

• Unfavorable government policy and regulations.
• Cyber security challenges
• Differences in management and culture
• Liability problems
• Continuously changing consumer demands especially as it relates to how they expect fintech companies to serve them.

i. Who are the Major Competitors?

• Three-way tie

ii. Is There a Franchise for FinTech Business? 

Yes, there are franchises for FinTech business, and they include;

• Libertex (Forex Club Group)
• BI Analytics & Consulting (BI Group)

iii. Are There Policies, Regulations, or Zoning Laws Affecting FinTech Business?

In the United States of America, Fintech is regulated at both the state and federal levels. Each of the 50 states and the federal government has passed its own body of laws that may apply to financial services and providers of financial services.

Please note that because of the scope, scale, and dynamism of the FinTech industry, the sector is often regulated by multiple regulators, both within certain types (e.g., multiple government regulators) and across types (e.g., governmental, self-regulators, and market regulators). Please check with your zoning or planning department to find out what options are available to you.

Marketing Plan

A. who is your target audience.

i. Age Range

Our target market comprises adults above 18 years who have the finance to do business with us.

ii. Level of Education

We don’t have any restriction on the level of education of those we are ready to work with.

iii. Income Level

There is no cap on the level of income of the people that can use our platform.

iv. Ethnicity

There is no restriction when it comes to the ethnicity of the people that can make use of our platform.

v. Language

We have no restrictions when it comes to language.

vi. Geographical Location

People from any geographical location will be welcome to partner with us or do business with our company.

vii. Lifestyle

Money Net© FinTech Company, Inc. will not restrict any investor or client from partnering or doing business with us based on their lifestyle, culture, or race.

b. Advertising and Promotion Strategies

• Host Themed Events That Catch Attention.
• Tap Into Text Marketing.
• Make Use of Billboards.
• Share our Events in Local Groups and Pages.
• Turn our Social Media Channels into a Resource
• Develop our Business Directory Profiles
• Build Relationships with players in the Financial Technology industry.

i. Traditional Marketing Strategies

• Marketing through Direct Mail.
• Print Media Marketing – Newspapers & Magazines.
• Broadcast Marketing -Television & Radio Channels.
• OOH Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
• Leverage direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.

ii. Digital Marketing Strategies

• Social Media Marketing Platforms.
• Influencer Marketing.
• Email Marketing.
• Content Marketing.
• Search Engine Optimization (SEO) Marketing.
• Affiliate Marketing
• Mobile Marketing.

iii. Social Media Marketing Plan

• Start using chatbots.
• Create a personalized experience for our customers.
• Create an efficient content marketing strategy.
• Create a community for our target market
• Gear up our profiles with a diverse content strategy.
• Use brand advocates.
• Create profiles on relevant social media channels.
• Run cross-channel campaigns.

c. Pricing Strategy

When working out our pricing strategy, Money Net© FinTech Company, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package for each transaction, In all our pricing strategy will reflect;

• Cost-Based Pricing
• Value-Based Pricing
• Competition-Based Pricing.

Sales and Distribution Plan

A. sales channels.

Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the Financial Technology industry, and the finance and banking industry to help refer clients to us.

Money Net© FinTech Company, Inc. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating all of these marketing strategies into a marketing mix, so we can have a visible, in-demand service that is competitively priced and promoted to our customers.

b. Inventory Strategy

The fact that we will need office supplies means that Money Net© FinTech Company, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.

c. Payment Options for Customers

Here are the payment options that Money Net© FinTech Company, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

d. Return Policy, Incentives, and Guarantees

At Money Net© FinTech Company, Inc. we do not have a return policy but we will use our discretion when necessary. This is because there are no federal laws that require a merchant to refund money unless the product they sell turns out to be defective.

e. Customer Support Strategy

Our customer support strategy will involve seeking customers’ feedback. This will help us provide an excellent return on investment (ROI) and customer service to all our clients and investors. It will also help us to understand their needs, experiences, and pain points. We will work with effective CRM software to be able to achieve this.

We will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.

Operational Plan

Overall, we plan to expand our revenue by 50 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting investors and strategic partners like banks et al that will enable us to boost our service offerings and to support revenue growth.

a. What Happens During a Typical Day at a FinTech Business?

• The office is open for the day
• Documentation and other administrative works are conducted throughout the day
• Marketers go out in the field to market our services
• Transactions are facilitated and pending queries are resolved
• Maintenance of the server and all payment gateways are carried out as scheduled.
• Report for the day is written and submitted to the required authority
• The office is closed for the day.

b. Production Process (If Any)

There is no production process when it comes to FinTech Business.

c. Service Procedure (If Any)

Fintech payment systems perform two key service functions; they store and transfer payment information. Consumers use these applications to pay for goods and services directly as well as make peer-to-peer funds transfers using their mobile devices.

At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.

d. The Supply Chain

Money Net© FinTech Company, Inc. will rely on key players in all industries to refer business deals and clients to us.

e. Sources of Income

Money Net© FinTech Company, Inc. will make money from offering the following services;

• Unbanked/underbanked services

Financial Plan

A. amount needed to start your financial technology (fintech) company.

Money Net© FinTech Company, Inc. would need an estimate of $1.2 million to successfully set up our Financial Technology (FinTech) company in the United States of America. Please note that this amount includes the salaries of our staff for the first month of operation.

b. What are the Costs Involved?

• Business Registration Fees – $750.
• Legal expenses for obtaining licenses and permits – $7,300.
• Marketing, Branding, and Promotions – $15,000.
• Business Consultant Fee – $2,500.
• Insurance – $5,400.
• Rent/Lease – $200,000.
• Internet Infrastructure and Software Development – $250,000
• Other start-up expenses including, commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
• Operational Cost (salaries of employees, payments of bills et al) – $80,000
• Start-up Inventory – $15,000
• Store Equipment (cash register, security, ventilation, signage) – $4,750
• Furnishing and Equipping – $80,000
• Capitalization Base: $1 million
• Website: $600
• Opening party: $3,000
• Miscellaneous: $2,000

c. Do You Need to Build a Facility? If YES, How Much will it cost?

Money Net© FinTech Company, Inc. will not build a new facility for our Financial Technology company; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.

d. Ongoing Expenses for Our Financial Technology Company?

• Server maintenance
• Transaction fee to a third-party provider
• Utility bills (internet, phone bills, signage and sewage et al)
• Salaries of employees

e. Average Salary of Our Staff

• Chief Executive Officer – $65,000 Per Year
• Company’s Lawyer/Secretary – $50,000 Per Year
• FinTech Operations Specialist – $48,000 Per Year
• Programmers and Software Developers – $47,000 Per Year
• Admin and HR Manager – $45,000 Per Year
• Digital Marketers (Marketing and Sales Executive) – $42,000 Per Year
• Accountant – $40,000 Per Year
• Customer Service Executive/Front Desk Officer – $30,000 Per Year.

f. Sources of Funding for Our Financial Technology Company

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Pitching your business idea and applying for business grants and seed funding from, government, donor organizations, and angel investors
• Source for soft loans from your family members and your friends.

Financial Projection

A. how much should you charge for your service.

At Money Net© FinTech Company, Inc. our fee will be based on the type and volume of transactions on our payment platform. But averagely, we charge $3.50 per transaction.

b. Sales Forecast

• First Fiscal Year (FY1): $3.5 million
• Second Fiscal Year (FY2): $5 million
• Third Fiscal Year (FY3): $9 million

c. Estimated Profit a Year

The ideal profit margin we hope to make at Money Net© FinTech Company, Inc. will be between 25 and 40 percent.

d. Profit Margin of a Financial Technology (FinTech) Company Product/Service

The average net profit margin for Money Net© FinTech Company, Inc. is approximately 17%. The average net profit margin can be higher or lower depending on our additional service offerings and the amount of our overhead expenses.

Growth Plan

Money Net© FinTech Company, Inc. will grow our Financial Technology company by first opening other offices in key cities in the United States of America within the first five years of establishing the business, then we will start selling franchises from the sixth year.

Money Net© FinTech Company, Inc. plans to expand to first to Los Angeles – California, San Francisco – California, Chicago – Illinois, Washington, D.C., Boston – Massachusetts, Miami – Florida, Seattle – Washington, Dallas – Texas, and Philadelphia – Pennsylvania.

The reason we intend to expand to these geographical locations is the fact that available statistics show that the cities have the highest FinTech market in the United States.

The founder of Money Net© FinTech Company, Inc. plans to exit the business via merger and acquisition. We have put structures and processes in place that will help us achieve our plan of successfully merging with one of the leading players in the finance and banking industry. With that, we can be rest assured that the business will be under the care of a safe and well-structured management team and board of trustees.

More on Financial Services

How to write a business plan for a fintech business?

Putting together a business plan for a fintech business can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing fintech business, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

In this guide:

Why write a business plan for a fintech business?

What information is needed to create a business plan for a fintech business.

• How do I build a financial forecast for a fintech business?

The written part of a fintech business business plan

• What tool should I use to write my fintech business business plan?

Understanding the document's scope and goals will help you easily grasp its structure and content. Before diving into the specifics of the plan, let's take a moment to explore the key reasons why having a fintech business business plan is so crucial.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for a fintech business is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your fintech business to be, you'll have to identify:

• what resources (human, equipment, and capital) are needed to get there,
• at what pace the business needs to progress to get there in time,
• and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To anticipate future cash flows

Regularly comparing your actual financial performance to the projections in the financial forecast of your fintech business's business plan gives you the ability to monitor your business's financial health and make necessary adjustments as needed.

This practice allows you to detect potential financial issues, such as unexpected cash shortfalls before they escalate into major problems. Giving you time to find additional financing or put in place corrective measures.

Additionally, it helps you identify growth opportunities, like excess cash flow that could be allocated to launch new products and services or expand into new markets.

Staying on track with these regular comparisons enables you to make well-informed decisions about the amount of financing your business might require, or the excess cash flow you can expect to generate from your main business activities.

To secure financing

A detailed business plan becomes a crucial tool when seeking financing from banks or investors for your fintech business.

Investing and lending to small businesses are very risky activities given how fragile they are. Therefore, financiers have to take extra precautions before putting their capital at risk.

At a minimum, financiers will want to ensure that you have a clear roadmap and a solid understanding of your future cash flows (like we just explained above). But they will also want to ensure that your business plan fits the risk/reward profile they seek.

This will off-course vary from bank to bank and investor to investor, but as a rule of thumb. Banks will want to see a conservative financial management style (low risk), and they will use the information in your business plan to assess your borrowing capacity — the level of debt they think your business can comfortably handle — and your ability to repay the loan. This evaluation will determine whether they'll provide credit to your fintech business and the terms of the agreement.

Whereas investors will carefully analyze your business plan to gauge the potential return on their investment. Their focus lies on evidence indicating your fintech business's potential for high growth, profitability, and consistent cash flow generation over time.

Now that you recognize the importance of creating a business plan for your fintech business, let's explore what information is required to create a compelling plan.

Writing a fintech business business plan requires research so that you can project sales, investments and cost accurately in your financial forecast.

In this section, we cover three key pieces of information you should gather before drafting your business plan!

Carrying out market research for a fintech business

As you consider writing your business plan for a fintech business, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your fintech business.

Your market research may reveal that customers may be looking for more personalized financial services, such as tailored advice or tailored investments. Additionally, your research may indicate that customers may be seeking out more digital and mobile-based services for their financial needs, such as apps to help track their finances or digital wallets.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your fintech business.

Developing the sales and marketing plan for a fintech business

As you embark on creating your fintech business business plan, it is crucial to budget sales and marketing expenses beforehand.

A well-defined sales and marketing plan should include precise projections of the actions required to acquire and retain customers. It will also outline the necessary workforce to execute these initiatives and the budget required for promotions, advertising, and other marketing efforts.

This approach ensures that the appropriate amount of resources is allocated to these activities, aligning with the sales and growth objectives outlined in your business plan.

The staffing and equipment needs of a fintech business

Whether you are at the beginning stages of your fintech business or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.

To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.

A fintech business might incur staffing costs such as salaries for software engineers, data scientists, and customer support staff. They might also need to purchase equipment such as computers, servers, software licenses, and other hardware or software related to development and operations.

To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.

Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your fintech business.

What goes into your fintech business's financial forecast?

The financial forecast of your fintech business will enable you to assess the profitability potential of your business in the coming years and how much capital is required to fund the actions planned in the business plan.

The four key outputs of a financial forecast for a fintech business are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's take a closer look at each of these.

The projected P&L statement

Your fintech business forecasted P&L statement enables the reader of your business plan to get an idea of how much revenue and profits your business is expected to make in the near future.

Ideally, your reader will want to see:

• Growth above the inflation level
• Expanding profit margins
• Positive net profit throughout the plan

Expectations for an established fintech business will of course be different than for a startup. Existing businesses which have reached their cruising altitude might have slower growth and higher margins than ventures just being started.

The projected balance sheet of your fintech business

Your fintech business's forecasted balance sheet enables the reader of your plan to assess your financial structure, working capital, and investment policy.

It is composed of three types of elements: assets, liabilities and equity:

• Assets: represent what the business owns and uses to produce cash flows. It includes resources such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: represent funds advanced to the business by lenders and other creditors. It includes items such as accounts payable (money owed to suppliers), taxes due and loans.
• Equity: is the combination of what has been invested by the business owners and the cumulative profits and losses generated by the business to date (which are called retained earnings). Equity is a proxy for the value of the owner's stake in the business.

Your fintech business's balance sheet will usually be analyzed in conjunction with the other financial statements included in your forecast.

Two key points of focus will be:

• Your fintech business's liquidity: does your business have sufficient cash and short-term assets to pay what it owes over the next 12 months?
• And its solvency: does your business have the capacity to repay its debt over the medium-term?

The cash flow forecast

A projected cash flow statement for a fintech business is used to show how much cash the business is generating or consuming.

The cash flow forecast is usually organized by nature to show three key metrics:

• The operating cash flow: do the core business activities generate or consume cash?
• The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
• The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?

As we discussed earlier, cash is king and keeping an eye on future cash flows an imperative for running a successful business. Therefore, you can expect the reader of your fintech business business plan to pay close attention to your cash flow forecast.

Also, note that it is customary to provide both yearly and monthly cash flow forecasts in a business plan - so that the reader can analyze seasonal variation and ensure the fintech business is appropriately funded.

The initial financing plan

The initial financing plan - also called a sources and uses table - is an important tool when starting a fintech business.

It shows where the money needed to set up the business will come from (sources) and how it will be allocated (uses).

Having this table helps understand what costs are involved in setting up the fintech business, how the risks are distributed between the shareholders and the lenders, and what will be the starting cash position (which needs to be sufficient to sustain operations until the business breaks even).

Now that the financial forecast of a fintech business business plan is understood, let's focus on what goes into the written part of the plan.

The written part of a fintech business business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.

Let's go through the content of each section in more detail!

1. The executive summary

The first section of your fintech business's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.

When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.

Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.

Then you should follow with an overview of the addressable market for your fintech business, current trends, and potential growth opportunities.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Finally, you should detail any funding requirements in the ask section.

2. The presentation of the company

As you build your fintech business business plan, the second section deserves attention as it delves into the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide valuable insights into the legal structure of the business, the identities of the owners, and their respective investments and ownership stakes. This level of transparency is vital, particularly if you're seeking financing, as it clarifies which legal entity will receive the funds and who holds the reins of the business.

Moving to the location part, you'll offer a comprehensive view of the company's premises and articulate why this specific location is strategic for the business, emphasizing factors like catchment area, accessibility, and nearby amenities.

When describing the location of your fintech business, you could mention its access to a modern infrastructure with reliable internet and power supply. You may also talk about the potential access to a large, diverse talent pool that could help you grow your business. Additionally, you could highlight the potential for a supportive local business climate and any incentives or tax benefits that may be available. Finally, you might emphasize the potential for customers in the area who could benefit from the services or products you offer.

Lastly, you should introduce your esteemed management team. Provide a thorough explanation of each member's role, background, and extensive experience.

It's equally important to highlight any past successes the management team has achieved and underscore the duration they've been working together. This information will instil trust in potential lenders or investors, showcasing the strength and expertise of your leadership team and their ability to deliver the business plan.

3. The products and services section

The products and services section of your fintech business business plan should include a detailed description of what your company sells to its customers. 

For example, your fintech business could offer customers financial planning services to help them budget, save, and plan for their retirement. It could provide payment processing solutions that allow customers to make payments online or through a mobile app. Finally, it could offer loan origination services to help customers access funds quickly and easily. These services would enable customers to access the financial assistance they need to achieve their goals, while also providing convenience and ease of use.

The reader will want to understand what makes your fintech business unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When outlining your market analysis in the fintech business business plan, it's essential to include comprehensive details about customers' demographics and segmentation, target market, competition, barriers to entry, and relevant regulations.

The primary aim of this section is to give the reader an understanding of the market size and appeal while demonstrating your expertise in the industry.

To begin, delve into the demographics and segmentation subsection, providing an overview of the addressable market for your fintech business, key marketplace trends, and introducing various customer segments and their preferences in terms of purchasing habits and budgets.

Next, shift your focus to the target market subsection, where you can zoom in on the specific customer segments your fintech business targets. Explain how your products and services are tailored to meet the unique needs of these customers.

For example, your target market might include millennials who are tech-savvy and financially savvy. They may have already invested in the stock market and are looking for a way to make their investments more efficient. They may also be looking for a way to manage their finances more efficiently and to keep track of their credit score.

In the competition subsection, introduce your main competitors and explain what sets your fintech business apart from them.

Finally, round off your market analysis by providing an overview of the main regulations that apply to your fintech business.

5. The strategy section

When writing the strategy section of a business plan for your fintech business, it is essential to include information about your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

The competitive edge subsection should explain what sets your company apart from its competitors. This part is especially key if you are writing the business plan of a startup, as you have to make a name for yourself in the marketplace against established players.

The pricing strategy subsection should demonstrate how you intend to remain profitable while still offering competitive prices to your customers.

The sales & marketing plan should outline how you intend to reach out and acquire new customers, as well as retain existing ones with loyalty programs or special offers. 

The milestones subsection should outline what your company has achieved to date, and its main objectives for the years to come - along with dates so that everyone involved has clear expectations of when progress can be expected.

The risks and mitigants subsection should list the main risks that jeopardize the execution of your plan and explain what measures you have taken to minimize these. This is essential in order for investors or lenders to feel secure in investing in your venture.

Your fintech business could face the risk of a data breach. Hackers may try to access customer data stored on your servers, which could lead to a loss of customer trust and a resulting drop in your customer base. Additionally, your fintech business could experience a liquidity crisis. If the market experiences a downturn, you may not have enough cash on hand to cover your liabilities, leading to a cash flow problem.

6. The operations section

The operations of your fintech business must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your fintech business - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You may have key assets such as customer data and proprietary software. Customer data could include customer financial information, account details, payment history, and even customer preferences. Proprietary software could include a custom-built platform for customers to view their financial data, manage financial products, or transfer money. Additionally, a fintech business might have intellectual property such as patents, trademarks, copyright, or trade secrets. Patents could cover processes, algorithms, or inventions used to provide financial services, while trademarks could identify a brand. Copyright could protect the software code, while trade secrets could protect confidential business information.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of the content of a fintech business business plan, let's look at some of the tools you can use to create yours.

What tool should I use to write my fintech business's business plan?

There are two main ways of creating your fintech business business plan:

• Using specialized business planning software,
• Hiring a business plan writer.

Using an online business plan software for your fintech business's business plan

The modern and most efficient way to write a fintech business business plan is to use business plan software .

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your fintech business's business plan

Outsourcing your fintech business business plan to a business plan writer can also be a viable option.

Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.

However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.

From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).

You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.

The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.

For these reasons, outsourcing the fintech business business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.

Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.

Why not create your fintech business's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a fintech business business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my fintech business business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating a fintech business business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• Having an up-to-date business plan is key to maintaining visibility on your future cash flows.
• A business plan has 2 parts: a financial forecast highlighting the expected growth, profitability and cash generation of the business; and a written part which provides the context needed to interpret and assess the quality of the forecast.
• Using business plan software is the modern way of writing and maintaining business plans.

We hope that this guide helped you to better understand how to write the business plan for a fintech business. If you still have questions, do not hesitate to contact us.

Also on The Business Plan Shop

• How to write a 5 years business plan
• Business plan myths

Know someone who owns or wants to start a fintech business? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How to write a business plan for your fintech company.

Starting a fintech company is a great idea because it can provide innovative solutions to financial services and create new opportunities for people to access and manage their money.

Additionally, it can help to reduce costs and increase efficiency for both customers and financial institutions.

But, first thing first, you need a business plan.

A business plan is essential before starting a new project, especially a fintech company. It provides an organized plan of action and sets out the goals, objectives, strategies, and financial projections of the business. By creating a business plan, it will help to ensure that the project is well-prepared and on track to success.

In short, a thorough business plan will help make sure your fintech company is profitable .

What information should you put into the business plan of a fintech company? What should be the overall layout? What are the essential financial measures to include? How can I write a business plan quickly and effectively without sacrificing quality?

Luck is on your side! This article provides answers to all these questions, leaving no stone unturned!

One last thing: it's up to you whether to start your business plan from scratch.

You can download our comprehensive business plan for a fintech company and tailor it to suit your requirements.

Elaborating a business plan for a fintech company

Is it worthwhile to invest time in a business plan for your fintech company.

Yes, you should invest time in creating a business plan for your fintech company in order to ensure its success.

Building a solid business plan will allow you to:

• learn about the fintech market
• be knowledgeable about the industry's latest trends
• narrow down what makes a fintech company profitable
• understand the financial needs, technology preferences, and user experience expectations of customers
• come up with a winning value proposition for your financial technology firm
• study the competitive landscape
• find competitive advantages for your fintech company
• find a business model that will lead you to profitability
• execute a well-structured and strategic action plan
• evaluate risks associated with running a fintech company, including data security, regulatory compliance, and financial market volatility

Our team has created a business plan for a fintech company that is designed to make it easier for you to achieve all the elements listed.

How to organize a business plan for a fintech company?

Your business plan incorporates a variety of useful numbers and data. It must be well structured, to make easy to read and digest.

When we designed our business plan for a fintech company , we ensured it was organized correctly.

We've categorized it into 5 sections (Opportunity, Project, Market Research, Strategy and Finances).

1. Market Opportunity

The section at the beginning is called "Market Opportunity."

This section presents a comprehensive report on the fintech company, including key data and metrics to guide your decision-making process in the financial technology sector.

Twice annually, we review and update this section to maintain data accuracy.

2. Project Presentation

In the "Project" section, you can describe your fintech company, including the financial services or solutions you provide (e.g., online payments, personal finance management, investment platforms), technological innovation, data security measures, partnerships, and the unique value proposition that simplifies and enhances financial transactions for individuals and businesses.

Include a brief introduction about yourself at the end of this section.

Explain your background in finance and technology, your knowledge of the fintech industry, and why you are well-positioned to start a fintech company. Highlight your experience in developing innovative financial solutions, your understanding of regulatory compliance, and your commitment to leveraging technology to revolutionize the financial services sector.

We've provided you with language that you can modify to fit your concept just right.

3. Market Research

Then, we reach the "Market Research" section.

The purpose of this section is to introduce the market segments for your fintech company.

It includes a competition study, outlining other fintech companies in the industry. Your company's unique financial technology solutions and competitive advantages are also highlighted. A customized SWOT analysis is included.

4. Strategy

Within the "Strategy" section, a 3-year development plan is outlined, specifying the necessary initiatives to make your fintech company highly profitable.

Moreover, you will find a marketing strategy, a risk management approach, and a Business Model Canvas specifically designed for a fintech company in this section.

5. Finances

In the end, the section labeled "Finances" allows you to demonstrate the financial details and figures of your project.

How to elaborate the Executive Summary for a fintech company?

The Executive Summary gives a concise preview of the business plan of your fintech company.

Don't exceed 2 pages; prioritize the most essential elements in your document.

The aim of this document is to make the reader curious about your business plan.

In the Executive Summary of your fintech company, provide answers to these questions: what specific financial technology solutions does your company provide? who is your target audience? who are your competitors in the fintech sector? how do you differentiate from them? what is your budget?

How to do the market analysis for a fintech company?

Analyzing the market for your fintech company allows you to gain insights into factors such as customer needs for financial technology, competition within the fintech industry, and emerging trends in financial services.

By conducting a thorough market analysis, a fintech company can identify customer needs, develop innovative financial solutions, optimize pricing strategies, and execute targeted marketing campaigns, ultimately leading to increased user adoption, customer satisfaction, and a prominent position in the financial technology industry.

This is what we've outlined in the "Market Research" section of our business plan for a fintech company :

• interesting data points and market insights about fintech companies, including financial technology adoption, fintech funding, and industry regulations
• a list of potential audiences for a fintech company
• the competitor study
• the potential competitive advantages for a fintech company

The key points of the business plan for a fintech company

What's the business model of a fintech company, business model of a fintech company.

A fintech company's business model centers around leveraging technology to provide innovative financial services or solutions to individuals or businesses. Revenue is generated through service fees, transaction fees, or licensing agreements.

The business model focuses on developing cutting-edge financial technology, providing secure and user-friendly platforms, effective marketing to target customers in need of fintech solutions, and building strong customer relationships based on trust and financial expertise.

Success depends on technological innovation, regulatory compliance, delivering seamless user experiences, fostering partnerships with financial institutions or fintech partners, and continuously adapting to changing customer needs and industry trends in the financial technology sector.

Business model vs Business plan

Please don't mix up the terms "business plan" and "business model."

A business model defines how a company creates, delivers, and monetizes its offerings.

In a business plan, you incorporate the Business Model Canvas as a clear-cut method to outline how your business generates value.

And, of course, there is a Business Model Canvas (already completed) in our business plan for a fintech company .

How do you identify the market segments of a fintech company?

Segmenting the market for your fintech company involves dividing your potential customers into different groups based on their financial needs, demographics, and preferences.

These categories may include factors such as personal finance management, investment services, small business banking, or customers seeking specific financial technology solutions (e.g., mobile payment apps, peer-to-peer lending).

By segmenting your market, you can offer a range of fintech products and services that cater to each segment's specific requirements. For example, you might provide personal finance apps and tools for individuals seeking better money management, offer investment platforms and advisory services for investors, focus on providing digital banking solutions for small businesses, or develop innovative financial technology solutions that address specific customer pain points.

Market segmentation allows you to effectively target your marketing efforts, communicate your value proposition, and deliver personalized financial solutions that meet the unique needs and preferences of each customer segment.

In the business plan for a fintech company , you will get a detailed market segmentation, helping you understand your target audiences and their needs.

How to conduct a competitor analysis for a fintech company?

It's evident that you won't be the only fintech company in the market. There are other innovative companies offering financial technology solutions to businesses and individuals.

It is vital to study your competitors' strengths and weaknesses in detail when constructing your business plan.

Pay attention to their weaknesses (such as outdated technology platforms, inadequate data security measures, or poor user experience).

Why is it important to address these aspects? Because these weaknesses can impact the success of fintech companies.

By focusing on these areas, you can offer innovative financial technology solutions, provide secure and user-friendly platforms, and deliver excellent customer support, positioning your fintech company as a trusted and reliable provider of financial services and technology.

It's what we call competitive advantages—prioritize building them to stand out in the market.

Here are some examples of competitive advantages for a fintech company: innovative financial technology solutions, user-friendly and secure platforms, efficient payment and transaction systems, personalized financial services, data privacy and protection, strong partnerships with financial institutions, positive user feedback and ratings.

How to draft a SWOT analysis for a financial technology company?

A SWOT analysis can help identify potential opportunities and risks that should be considered when starting a fintech company.

As you can guess, there is indeed a completed and editable SWOT matrix in our business plan for a fintech company

The strengths for a fintech company

When we talk about the "S" in SWOT, we mean Strengths, which are the project's internal capabilities or unique strengths.

For a fintech company, possible strengths include strong technical infrastructure, innovative product offerings, customer service excellence, and a secure payment system.

The weaknesses for a fintech company

When we use the "W," we're talking about Weaknesses, which are the areas or aspects of the project that could use some improvement.

In the case of a fintech company, potential weaknesses could include limited access to funding, inadequate cybersecurity measures, and lack of regulatory compliance knowledge.

The opportunities for a fintech company

The letter "O" in SWOT represents Opportunities, indicating the external prospects or chances for the project's advancement.

In the case of a fintech company, potential opportunities include offering online payment solutions, providing financial services to the unbanked, developing mobile banking applications, and leveraging artificial intelligence for financial forecasting.

The threats for a fintech company

The "T" in SWOT symbolizes Threats, indicating the potential risks or unfavorable factors that the project should be prepared for.

How to elaborate a marketing strategy for a financial technology company?

A marketing strategy is a key ingredient of a business plan as it articulates how a business will attract customers and yield financial gains.

An effective marketing plan will enable your fintech company to connect with individuals and businesses in need of innovative financial technology solutions.

Investors won't trust your fintech company without effective marketing; emphasizing your innovative solutions and secure financial services is crucial.

Have you explored marketing approaches to attract clients to your fintech company? Consider showcasing your technology solutions at industry conferences or trade shows, partnering with financial institutions for referrals, and offering informative content about financial innovations through digital channels.

Don't stress if you're unfamiliar with marketing and communication – it's perfectly fine.

How to build a solid financial plan for a financial technology company?

A comprehensive business plan requires a thorough analysis of financial data to ensure its success.

As you outline your business plan, you should include revenue projections for your fintech company.

The revenue forecast should be straightforward and easily interpretable.

Our financial plan for a fintech company is straightforward and equipped with automated checks, enabling you to validate and adjust your assumptions easily. This way, we make sure you're building solid financial projections.

Without a doubt, you'll need to come up with a basic budget for starting your fintech company. Don't forget any expense (we have listed them all in our financial plan !).

The break-even analysis is an essential component of your financial plan, as it provides an indication of whether your fintech company will be profitable or not.

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How To Write a Business Plan for Fintech in 9 Steps: Checklist

By alex ryzhkov, resources on fintech.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan

According to Statista , the global fintech market is expected to reach a value of USD 309.98 billion by 2022, growing at a CAGR of 24.8% between 2018 and 2022.

If you're planning to start a fintech business, a well-crafted business plan is essential to help you navigate the complex industry landscape. Here's a nine-step checklist to help you write a winning business plan for your retail banking mobile app.

• Conduct market research and analyze industry trends
• Identify target market and potential customers
• Evaluate competition and determine unique value proposition
• Develop a clear business model and revenue streams
• Determine necessary funding and create financial projections
• Identify key team members and talent acquisition strategy
• Research legal and regulatory requirements
• Define marketing and sales strategies
• Create a roadmap of milestones and goals for the business plan

Conduct Market Research And Analyze Industry Trends

Before building a business plan for your fintech mobile app, you should conduct thorough market research and analyze industry trends. This will help you understand the target market, customer needs and preferences, competitive landscape, and opportunities for growth.

Market research involves collecting and analyzing data about the market, including size, growth potential, segmentation, and trends. This information will help you determine the demand for your product, the competition, and the pricing strategy.

• Use online surveys and focus groups to gather data from potential customers.
• Conduct secondary research using industry reports, government statistics, and trade associations.
• Analyze trends in technology, social media, and consumer behavior to stay ahead of the competition.

Industry trends refer to the broader developments impacting the fintech industry, such as regulatory changes, technological innovations, and new consumer preferences. Keeping abreast of these trends will help you identify opportunities and challenges for your business, as well as stay ahead of the competition.

• Subscribe to industry publications and attend relevant conferences and seminars to stay informed.
• Monitor regulatory changes and stay compliant with relevant laws and regulations such as GDPR, PSD2, and data protection laws by performing KYC and AML checks on your customer.
• Watch out for emerging technologies such as AI, blockchain, and open banking, and explore their potential for your business.

Overall, conducting market research and analyzing industry trends is a crucial step in building a successful business plan for your fintech mobile app. It will help you identify opportunities and challenges, develop a clear value proposition, and make informed decisions about your target market, business model, and marketing strategy.

Identify Target Market And Potential Customers

Creating a mobile app for retail banking is a great business idea. However, it is essential to identify who your target market is and who your potential customers are before launching the app. Understanding your target market and potential customers are crucial steps towards building a successful fintech business.

Define Your Target Market

Defining your target market involves identifying a specific group of people who are most likely to use your app. Your target market should be well-defined, and your marketing strategies should align with this group’s preferences. Some factors you need to consider include age, gender, occupation, income, and location. Conduct research to determine the needs and preferences of your target market to build an app that meets their needs.

Identify Your Potential Customers

After defining your target market, you need to identify your potential customers. These are people who are most likely to download and use your app. Consider the characteristics of your target market to identify potential customers. For example, if your target market is college students, your potential customers might be those who use mobile apps for budgeting, or those who prefer to make digital transactions.

• Create customer personas to better understand your target market and potential customers.
• Use social media platforms like Facebook, Twitter and LinkedIn to find out where your potential customers spend their time online.
• Conduct surveys and focus group studies to gather more information about your target market and potential customers.

Research Your Competition

Knowing your competition can help you understand their target market and potential customers. Analyze their marketing strategies, pricing models, and the features of their apps. This information can help you identify gaps in the market and areas where you can improve your app’s features.

In conclusion, identifying your target market and potential customers is an essential step in building a successful fintech business. Once you have defined your target market and identified your potential customers, you can create marketing campaigns that appeal to them specifically, ultimately driving engagement and growth for your business.

Evaluate Competition And Determine Unique Value Proposition

One major aspect of creating a successful business plan for fintech is identifying your competition and determining your unique value proposition. With so many options available in the market, it’s crucial to differentiate your app from others and offer something that customers can’t find anywhere else. This step requires thorough research and analysis of what other industry players are offering and what your target market wants.

When evaluating your competition, concentrate on the following aspects:

• Product Offering: Analyze what your competitors are offering – what products and features do they have in their app? What benefits do they provide?
• Pricing: Look at the pricing structure of your competitors. Determine how much they charge for their products and services.
• Marketing Strategies: Evaluate how your competition promotes their products to customers. How are they differentiating themselves in their marketing materials?
• User Experience: Look at their app and use it yourself. Determine what you like and dislike, what works and doesn't, and what you can do differently to improve the overall user experience.

Some tips to consider:

• Don't limit yourself to direct competitors. Look at indirect competitors who might offer similar features or benefits to your app.
• Know your target market and what they want. Different demographics will have different needs and preferences in financial apps.
• Focus on your unique selling proposition – the one aspect of your app that sets it apart from the competition. Highlight this in your marketing materials and messaging.

After evaluating your competition, determine your unique value proposition – the one thing that makes your app better than the competition. It can be the combination of features, pricing, or marketing strategies that sets you apart. Your unique value proposition should be a short, compelling statement that tells customers why your app is better than others. This statement should be included in your pitch deck and throughout your marketing campaigns.

Creating a unique value proposition can be a challenging process, but it’s a crucial step in creating a successful fintech business plan. By doing thorough research and analysis, you'll be able to differentiate yourself from the competition and provide customers with something they can't find anywhere else.

Develop A Clear Business Model And Revenue Streams

Creating a business model and identifying revenue streams is an essential part of any successful fintech business and requires careful consideration. Here are some key steps to help you develop a clear business model and revenue streams:

• Identify your target market: Understanding your target market is critical to the success of your business. Determine who your ideal customer is, their pain points, and how your mobile app can solve their problems and meet their needs.
• Determine your pricing strategy: Determine how you will charge customers for your services and determine a pricing structure that is competitive and profitable for your business. Consider if you will charge a subscription fee, transaction fees, or a combination of both.
• Assess your revenue streams: Identify all the opportunities for revenue generation for your business. Determine how you will optimize revenue through cross-selling, upselling, referral programs, and partnerships, among other options.
• Develop a cost structure: It is important to understand the cost structure of your business, including expenses associated with development, marketing, customer acquisition, and operations. Determine how you will balance revenue and expenses to ensure profitability.
• Identify key metrics: Identify the key metrics that you will use to measure the success of your business. These metrics might include monthly recurring revenue, customer acquisition cost, lifetime value, and churn rate.
• Consider offering a free trial or introductory offer to attract new customers and encourage them to try your mobile app.
• Explore partnerships with complementary businesses or financial service providers to expand your reach and offer additional services to your customers.
• Continuously monitor and adjust your pricing and revenue model to ensure that it remains competitive and profitable in the market.

Developing a clear business model and revenue streams is critical to the success of any fintech business, especially in the crowded mobile banking market. It is important to carefully evaluate your target market, pricing strategy, and revenue streams to maximize revenue and ensure long-term profitability.

Determine Necessary Funding And Create Financial Projections

Once you have identified your target market, competition, and unique value proposition, it's time to determine the funding necessary to bring your mobile app for retail banking to life. Creating a solid financial projection is critical to secure investment from stakeholders and lenders. A comprehensive financial projection will provide estimates of revenue, expenses, and profits for a specific period, typically over three to five years.

• Be realistic with your projections. Your financial projections are your promise to investors and stakeholders. Overstating your potential financial returns could backfire and demotivate potential investors.
• Consider the potential costs and expenses. Don't just focus on projected revenue. Consider all the possible expenses you might incur in your business operations, including personnel, overhead costs, marketing, and legal fees.
• Adapt your financial model to changes in economic conditions and industry trends. Be flexible in updating your business plan to reflect any changes in market conditions to mitigate any potential financial risks.

To create your financial projections, start by estimating your startup costs, such as legal fees, equipment, and marketing expenses, and divide these expenses over a three to five-year period. Identify your revenue streams, determining how you will generate revenue from your mobile app and projected growth over time.

Consider creating a revenue model based on user acquisition, including advertising, in-app purchases, and subscription-based fees. It may take time to acquire new users, so, when estimating your revenue, project a realistic timeline, factoring in your competitors and their market position.

Next, project your costs and expenses. Determine how many employees you will need and forecast their salaries and benefits. Determine the costs of running your mobile app, including development and maintenance costs. Be sure to factor in any costs for integrating with other financial service providers and any referral bonuses you plan to offer.

Once you have estimated your revenue streams and costs, it's time to calculate your profits. Subtract your expenses from your total revenue, and then project your profit over the next three to five years. This part of the financial projection is critical to securing investment from potential stakeholders and lenders, so be sure to show a clear path to profitability.

Remember that your financial projections are dynamic and should be updated regularly to reflect changes in market conditions, shifts in consumer behavior, and growth results over time. A comprehensive financial projection is a critical part of your business plan as it provides a roadmap to investors, potential stakeholders, employees, and partners on how you plan to grow your mobile app for retail banking.

Identify Key Team Members And Talent Acquisition Strategy

One of the most crucial aspects of building a successful business is identifying the right team members to help bring your vision to life. In the case of a fintech startup, it's essential to find individuals who have the necessary technical skills and experience in the financial industry. Therefore, identifying key team members and creating a talent acquisition strategy should be a top priority.

Identifying the right team members:

• Look for individuals with relevant experience: When hiring for a fintech startup, it's essential to find individuals who have experience in the financial sector. Look for candidates who have knowledge of financial regulations, compliance, and security protocols that are crucial in the industry.
• Look for technical expertise: In addition to financial knowledge, it's also essential to look for individuals with technical expertise. Look for individuals who are proficient in programming languages used in fintech such as Java, Python, and Ruby.
• Cultural fit: It's essential to find individuals who share the startup's vision and values. Cultural fit is just as crucial as technical expertise and relevant experience.
• Work with a recruiting agency or a consultant who specializes in fintech hiring to find the right candidates.
• Network at industry events or meetups to find potential candidates with the right experience and skills.
• Consider hiring interns or offering apprenticeships to train individuals in-house.

Talent acquisition strategy:

• Define job roles and responsibilities: Define what roles and responsibilities are necessary for the business and the skills required for each position. It will help create clear job descriptions and find the right candidates.
• Create a compensation and benefits package: Offer competitive compensation and benefits packages to attract top talent. Consider offering equity options or flexible work arrangements as a part of the benefits package.
• Promote the startup's vision: Promote the startup's vision and values to attract candidates who share the same vision and values.
• Use job boards such as LinkedIn, Indeed, or Glassdoor to post job openings.
• Use social media platforms such as Facebook, Twitter, or LinkedIn to promote job openings and attract candidates.
• Offer referral bonuses to employees who recommend qualified candidates for the job openings.

Identifying key team members and creating a talent acquisition strategy is a crucial step in building a successful fintech startup. Finding individuals with the right skills and experience and creating a culture that promotes the startup's vision and values will help drive success and growth.

Research Legal And Regulatory Requirements

Before launching a fintech business, it's crucial to research and understand the legal and regulatory requirements in the industry. A thorough understanding of these requirements is necessary to ensure that the business is compliant with the law and to avoid legal issues in the long run.

Below are some essential regulatory requirements for a fintech mobile app:

• The app must comply with data protection and privacy regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA).
• The app must comply with anti-money laundering (AML) regulations to prevent money laundering and terrorist financing activities.
• The app must comply with know-your-customer (KYC) regulations to verify the identity of its customers and ensure that they are not engaged in fraudulent activities.
• The app must adhere to banking licenses and regulatory compliance, based on the country or region that it operates in.
• Consult with a lawyer specialized in fintech and payments regulation to guide you on legal matters.
• Stay up-to-date with regulatory updates and changes to prevent regulatory non-compliance and potential penalties.
• Understand the legal implications of partnering with other financial service providers and regulators.

It's important to keep in mind that regulations and compliance requirements vary depending on the country and region of operation. Therefore, it's essential to research and understand the legal and regulatory requirements specific to the location where the fintech business will operate.

Being compliant with legal and regulatory requirements not only keeps the business in good standing with regulators and financial service providers but also builds customer trust and confidence in the fintech brand.

Define Marketing And Sales Strategies

Now that you've developed a clear business model and identified your target customers, it's time to develop your marketing and sales strategies. These strategies will define how you will attract and retain customers, and ultimately drive revenue for your business.

Identify Your Unique Selling Proposition (USP)

Before creating your marketing and sales strategies, it's important to identify your unique selling proposition (USP). Your USP is what sets you apart from your competitors and gives customers a reason to choose your mobile app for retail banking over others in the market. Once you've identified your USP, you should tailor your marketing and sales strategies to highlight it so that potential customers can easily understand the value of your offering.

• Consider conducting customer surveys or focus groups to gain a better understanding of what customers are looking for in a mobile app for retail banking.
• Create a catchy slogan that captures the essence of your offering and resonates with your target customers.

Digital Marketing Strategies

In today's digital age, it's important to leverage digital marketing strategies to reach your target customers and drive brand awareness. These strategies include search engine optimization (SEO), content marketing, social media marketing, email marketing, and pay-per-click (PPC) advertising. You should define which channels are most relevant to your target customers and develop a plan for how you will leverage them to attract and engage potential customers.

• Consider partnering with social media influencers to promote your mobile app for retail banking to their followers.
• Develop a blog that provides personal finance tips and leverages keywords related to your offering to improve SEO.

Offline Marketing Strategies

While digital marketing strategies are important, offline marketing strategies can also be effective in driving brand awareness and attracting customers. These strategies include events and sponsorships, print advertising, direct mail, and networking. You should determine which offline marketing strategies are most relevant to your target customers and develop a plan for how you will leverage them to attract and engage potential customers.

• Partner with local businesses to offer discounts or bonuses to their customers who use your mobile app for retail banking.
• Participate in personal finance events or conferences to network with potential customers and demonstrate the value of your offering.

Sales Strategies

Once you've attracted potential customers, it's important to have a sales strategy in place to convert them into paying customers. Your sales strategy should define how you will convert leads into customers and drive revenue for your business. This may include offering a free trial, providing demos of your mobile app for retail banking, or providing incentives for customers to refer others to your business.

• Consider offering a referral program that provides discounts or incentives to customers who refer others to your mobile app for retail banking.
• Ensure that your mobile app for retail banking has a user-friendly interface and offers excellent customer support to increase customer satisfaction and retention.

Create A Roadmap Of Milestones And Goals For The Business Plan.

A roadmap of milestones and goals is crucial for tracking the progress of your business plan and ensuring that you are on track to achieving your objectives. Developing a clear roadmap will also help you identify potential challenges and take proactive measures to address them.

The following are some tips to help you create a roadmap of milestones and goals for your fintech business:

• Begin by breaking down your business plan into smaller, more manageable segments.
• List the key tasks and deliverables required for each segment.
• Assign clear timelines and responsible team members for each task and deliverable.

Once you have broken down your business plan into smaller segments, you can create a timeline of milestones and goals that align with your overall business plan objectives. This timeline should outline the key deliverables and tasks that you need to achieve within specific timelines.

It is important to regularly review your roadmap and adjust it as necessary to ensure that it remains realistic and aligned with the needs of your business. Regular reviewing helps you assess your progress and make necessary adjustments.

• Include clear and measurable objectives in your roadmap of milestones and goals.
• Ensure that your objectives align with your overall business plan.
• Set target dates for achieving each of your objectives and regularly review and revise them.

Your roadmap of milestones and goals should not only outline the objectives that you hope to achieve but also include specific metrics that allow you to measure progress against those objectives. Ensure that you are clear regarding the metrics that you will use to measure your progress and adjust them if necessary.

In conclusion, a roadmap of milestones and goals is a critical component of the business plan for your fintech startup. By following the tips and best practices outlined above, you can develop a roadmap that helps you track your progress, achieve your objectives and overcome potential challenges along the way.

In conclusion, creating a business plan for a fintech startup, like a mobile banking app, requires careful consideration and planning. By following the 9 steps checklist outlined above, you can ensure that your business plan is thorough and well-developed. with a clear understanding of the market, competition, business model, funding needs, and regulatory requirements, you can establish a solid foundation for your fintech startup to succeed.

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Fintech Business Plan

165.00 $ 34.00 $

✅ Complete and 100% customizable business plan

✅ PowerPoint format convertible to Word and PDF

✅ Contains an Excel Financial Forecast

✅ Ideal for a financing request

✅ Updates on 2024 market trends

✅ Customer support available in less than 24 hours

• Description

Fintech Business Plan : A complete and customizable tool.

OPINIONS OF CONTRACTORS

4.8 ★ ★ ★ ★ ★ / 183 Reviews from entrepreneurs

What does the Fintech Business Plan Template contain?

A complete business plan of more than 40 pages.

This “ Fintech Business Plan ” model, comprising more than 40 pages, was developed with the supervision of banking advisors, accountants and a professional in the sector.

It covers the essential elements for an effective presentation of your project.

You can easily personalize this template to make it unique to your business.

In this Business Plan template you will find the following elements: – A description of the market dynamics – Future industry trends – The 8 key success factors – A project presentation template – 4 unique value propositions – Presentation of project leaders – The main segments of your market – A SWOT analysis – A study of the competitive environment – The competitive advantages to be exploited – An action plan over a period of 3 years – A Business Model Canvas – The marketing strategy to attract customers – A marketing acquisition strategy in 5 steps – A risk management policy – A summary of the strong points of your project – Financial forecast tables

No prior knowledge is required.

Customize your financial forecasts in seconds with our Excel file

Our automatable Excel file is designed to allow you to customize your financial forecasts in seconds. It has built-in formulas that simplify the process of creating your financial projections.

In this file, you will find all the essential financial tables and indicators for a financing request: – Initial financing plan – Table of fixed assets – Amortization of loans – Forecast turnover – Working capital requirement – Forecast income statement – Forecast cash flow plan – Forecast balance sheet – Break-even threshold – 3-year financing plan

Thanks to our model, you will be able to present a solid financial analysis to your banker or your investors.

A hundred additional icons allowing you to personalize your Business Plan endlessly

At the end of your Business Plan, you will find 3 pages of additional icons and photos which will allow you to very easily personalize your presentation. The Business Plan template can be modified with Microsoft Powerpoint, Keynote or even Google Slides (then optionally exported to PDF format). You can also personalize your presentation by adding your logo, your own photos, the name of your main competitors, additional data concerning your local market, etc. But you can also just modify the text.

Why invest in a Business Plan ?

Yes, acquiring the fintech business plan model is an investment, it is not a burden., so if you want to create this project and you are looking for bank or investor financing for your project.

You will need a compelling and professional business plan template that highlights your innovative ideas and growth potential.

With the Fintech Business Plan model, you have in hand a complete and customizable tool that will allow you to make your dreams come true.

• Clarify your vision and objectives with our comprehensive and customizable business plan template.
• Evaluate the feasibility of your project and structure your entrepreneurial approach.
• Attract investors and partners with a neat and impactful visual presentation.
• Plan your resources and expenses, anticipate risks and opportunities, and measure your progress.
• Simplify administrative procedures and optimize your chances of success.
• Save considerable time and easily customize your business plan.
• Benefit from personalized support from experts and regular, free updates.

– Fintech Business Plan –

Comparison table: traditional business plan vs. businessconceptor.

By opting for our model: ” Fintech   Business Plan “ , you save precious time. Additionally, our template is designed to be easily customizable and tailored to this industry.

Fintech Business Plan:

To whom it is addressed , how did we obtain this rating, do you have a question , a special request, who are we .

Our team, made up of analysts, researchers and passionate financiers, has been collaborating for more than 20 years with consulting firms and accountants to write quality business plans.

We have studied numerous market and industry studies , connecting with market leaders to better understand your industry.

With over 5,000 personalized business plans , we realized we could offer a higher quality and more affordable solution: documents ready to be completed .

Today, our platform offers several templates for different activities, but our work doesn’t stop there!

Every day, we are at your side to answer your questions, advise you and correct your business plans free of charge. We will always be present, at your side, with unwavering support and a committed heart. ❤️ A question? [email protected]

If you have a question that we’ve already answered   :

What does this business plan consist of.

Our Business Plan is a complete document of more than 40 pages designed to effectively present your business project. It covers all the essential aspects like market analysis, business strategy, financial forecasting, etc.

Is the Business Plan modifiable?

Yes, the Business Plan is fully editable. You can customize each section to your specific needs and make your plan unique.

I don’t know how to use Powerpoint.

No problem ! After your order, contact us by email to specify which word processing software you prefer (eg Microsoft Word, Google Docs, etc.), we will adapt it for you.

Can an expert help me modify the Business Plan?

Yes, if you need help in editing the Business Plan, you can hire a business plan writing expert. They will be able to guide you and provide you with personalized advice.

What happens after payment?

After payment, you will be able to download the Business Plan immediately. This way you can start working on it without delay.

Can you add your personal photos?

Yes, you can personalize the Business Plan by adding your own photos or images to make it even more suitable for your project.

Can I present this Business Plan to a bank?

Absolutely ! Our Business Plan is designed to be used when requesting financing from banks, investors or other potential partners.

Is the data updated?

Yes, our data is regularly updated to reflect the latest market trends and best business practices.

My project is not in France, is it compatible?

Yes, our Business Plan is designed to be adapted to different countries and industries. You can customize the relevant sections according to your country and your specific needs.

Can I use the Business Plan for multiple projects?

Yes, you can use the Business Plan for different projects. Simply customize it to the specific details of each project.

How can I contact support if I have a problem?

If you need assistance, you can contact us via [email protected] , Our support team will be happy to help you within 24 hours.

Is the Business Plan suitable for startups?

Yes, our Business Plan is suitable for startups. It contains specific sections to describe your business model, value proposition and growth strategy.

What is the difference between the model and a tailor-made Business Plan?

Our Business Plan template is a solid foundation that you can customize according to your needs. A tailor-made Business Plan is entirely written for your project, taking into account your specific specifications and objectives.

Does the Business Plan contain legal advice?

Our Business Plan provides general information, but it does not constitute legal advice. It is recommended to consult an attorney or legal expert for specific questions related to your business.

Can I export financial data to other software?

Yes, you can export Excel financial data to other software to perform more detailed analysis or create additional charts.

Is the Business Plan template suitable for an existing business?

Yes, the Business Plan template is also suitable for existing businesses who want to review or update their current business plan. You can customize the relevant sections to suit your situation.

Can I add additional graphics?

Yes, you can add additional graphics to the Business Plan to illustrate your financial data, growth projections or other information relevant to your project.

Is the Business Plan template compatible with Mac?

Yes, our Business Plan template is compatible with Mac. You can use it on any computer running a Mac operating system.

Can I share the Business Plan with my team?

Yes, you can share the Business Plan with your team by providing them with a copy of the document. They will thus be able to contribute and collaborate in the development of the plan.

Is the Business Plan model based on real data?

Yes, our Business Plan template is based on real data and industry best practices. However, please note that actual results may vary depending on the individual circumstances of your business.

Can I obtain a printed version of the Business Plan?

Yes, you can print the Business Plan once you have downloaded it. This will allow you to have it in physical form and share it in meetings or presentations.

Is the Business Plan template suitable for small businesses?

Yes, our Business Plan template is suitable for small businesses. It covers all the essential aspects needed to present your project and convince interested parties to support your business.

Can I obtain examples of Business Plans already created?

Unfortunately, we do not provide examples of already completed Business Plans. Our template guides you in creating your own personalized plan.

Can I use the Business Plan to solicit investors?

Yes, you can use the Business Plan to solicit potential investors. It provides all the information needed to convince them to support your business financially.

Is the Business Plan model adapted to the needs of NGOs?

Yes, our Business Plan template can be adapted to the needs of non-profit organizations (NGOs). You can customize sections specific to your organization and add relevant details.

Can I obtain a multilingual version of the Business Plan?

Currently, our Business Plan template is only available in English. We plan to add more languages ​​in the future. Contact us if you have a special request.

Does the Business Plan template include marketing advice?

Yes, our Business Plan template includes marketing tips to help you define your marketing strategy and effectively promote your business.

Can I get a more concise version of the Business Plan?

Our Business Plan template is already designed to be concise and comprehensive. However, you can choose to remove certain sections or reduce them if you want a more concise version.

Can I customize the design of the Business Plan?

Yes, you can customize the Business Plan design by changing fonts, colors and layouts to match your brand or visual preferences.

Is the Business Plan model suitable for franchises?

Yes, our Business Plan model is suitable for franchises. You can add specific details about the franchise you want to acquire and customize the sections accordingly.

Can I share any comments or suggestions to improve the model?

Yes, we are always open to receiving feedback and suggestions to improve our Business Plan template. You can contact us by email to share your ideas.

Can I use the Business Plan to apply for a bank loan?

Yes, you can use the Business Plan to apply for a bank loan. It provides the information necessary to assess the viability of your project and convince the bank to grant you a loan.

Does the Business Plan template include financial projections?

Yes, our Business Plan template includes a detailed, customizable and automated financial projections template with Excel formulas to help you assess the profitability of your project and plan your future activities.

Can I get advice on the oral presentation of the Business Plan?

Yes, we can provide you with advice on the oral presentation of the Business Plan. You can contact us by email for recommendations and tips for a convincing presentation.

Is the Fintech Business Plan model suitable for technology companies?

Yes, our Business Plan template is suitable for technology companies. You can customize sections specific to your technology company and include relevant details.

Is the Fintech Business Plan template suitable for e-commerce businesses?

Yes, our Business Plan template is suitable for e-commerce businesses. You can customize sections specific to your ecommerce business and include relevant details.

Can I use the Fintech Business Plan to present to potential partners?

Yes, you can use the Business Plan to present your project to potential partners such as co-founders, investors or business partners. It will provide a clear vision of your business.

IF YOU HAVE OTHER QUESTIONS ?

Or a special request, related products.

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FinTech Business Models – A Complete Guide

You may not realize it, but the financial industry is currently undergoing one of its biggest shifts in recent memory. Just a little over a decade ago, over 50 percent of our purchases were still conducted using cash. Today, that number is below 20 percent.

This is, in large part, driven by the advancements of the FinTech industry. Trust in traditional financial institutions was at an all-time low after the financial crisis of 2008. This paved the way for a new generation of businesses, which put technology at the epicenter of their operations.

In 2019, a study by Ernst & Young revealed that more 64 percent of the world’s population now actively uses some sort of FinTech service. This represents a fourfold increase from 2015, when adoption was at 16 percent.

FinTech businesses are here to stay – and their significance is only increasing. This article will therefore take a closer look at what FinTech actually means, how it came to be, what companies are dominating the space, and its pros and cons.

What is FinTech?

FinTech stands for financial technology and describes new inventions aimed at improving the delivery and usage of financial services. In almost all cases, FinTech solutions are provided through the development of algorithms, cloud computing, and software.

FinTech solutions can be aimed at both private consumers (e.g. in the form of so-called neobanks) or established (financial) businesses, ranging from banks over insurances up to regular businesses like cafes or clothing stores.

Whether it’s paying your friend through Venmo or getting your insurance with Lemonade – FinTech companies have become an integral part of our daily lives. Furthermore, an increasing amount of traditional financial providers have decided to partner up with newly established technology solutions.

Over the past years, the FinTech industry has seen tremendous growth across many sectors. A report by Adroit Market Research projects the global FinTech market to hit $460 billion by 2025.

In its early days, modern-day FinTech companies were focused on improving the work and processes of financial institutions. Potential use cases have drastically expanded over the past few years, mainly driven by the wide adoption of smartphones as well as advancements in computing power and networking infrastructure.

A Short History Of FinTech

The term FinTech can be traced back to the early 1990s. It originated from a project at Citigroup named “Financial Service Technology Consortium”, which was aimed at facilitating the company’s collaboration on technological efforts.

Nevertheless, the usage of technology to deliver financial services has been going on for much longer. A paper by Arneris, Barberis, and Ross devised the evolution of FinTech into three distinctive eras, which we are going to cover in the following section.

FinTech 1.0 (1886 – 1967): First Baby Steps

According to Arneris and gang, the adoption of financial technology has been around since 1886. The creation of the telegraph as well as advancements in transportations (railroads and steamships in particular) helped transferring financial information across state borders.

The first electronic breakthrough came with the invention of Fedwire in 1918, a system created by the Federal Reserve Bank (FED) to move funds electronically. The invention was able to connect all 12 Reserve Banks across the nation through Morse code communication.

With the introduction of Fedwire, banks were able to settle fund transfers and outstanding payments in real-time. Prior to its introduction, settlement of interbank payments was often conducted through the physical delivery of cash or gold.

Three decades later, the first-ever credit card was introduced by the Diners Club . One of the club’s customers, Frank McNamara, forgot his wallet while attending a dinner and had to call his wife to settle the bill.

A couple of months later, McNamara and his partner, Ralph Schneider, returned to the club with a small cardboard card and a suggestion that resulted in the Diners Club Card . Club customers were able to make purchases on credit while settling their bills at the end of the month. In 1958, American Express followed suit with the introduction of the first bank-led credit card.

Continued innovation in the computing and telecommunications space provided the necessary platform for further technological enhancements. For instance, the Xerox Cooperation introduced the first fax machine in 1964 under the name of Long Distance Xerography (LDX).

FinTech 2.0 (1967-2008): Building The Modern Day Foundations

By 1967, financial services started moving from a pure analog to a more digitalized industry. That very same year, UK-based bank Barclays installed the first-ever automated teller machine (ATM) at its Enfield Town branch in North London.

In 1971, the world’s first electronic stock market was established. The National Association of Securities Dealers Automated Quotations , or simply NASDAQ, became one of the major catalysts in promoting the buying and selling of stocks.

It helped lowering the bid-ask spread , effectively reducing the difference between the bid and ask price of a stock (which helped accelerate trading). Furthermore, the NASDAQ helped modernize the IPO process by simplifying and speeding up the process for a company to go public.

The early 1980s saw the first attempts of establishing online banking as we know it today. In 1983, customers of Nottingham Building Society (NBS) were the first ever to get access to their bank accounts without being physically present in a store. Called Homelink , the project allowed customers to connect via a television set and their telephone to send transfers and pay bills. Unfortunately, the project was abandoned in the very same year.

Meanwhile, many established banks started replacing their existing internal operations and paper-based tools with computers. For instance, Michael Bloomberg started Innovation Market Solutions (IMS) in 1981 and developed the so-called Bloomberg Terminals , which are still in regular usage by the finance world to this date.

With the creation and emergence of the Internet in the early 1990s, FinTech finally became a worldwide phenomenon. Wells Fargo, in 1995, became the first bank to offer customers an online bank cheque account.

In the coming years, E-commerce paved the way for people to become more comfortable with paying for their goods online. And while many companies did not survive the burst of the Dot-com bubble in the late 1990s, some winners still emerged. These include the likes of Amazon, eBay, or PayPal . 

The new century saw further developments in both the consumer as well as business space. New forms of financing and investing, such as P2P lending or crowdfunding platforms (e.g. Kickstarter) emerged, giving consumers and business owners a greater variety to source funds.

Furthermore, the first direct banks that didn’t possess any physical branches started to arise. Examples include well-known brands such as ING Direct, HSBC Direct, or Germany-based DKB.

The democratization and opening of banking is one of the main contributors to lifting more and more individuals from being unbanked. According to a report published by The World Bank, a total of 1.7 billion adults across the globe still remain without a bank account.

FinTech 3.0 (2008-Current): Democratization Of Financial Services

The Global Financial Crisis in 2008 further accelerated the adoption of new technologies. Trust into established financial institutions shrank exponentially, paving the way for the era of FinTech 3.0.

That receding trust led to the infamous creation of Bitcoin back in 2009. A paper named Bitcoin – A Peer to Peer Electronic Cash System was shared on a discussion board about cryptography. It was published by Satoshi Nakamoto, whose real identity remains unknown to this date. Many believe Nakamoto is actually not a person, but a group of people responsible for creating Bitcoin.

Many other cryptocurrencies followed in the years after. Today, the global market for cryptocurrencies is valued at over $1 billion .

Meanwhile, the global adoption of smartphones as well as the creation of 3G/4G technology led to an influx of innovation in the mobile space. For instance, in 2011, Google (through Google Wallet ) became the first company allowing users to tap and pay with their phones using Near-Field Communication (NFC) chips in their mobile devices.

Today, FinTech solutions are embedded into almost all aspects of our life – whether it’s paying your Uber ride or DoorDash delivery (both platforms are powered by payment giant Stripe ), creating a bank account within a matter of clicks and minutes (through challenger banks like Chime ), or investing you’re your hard-earned dollars on Robinhood.

The EY FinTech Adoption Index states that 96 percent of today’s consumers are aware of at least one money transfer and payment FinTech service. Furthermore, over ¾ of all global consumers are actually using at least one FinTech service themselves.

Types & Examples Of FinTech Companies

On a broader level, FinTech companies fall into two distinct categories, being either focused on consumers or other businesses.

According to Crunchbase, FinTech companies have raised a combined $158 billion in over 10,000 rounds of funding.

It’s needless to say that FinTech companies are not only on the rise, but here to stay. They are taking a more important role in many financial aspects of our lives and as such span over many different categories.

Digital Banking

Digital banks (also referred to as neobanks or challenger banks) are direct banks that exclusively operate online and don’t rely on physical branch networks. Instead, they are mostly made available through mobile applications.

Digital banks oftentimes offer the same type of functionality compared to their traditional counterparts. Common offerings include:

• Checking and savings accounts
• Money transfers
• Budgeting and automated savings

In some instances, neobanks work together with established banks to offer other services such as loans or investment opportunities.

Most digital banks do not possess the necessary banking license that allows them to ensure customer deposits or extending credit lines. Therefore, they partner up with established banks that take on that risk.

From a customer’s perspective, the digital bank might amount to nothing more than an app interface that allows one to manage their money.

Because neobanks are often much nimbler with regards to their IT infrastructure, they can sign up customers at a much faster rate – removing the need for necessary paperwork (and instead relying on quick video authentication).

Well-funded examples in the digital banking space include the likes of N26 , Revolut , Monzo , and many others.

Research & Insights

This sector of the FinTech industry is all about services that help other firms to investigate and analyze financial data about companies and markets.

Typical customers include mutual funds, banks, security firms, and any other companies that offer financial services.

These companies either provide research services or offer a product that eases the research process (i.e. through databases or APIs).

Examples include AlphaSense, Stocktagon, Seeking Alpha, xignite, and many others.

Banking Infrastructure

Banks across the globe have a combined market cap of $7.6 trillion. And almost all these banks have a need to modernize processes as well as obeying to changes in regulations.

Over 75 percent of a bank’s IT budget is spent on maintaining existing systems. It therefore becomes hard for banks to innovate from within. The solution: investing and spending money on externally provided tools powered by FinTech startups.

The advantage of utilizing third-party services is that they are usually easy and fast to deploy. Furthermore, since many of these tools are offered as monthly charged subscriptions that can be canceled at any time, budgeting for them becomes a lot less complicated.

Example companies include:

• Symphony : An instant messaging platform (similar to Slack ) aimed at financial firms. Users can hold meetings through audio and video, share and save files, third-party app integration, and many others.
• nCino : The nCino platform is a cloud-based software developed for banks. It entails customer onboarding, CRM tools, loan origination, credit analysis, and reporting capabilities.
• Kyriba : A capital management system that offers tools such as treasury management, payment gateways, data collection systems, and many more.

For over 200 years, stockbrokers charged retail investors with a fixed-rate commission for every trade made. As recently as the 1970s, a single trade could be in the hundreds of dollars.

Even after 1975, when the SEC put laws in place to prohibit the charge of excessive rates, buying stocks would still cost up to $75. By the 1990s, fees were still around the $20 mark.

Around the same time, the first electronic trading platforms were created, sparking a worldwide phenomenon and birthing self-proclaimed traders everywhere you looked. One of the companies leading the charge was Palo Alto based E-Trade, which Morgan Stanley eventually acquired in a $13 billion stock deal.

But even by 2014, trades were costing around $5 to $10, something that led Vladimir Tenev and Baiju Bhatt to create Robinhood – the world’s first commission-free trading platform.

Over one million people signed up to the company’s unreleased beta version in 2014. Today, the company counts over 13 million users and sparked a trend across competing brokerage firms to eliminate commissions as well.

In case you wonder: Robinhood (and any other modern-day brokerage for that matter) makes money through the upselling of premium subscription services or interest fees.

Institutional Investing

Institutional investors are companies that invest money on behalf of others. Traditional examples include pension funds, insurance firms, hedge funds, commercial banks, or mutual funds.

Between 70 percent to 85 percent of the ten largest U.S. companies is owned by institutional investors . They furthermore own 80 percent of the S&P 500 index, equal to $18 trillion. Some investments are so big that they can even move market sentiment.

Naturally, these investors oftentimes represent large organizations comprised of thousands of employees.

The FinTech companies in this space help to ease the investment decision process by providing tools and data.

Example companies in the space include Addepar, Dataminr, Trumid, and many others.

Blockchain & Cryptocurrency

The crypto space has made huge strides from its early days. The bitcoin craze of 2017 was quickly followed by countless hacks, ICO scams, and the public’s consensus that cryptocurrencies and the blockchain, its underlying database, would never be more than a hopeful thought.  

A lot has happened ever since. More and more startups have emerged and are now commanding a significant share of the Fintech industry. 6 of the 50 companies listed in the Forbes FinTech 50 list can be attributed to this space. Examples include:

• Coinbase : A marketplace for trading some of the world’s most prominent cryptocurrencies. The company even launched its own credit card, which users can load up with cryptos and purchase items.
• Ripple: Ripple encompasses both its own cryptocurrency (called XRP) and a digital payments network, which customers can use to transfer money between each other. Ripple’s consensus mechanism (i.e. the way it validates transactions) is based on a group of servers, which is similar to the SWIFT system for international money and security transfers. Its main advantage compared to Bitcoin transactions (which are based on the blockchain) is the speed of verification and significantly lower energy consumption.
• Axoni: The company is a provider of distributed ledger technology for financial institutions and capital markets. Their technology allows these institutions to conduct various financial transactions based on the blockchain technology.

… and many more. In 2019, the cryptocurrency market alone hit a valuation of $1.03 billion and is expected to grow to $1.4 billion by 2024. During that same time span, the number of cryptocurrency businesses is expected to reach 20,000.

(International) Money Transfers

Transferring money, especially to people living abroad, can be an extremely cumbersome undergoing. Not only are there substantial fees involved, but the process itself tends to be quite confusing and complicated.

For the longest time, people relied on providers with physical branches, including the likes of Western Union or Moneygram.

Ever since the turn of the century, various online businesses have sprung up to make the process of sending and receiving money a lot easier.

That trend was pioneered by PayPal, which was sold to eBay in 2002 for a whopping $1.5 billion. In recent years, startups like TransferWise or Payoneer have taken this to even more efficient levels. Even the digital banks like Revolut now allow to transfer money to foreign accounts.

In almost all cases, the business model is based on charging consumers a percentage fee of the sum that is transferred. The main differentiator between the established money transfer service is the speed of cash delivery as well as the lower fees charged.

Crowdfunding

Crowdfunding is the process of raising smaller chunks of money from a large group of individuals with the aim of financing a product or project. Crowdfunding projects typically occur over the internet.

There are many different types of crowdfunding available. Examples include:

• Early access crowdfunding: customers pay to gain access to the early version of a product, normally at a cheaper rate than the projected price. Oftentimes, fund seekers set specific funding goals to be able to develop the product or service in the first place.
• Profit or revenue sharing: businesses will share future revenues and/or profits in return for funding in the present.
• Donation-based crowdfunding: People donate money to a project without any equity, interest, or product in return.

Individuals and businesses have raised over $40 billion in transaction value in 2017 alone . In 2016, over 2,000 crowdfunding platforms were raising money for various products and causes around the world.

Nevertheless, individuals must be cautious when using crowdfunding as an investment vehicle. Returns on investment are by no means guaranteed. In some cases, investors might even be subject to fraud. Lastly, the crowdfunding platform itself might go out of business, using your investments as securities.

Prominent examples in the crowdfunding space include Kickstarter, GoFundMe, Patreon, Indiegogo, and many more.

The business model of Crowdfunding platforms is centered around charging a percentage fee of the overall funding raised.

Personal Finance

Personal finance is defined as the process of budgeting, saving, or investing monetary resources to accumulate personal wealth. It entails aspects such as mortgages, retirement plans, taxation, banking, or investments.

The activities a person undergoes can vary greatly depending on their level of income, past savings history, expenses, future financial goals, or potentially inherited resources.

As such, the amount and types of personal finance FinTech companies are as widespread as the activities that an individual can undergo.

Just to name a few examples:

• Credit Karma : Founded in 2007, the company provides free credit scores and credit reports from national credit bureaus, a daily credit monitoring tool, tax filing options, a credit card, loans, and many other financial products.
• Nova Credit: The startup sources credit report information from eight countries to create a so-called Credit Passport . It enables immigrants to the U.S. to qualify for loans, credit cards, or apartment rentals based on their home-country’s credit record.
• Propel: Headquartered in New York, the company’s mobile app enables food stamp recipients to check their balances without having to call an 800-number. Furthermore, users can search for job postings, reach out to social services, or electronically clip store coupons for retrieval.
• Tala: The startup gives developing country citizens the chance to borrow anywhere between $10 to $500 without any significant history of borrowing money. Their smartphone data is used to assess risk. For instance, applications that regularly text their parents or pay bills on time are more likely to receive a loan.

The usage of technology within personal finance is as diverse and widespread as the customer base it attracts and companies it helps to create.

Payments Backend

With the rise of the Internet and e-commerce came the need for mobile and web-based startups to handle large amounts of transactions on their platforms.

Payment processors are an in-between service, handling the entered information supplied during the checkout process. Furthermore, these processors take care of payment authorization as well as the fulfillment of the payment.

The process looks roughly like this:

• The customer buys an item or a service using a credit or debit card
• The payment information is transmitted through a payment gateway, which stores and safely encrypts the data to keep it private, and then sends it to the processor of the payment
• The payments processor issues a request to the customer’s bank to check if they possess a sufficient balance
• The bank responds with either an approval or denial
• The payments process then sends that answer back to the platform that made the sale, effectively accepting or denying the purchase

The above process can take anywhere between one to five seconds, depending on the parties involved. And processing payments is certainly extremely lucrative. The global market for payment processing is projected to hit $62.3 billion by 2024.

Furthermore, according to Venture Scanner , payments processing startups are among the highest to achieve an exit (either through a sale or going public).

Lastly, some of the world’s most well-funded startups belong in this category. Examples include the previously mentioned Stripe, Adyen, Sweden-based Klarna , or BlueSnap.

The business model, in many cases, is predicated on charging a percentage of the transaction volume. In recent years, these companies went on to use their cash to extend into other services such as loans, (business) bank accounts, or API gateways.

Pros & Cons Of The FinTech Model

As previously mentioned, FinTech companies can come in many shapes. Therefore, the advantages and disadvantages of the FinTech model can be far-reaching for both the company itself as well as the customer buying into it.

Nevertheless, there is a set of benefits and risks that all of them share. These will be mentioned below.

Advantages Of The FinTech Model

Financially lucrative. The financial industry is one of the biggest in the world, and as such, poses many opportunities to generate significant amounts of revenue. Startups in the space are among the best-funded and highest valued.

Slow-moving incumbents. Many existing players (especially traditional banks) are built on outdated legacy systems. This makes it extremely difficult to respond to fast-changing consumer trends. Some of the newly established neobanks have used this to their advantage and started snatching away customers from established banks. Other incumbents have responded by partnering up with these challenger banks, providing the underlying banking license and regulatory expertise.

Loyal customer base. The average U.S. adult has uses their bank account for 16 years . Customers trust their banks by keeping their finances safe, borrowing money for life-changing purchases like a house, or how to best invest existing funds. While acquiring a customer isn’t cheap (banks, for instance, spend billions every year for various marketing activities), they tend to be extremely loyal over the course of their membership.

Disadvantages Of The FinTech Model

Highly regulated industry. There are over 20 governmental institutions in the US alone that oversee a bank’s compliance with existing regulations. Furthermore, existing laws as well as accounting standards are changed on a continuous basis. Complying with all of these regulations can therefore be extremely complex.

Cost of operation. With a complex regulatory body comes the need for hiring skilled labor that can navigate this environment. Furthermore, given how lucrative the financial space is, FinTech businesses often must invest heavily in acquiring customers. Take, for instance, Brex , which offers a credit card for startups. The company had spent millions on billboards across popular tech cities such as San Francisco or New York.

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Last Updated on December 29, 2022 by Viktor Hendelmann

Fintechs: A new paradigm of growth

Over the past decade, technological progress and innovation have catapulted the fintech sector from the fringes to the forefront of financial services. And the growth has been fast and furious, buoyed by the robust growth of the banking sector, rapid digitization, changing customer preferences, and increasing support of investors and regulators. During this decade, fintechs have profoundly reshaped certain areas of financial services with their innovative, differentiated, and customer-centric value propositions, collaborative business models, and cross-skilled and agile teams.

As of July 2023, publicly traded fintechs represented a market capitalization of $550 billion, a two-times increase versus 2019. 1 F-Prime Fintech Index. In addition, as of the same period, there were more than 272 fintech unicorns, with a combined valuation of $936 billion, a sevenfold increase from 39 firms valued at $1 billion or more five years ago. 2 Dealroom.co; McKinsey analysis.

In 2022, a market correction triggered a slowdown in this explosive growth momentum. The impact continues to be felt today. Funding and deal activity have declined across the board, and there are fewer IPOs and SPAC (special purpose acquisition company) listings, as well as a decline in new unicorn creation. The macro environment also remains challenging and uncertain. In such a scenario, fintechs are entering a new era of value creation. The last era was all about firms being experimental—taking risks and pursuing growth at all costs. In the new era, a challenged funding environment means fintechs can no longer afford to sprint. To remain competitive, they must run at a slower and steadier pace.

About the authors

This report is a collaborative effort by Lindsay Anan, Diego Castellanos Isaza, Fernando Figueiredo, Max Flötotto , André Jerenz, Alexis Krivkovich , Marie-Claude Nadeau , Tunde Olanrewaju , Zaccaria Orlando, and Alessia Vassallo, representing views from McKinsey’s Financial Services Practice.

In this report, we examine how fintechs can continue to grow in strength and relevance for customers, the overall financial ecosystem, and the world economy, even in disruptive times. Based on research and interviews with more than 100 founders, fintech and banking executives, investors, and senior ecosystem stakeholders, we have identified key themes shaping the future of fintechs. To help fintechs capitalize on these themes, we also provide a framework for sustainable growth, based on an analysis of the strategies used by long-established public companies that have weathered previous economic cycles.

Fintech growth then and now

The fintech industry raised record capital in the second half of the last decade. Venture capital (VC) funding grew from $19.4 billion in 2015 to $33.3 billion in 2020, a 17 percent year-over-year increase (see sidebar “What are fintechs?”). Deal activity increased in tandem, with the number of deals growing 1.2 times over this period.

What are fintechs?

We define fintech players as start-ups and growth companies that rely primarily on technology to conduct fundamental functions provided by financial services, thereby affecting how users store, save, borrow, invest, move, pay, and protect money. For the analysis of this report, we included the following fintech sectors: daily banking; lending; wealth management; payments; investment banking and capital markets; small and medium-size enterprise (SME) and corporate services; operations; and infrastructure (including embedded finance, and banking as a service). The analysis excluded cryptocurrency, decentralized finance, and insurtech.

The industry fared even better in 2021, thriving on the backs of the pandemic-triggered acceleration in digitization and a financial system awash with liquidity. Funding increased by 177 percent year over year to $92.3 billion, and the number of deals grew by 19 percent.

The funding surge proved to be a one-off event. Funding levels in 2022 returned to long-term trend levels as inflated growth expectations from the 2021 extraordinary results were reanchored to business-as-usual levels, and as deteriorating macroeconomic conditions and geopolitical shocks destabilized the business environment. The correction caused fintech valuations to plummet. Many private firms faced down rounds, and publicly traded fintechs lost billions of dollars in market capitalization. VC funding was hit hard globally and across sectors, dropping to $459.6 billion in 2022 from $683.1 billion in 2021. Fintech funding faced a 40 percent year-over-year funding decline, down from $92 billion to $55 billion. Yet, when analyzed over a five-year period, fintech funding as a proportion of total VC funding remained fairly stable at 12 percent, registering only a 0.5 percentage point decline in 2022.

Looking ahead, the fintech industry continues to face a challenging future, but there are several opportunities yet to be unlocked. Investors are adapting to a new financial paradigm with higher interest rates and inflation, which has altered their assessment of risk and reward. At the same time, the once-in-a-generation technology revolution under way is generating more value creation opportunities. Our research shows that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2022 and 2028. Compared with the 6 percent annual revenue growth for traditional banking, fintechs could post annual revenue growth of 15 percent over the next five years.

McKinsey’s research shows that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2023 and 2028.

These trends are also coinciding with—and in many ways catalyzing—the maturation of the fintech industry. Based on our research and interviews, three themes will shape the next chapter of fintech growth. First, fintechs will continue to benefit from the radical transformation of the banking industry, rapid digital adoption, and e-commerce growth around the world, particularly in developing economies. Second, despite short-term pressures, fintechs still have room to achieve further growth in an expanding financial-services ecosystem. And finally, not all fintechs are being hit equally hard during the market correction: fintechs in certain verticals and at particular stages of growth are more resilient than their peers.

Radical transformation of the banking industry

Banking is facing a future marked by fundamental restructuring. As our colleagues wrote recently, banks and nonbanks are competing to fulfill distinct customer needs in five cross-industry arenas in this new era: everyday banking, investment advisory, complex financing, mass wholesale intermediation, and banking as a service (BaaS). 3 Balázs Czímer, Miklós Dietz, Valéria László, and Joydeep Sengupta, “ The future of banks: A $20 trillion breakup opportunity ,” McKinsey Quarterly , December 20, 2022.

At the same time, macro tailwinds are powering the growth of fintechs and the broader financial-services ecosystem. Digital adoption is no longer a question but a reality: around 73 percent of the world’s interactions with banks now take place through digital channels.

Moreover, retail consumers globally now have the same level of satisfaction and trust in fintechs as they have with incumbent banks. 4 McKinsey Retail Banking Consumer Survey, 2021. In fact, 41 percent of retail consumers surveyed by McKinsey in 2021 said they planned to increase their fintech product exposure. The demand—and need—for fintech products is higher across developing economies. In 2022, for example, Africa had almost 800 million mobile accounts, almost half of the whole world’s total. 5 The state of the industry report on mobile money , GSM Association, April 2023.

B2B firms’ demand for fintech solutions also is growing. In 2022, 35 percent of the small and medium-size enterprises (SMEs) in the United States considered using fintechs for lending, better pricing, and integration with their existing platforms. And in Asia, 20 percent of SMEs leveraged fintechs for payments and lending. 6 McKinsey 2022 US SMB Banking Survey, 2022 (n = 955).

To capitalize on this demand, fintechs will need to keep up with fast-evolving regulations and ensure they have adequate resources and capacity to comply. Some European Union member states, such as Ireland, are bringing buy-now-pay-later providers under the scope of financial regulation. 7 Miroslav Đurić and Verena Ritter-Döring, “Regulation of buy-now-pay-later in the EU: New regime on the horizon,” Law Business Research, February 8, 2023. Meanwhile, the US Consumer Financial Protection Bureau aims to issue a proposed rule around open banking this year that would require financial institutions to share consumer data upon consumers’ requests. 8 Farouk Ferchichi, “The US is one step closer to making open banking a reality,” Finextra, January 19, 2023. This would make it necessary for fintechs to ensure they have the available resources and capacity to respond to these requests.

A nascent industry in an expanding ecosystem

The banking industry generated more than $6.5 trillion in revenues in 2022, with year-over-year growth in volume and revenue margins. 9 “ McKinsey’s Global Banking Annual Review ,” McKinsey, December 1, 2022. Given the fintech market dynamics, this suggests there is still plenty of room for further growth in both public and private markets.

In 2022, fintechs accounted for 5 percent (or $150 billion to $205 billion) of the global banking sector’s net revenue, 10 Net revenue equals revenue after risk minus direct costs. according to our analysis. We estimate this share could increase to more than $400 billion by 2028, 11 Estimate based on historical growth at regional level and expert inputs from regional leaders in the banking industry (for example, forecast of roughly 80 percent 2021–22 revenue increase in Latin America). representing a 15 percent annual growth rate of fintech revenue between 2022 and 2028, three times the overall banking industry’s growth rate of roughly 6 percent (Exhibit 1).

Emerging markets will fuel much of this revenue growth. Fintech revenues in Africa, Asia–Pacific (excluding China), Latin America, and the Middle East represented 15 percent of fintech’s global revenues last year. We estimate that they will increase to 29 percent in aggregate by 2028. On the other hand, North America, currently accounting for 48 percent of worldwide fintech revenues, is expected to decrease its share to 41 percent by 2028.

While fintech penetration in emerging markets is already the highest in the world, its growth potential is underscored by a few trends. Many of these economies lack access to traditional banking services and have a high share of underbanked population. Fintechs have had some success in addressing these unmet needs. In Brazil, for example, 46 percent of the adult population is said to be using Nubank, a fintech bank in Latin America—double the share two years ago. 12 Oliver Smith, “Nubank turns $141m profit in Q1 as Brazilian market share nears 50%,” AltFi, May 16, 2023.

Moreover, while the market cap of private fintech companies has increased substantially over the past decade, the sector’s penetration of the public market remains small. 13 Michael Gilroy, Chase Packard, and Leslie Wang, Fintech and the pursuit of the prize: Who stands to win over the next decade? , Coatue, October 24, 2022. In the eight years leading up to October 2022, 44 modern fintechs (those that were founded in 1999 or later and went public after 2014) did an IPO, creating a combined market cap of $0.3 trillion. In contrast, during the same period, there were more than 2,500 legacy public financial-services companies (whose average year of founding was 1926) with a combined market cap of $11.1 trillion. 14 Michael Gilroy, Chase Packard, and Leslie Wang, Fintech and the pursuit of the prize: Who stands to win over the next decade? , Coatue, October 24, 2022.

Not all fintech businesses are created (or funded) equal

Last year was turbulent for fintechs, but there were differences in the fundraising performance of firms based on maturity and segments.

Maturity stage

Companies in the growth stage (series C and beyond) showed the highest sensitivity to last year’s funding downturn, with a sharp year-over-year funding decline of 50 percent. Meanwhile, fintechs in the early seed and pre-seed stages were more resilient and increased funding by 26 percent year over year (Exhibit 2). This funding outperformance of firms in the early and pre-seed stages was a consequence of the longer time to maturity, which gives start-ups more time to get through periods of economic uncertainty and recover any losses before an eventual sale.

Funding for B2B fintech segments last year was more resilient than for those in B2C, with smaller funding declines (Exhibit 3). The two B2B verticals that were least affected were (1) BaaS and embedded finance and (2) SME and corporate value-added services. These two verticals recorded year-over-year funding declines of 24 and 26 percent, respectively. In contrast, funding for payments-focused fintechs dropped 50 percent. Even then, payments and lending received the largest shares of total fintech funding.

Funding for B2B segments grew at more than 25 percent annually between 2018 and 2022, driven by an increasing number of businesses adopting off-the-shelf solutions provided by digital-native firms (including payments, open banking, and core banking technology) to address challenges arising from using legacy banking infrastructure—for example, limited flexibility, slower speed, and high costs.

Many businesses continue to rely on legacy banking infrastructure that limits flexibility and speed and can often be more costly. To address these challenges, businesses are benefiting from using off-the-shelf solutions provided by digital natives for services such as payments, open banking, and core banking technology.

For BaaS and embedded finance, demand is led by customer-facing businesses looking to control their users’ end-to-end experience. Meanwhile, SMEs have been underserved by traditional financial-services providers, despite the fact they represent about 90 percent of businesses and more than 50 percent of employment worldwide. 15 “Small and medium enterprises (SMEs) finance,” The World Bank, accessed October 10, 2023. And in developing countries, the finance gap for micro, small, and medium-size enterprises (MSME) is estimated to be approximately $5 trillion, or 1.3 times the current level of MSME lending. 16 “MSME finance gap,” IFC, accessed October 10, 2023. Fintech firms have successfully addressed some of SMEs’ needs worldwide, especially in developing countries.

The path to sustainable growth

The current churn in the markets makes it prudent for fintechs to define their next move carefully. After all, they are operating in a much different environment than in years past. In their hypergrowth stage, fintechs had access to capital that allowed them to be bold in their business strategy. They could make revenue generation their foremost objective; profits were expected to follow.

The narrative has shifted since last year. The time between funding rounds for fintechs increased by more than five months from the first to the fourth quarter of 2022. The average value of funding rounds decreased by 50 percent over the same period. 17 “SVB’s challenges will accelerate valuation down rounds, startup mortality, and layoffs,” CB Information Services, March 15, 2023. These changes are forcing fintechs to find newer ways to extend runways and adjust their operating models to make decreasing amounts of cash last longer.

The days of growth at any cost are behind the industry, for now at least. In a liquidity-constrained environment, fintechs and their investors are emphasizing profitability, not just growth in customer adoption numbers or total revenues. “In the past, the reward went to fintechs that showed growth at all costs, which led to healthy valuations,” said one Africa-based growth equity investor. “Now it is about the sustainability of the business, the addressable market, and profitability.”

In a liquidity-constrained environment, fintechs and their investors are emphasizing profitability, not just growth in customer adoption numbers or total revenues.

So how can fintechs get on a path of sustainable, profitable growth?

In 2019, McKinsey conducted an in-depth study of the growth patterns and performance of the world’s 5,000 largest public companies over the preceding 15 years. The researchers’ analysis identified ten rules for value-creating growth. 18 Chris Bradley, Rebecca Doherty, Nicholas Northcote, and Tido Röder, “ The ten rules of growth ,” McKinsey, August 12, 2022. According to the research, companies that set growth strategies addressing all available pathways to growth were 97 percent more likely to achieve above-peer profitable growth. 19 “ Choosing to grow: The leader’s blueprint ,” McKinsey, July 7, 2022.

This set of rules adopted by public companies that have lived through economic cycles and periods of uncertainty can also be useful for fintechs as they transition to a sustainable growth model. Based on our analysis of these rules and interviews with more than 40 fintech industry leaders, we expect four pathways to deliver the most impact for fintechs.

Cost discipline

When fintechs had access to abundant cash and funding was easy, they placed more emphasis on growing rapidly than on managing costs. Targeted cost savings have become a bigger priority today, as fintechs seek ways to lower expenses and achieve profitability while maintaining customer satisfaction and pursuing customer growth and acquisition. Our research has found that 50 percent of public fintechs (following their IPO) were profitable in 2022. And the key differentiator between profitable and nonprofitable fintechs was cost management, not revenue growth (Exhibit 4). While both categories recorded year-over-year revenue growth of 13 percent, profitable fintechs posted a median 3 percent decrease in costs. Nonprofitable fintechs, in contrast, saw costs rise by 27 percent, which affected their profit margins.

Successful implementation of cost management efforts is the key for fintechs in their next phase of evolution. Several leaders are already making moves: 60 percent of our survey respondents said their firms are significantly managing costs. An executive at an African mobile payments firm said they are now negotiating every cost and making sure the firm is thinking for the long run.

Consider the example of the Indian fintech company Paytm, which specializes in digital payments and financial services. The firm had had a target of achieving breakeven by September 2023 but was able to achieve this six months ahead of schedule. It did so through disciplined cost management, revenue growth across businesses, and a business model with strong operating leverage. 20 “Our discipline in cost management sustains and grows profitability,” Paytm, February 20, 2023.

While fintechs establish a clear focus on costs, they should also consider adjusting how they operate, thereby creating a more agile and flexible organization that can deal with the current environment. Around 80 percent of the interviewed fintechs report that they are currently making changes to their operating models. Of these, 66 percent cite a focus on profitability and a sustainable cost structure as being among their top three reasons. Such adjustments to the operating model are most sustainable when institutions also reinforce the control functions to protect customers and stay on top of regulatory changes.

A shift from hypergrowth to sustainable growth would also result in a greater focus on strong unit economics. To do this, fintechs ensure that the profitability view is embedded across the business. For example, assessment of the value of adding new customers would evolve from efficiency-only metrics such as the customer acquisition cost (CAC) to a more holistic approach. In this example, one way to embed profitability into acquisition investment and decision making is to compare the CAC with the projected lifetime value (LTV) of a customer, using the LTV/CAC ratio to assess the marginal return on investment for acquiring every new customer. In Latin America, for example, 68 percent of fintechs self-reported an LTV/CAC greater than five, which indicates a potential for fintechs to increase spending and further fuel growth without sacrificing profitability.

Measured growth

As leaders develop growth strategies, an important question is where growth should come from. Fintechs can grow sustainably by taking three steps: building a strong core, expanding into adjacent industries and geographies, and shrinking to grow. Identifying which steps will be most accretive to growth will depend on the unique circumstances of each fintech; some might find value in pursuing all three steps, while others could choose to focus on one. Regardless of the circumstances, this decision will have greater longer-term consequences in the current environment, compared with the earlier high-funding phase.

Focus on building a strong core as a precursor for expansion

The first step in cracking the growth code involves focusing on the local market and developing a healthy core business. According to our research, companies that focus on their core business and have a strong home market are 1.6 times more likely to generate peer-beating returns. 21 Chris Bradley, Rebecca Doherty, Tido Röder, and Jill Zucker, “ Growth rules: Which matter most? ,” McKinsey, March 6, 2023.

For fintechs, the key will be to relentlessly focus on growth in their core business. As a North American fintech executive told us: “It’s a bit of back to basics. On a core product or offering, 18 to 24 months ago, you would have built additional pieces on it to upsell and cross-sell. Now, we’re looking to double down on the core business and make sure it’s a stable, viable operation.”

To do this, fintechs must tailor their value propositions to their focus markets. Let’s take the example of B2C fintechs. Our recent research (McKinsey’s Retail Banking Consumer Survey and Global Banking Pools ) quantified the potential drivers for growth at B2C fintechs. Cross-selling will likely drive growth for fintechs in emerging economies, while those in developed countries will likely see greater growth from capturing new customers. Around 72 percent of revenue growth for companies in Brazil, for example, is expected to come from cross-selling, in contrast with 25 percent and 30 percent for the United Kingdom and the United States, respectively, with the remaining growth coming from new customers (Exhibit 5). There is arguably less potential for new-customer development in developing economies, given their high fintech penetration.

Across the competitive landscape, as markets are highly heterogenous, a dedicated strategy for each region is recommended. For example, our analysis found that in the United Kingdom and the United States, fintech revenue share is split almost equally between incumbent digital banks and pure fintech players. In contrast, digital incumbents in Germany and pure fintech players in Brazil could dominate banking’s revenue share in their respective markets.

Expand into adjacent segments and geographies

After building a strong core, fintechs can consider expanding into other segments and geographies as a second source of growth. According to our previously published research, companies that do so are 1.2 to 1.3 times more likely to generate sizable returns than peers that focus solely on their core. 22 Chris Bradley, Rebecca Doherty, Tido Röder, and Jill Zucker, “ Growth rules: Which matter most? ,” McKinsey, March 6, 2023.

Today, however, expansion is no longer a must-do strategy. It may be most advantageous for companies that have strong footholds in their core markets and can use some competitive or ownership advantage to expand elsewhere. The key is to pursue measured, value-creating growth. A case in point is OPay, which started as a mobile money platform in Nigeria and has since expanded across financial-services verticals. OPay now offers peer-to-peer payments and merchant and card services.

Shrink to grow

Fintechs are moving from hypergrowth to sustainable growth, but that growth may not necessarily be consistent across all parts of the business. If fintechs divest from underperforming parts of their portfolios and scale back from regions recording limited growth, they can reinvest that capital into high-performing segments—a strategy we call “shrinking to grow.” In our research, companies that use this approach are 1.4 times more likely to outperform their peers.

“In the past, many fintechs expanded geographically, even if it didn’t make much sense,” an executive at a Latin American fintech told us. “Now they will have to focus on their profitable segment and geography and stop expanding where they are not.”

Some fintechs have been deliberate about using a shrink-to-grow strategy, changing track if an expansion strategy did not materialize as expected or the local market had more potential for growth. German robo-adviser Scalable Capital, for example, announced plans to discontinue its Swiss operations as of 2020 to focus on other markets because the implementation of the Financial Services Act in Switzerland would have required the company to manage two regulatory frameworks simultaneously. Meanwhile, Wealthsimple, a Canadian online investment platform, exited from the United Kingdom and the United States in 2021 to concentrate on its local retail market and expand its product portfolio into new financial-services areas. Similarly, in late 2020, San Francisco–based fintech LendingClub shut down its retail peer-to-peer platform called Notes to focus on other products.

Programmatic M&A

Many companies will conclude they can achieve the steps outlined in this report—launching new features, building new capabilities, and pivoting toward new revenue streams and segments—more swiftly through thoughtful acquisitions and partnerships than by relying on pure organic development. Fintech firm Block, for example, completed its acquisition of the buy-now-pay-later platform Afterpay in January 2022 to accelerate its strategic priorities for its seller and cash app ecosystems. 23 “Block, Inc. completes acquisition of Afterpay,” Block, January 31, 2022. Nearly 60 percent of fintech executives in our survey told us they are considering an acquisition in the next 18 months.

Moreover, with IPO and SPAC (special purpose acquisition company) activity slowing considerably since last year, many fintechs that might otherwise go public are turning to private markets for funding. Take the example of the British fintech Zopa, which intended to list by 2022 but eventually decided to put IPO plans on hold in response to challenging market conditions. In the interim, the firm has been raising capital from its shareholders, including $92 million in February. 24 “Zopa raises £75 million,” Zopa Bank Limited, February 1, 2023.

M&A transactions increase significantly during periods of economic uncertainty, when they also tend to deliver higher returns. During the global financial crisis, around 45 percent of banking M&A deals showed positive excess two-year total shareholder returns (TSR) between 2007 and 2009. 25 As of the year of the deal’s announcement. In comparison, less than 30 percent of banking deals posted positive excess two-year TSR between 2010 and 2020. 26 McKinsey Fintech Quarterly Radar, Q1 2023. Across industries, companies actively making acquisitions worth 10 percent or more of their market cap in total had an average TSR of 6.4 percent between January 2007 and January 2008, compared with −3.4 percent for the less active companies. 27 Brian Salsberg, “The case for M&A in a downturn,” Harvard Business Review , May 2020.

However, not all M&As are successful. Many fail to create value due to contrasting values and cultures, mismatched product–market fit, and inflated revenue forecasts in the pursuit of customer engagement and growth at all costs.

Keeping the culture alive

What has made fintechs so disruptive over the years? The answer lies largely in their ability to innovate and differentiate. Since fintechs are not as encumbered by legacy systems and processes, they can be more agile in using emerging technologies to anticipate and solve customer needs. Typically, they also have a customer-centric and collaborative approach to deliver innovation with cross-skilled teams.

Innovations have happened across fintech verticals. Neobanks like Chime and Monzo, designed around a simple and intuitive user experience, have changed assumptions about the role of branches in traditional retail banking. In the United Kingdom, for example, the total number of bank and building society branches fell by 40 percent between 2012 and 2022. 28 Lorna Booth, Statistics on access to cash, bank branches and ATMs , House of Commons, September 1, 2023. Robo-advisers such as Wealthfront and Nutmeg disrupted the traditional wealth management industry by offering low-cost, accessible alternatives to individuals lacking access to personalized financial advice. Funding Circle introduced the peer-to-peer lending concept to the financial sector, bypassing traditional banks (which had owned this relationship) and enabling direct lending between parties.

Incumbents are fast catching up with these innovations by ramping up investments in new technologies. Around 94 percent of banks in a recent survey said they plan to invest more in modern payments technology to support end user demand for better payment capabilities over the next two to three years. Of these, 65 percent said they intend to make significant or moderate levels of investment. 29 “94% of banks eyeing investment in modern payment tech, to keep pace with fintech innovation,” Finastra press release, March 8, 2023. Many incumbents are also partnering with BaaS platforms to overhaul their digital capabilities. Examples include Fifth Third Bank’s acquisition of Rize Money in May 2023 and NatWest Group’s partnership with Vodeno Group in October 2022 to create a BaaS business in the United Kingdom.

Generative AI and the future of banking

Artificial intelligence (AI) technologies are increasingly integral to the world we live in, and investors are taking notice. Generative AI is among the advanced technologies for which investments are accelerating, thanks to its potential to transform business. According to McKinsey research published in June 2023, generative AI could add the equivalent of $2.6 trillion to $4.4 trillion annually  across as many as 63 use cases.

Generative AI’s impact on the banking industry will be significant, delivering benefits beyond existing applications of AI in areas such as marketing. As our colleagues have written, this technology could generate an additional $200 billion to $340 billion annually in value, arising from around 2.8 to 4.7 percent increase in the productivity of banking’s annual revenues—if the use cases are fully implemented. 1 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. For fintech, we expect a commensurate impact, if not more, given the already high exposure to tech.

Generative AI’s impact—and resulting reinvention—will span three broad categories:

• Automation. Half of today’s work activities could be automated between 2030 and 2060, according to McKinsey estimates. 2 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. Fintech firm Intuit, for example, has introduced a generative AI operating system on its platform. Its custom-trained large language financial models specialize in solving tax, accounting, cash flow, and personal finance challenges, among others. 3 “Intuit introduces generative AI operating system with custom trained financial large language models,” Intuit press release, June 6, 2023.
• Augmenting and enhancing productivity to do work more effectively. Generative AI could enable labor productivity growth of 0.1 to 0.6 percent annually through 2040, depending on the rate of technology adoption and redeployment of workers’ time to other activities. Morgan Stanley is building an AI assistant using GPT-4 to help the organization’s wealth managers quickly find and synthesize answers from a massive internal knowledge base. 4 “Morgan Stanley Wealth Management announces key milestone in innovation journey with OpenAI,” Morgan Stanley press release, March 14, 2023.
• Acceleration. Organizations can use generative AI to extract and index knowledge to shorten innovation cycles, thereby enabling continuous innovation.

To capture these opportunities, fintechs need an ecosystem of capabilities and partners that will allow them to move fast. First movers will accrue competitive advantage as they build their capabilities and mobilize with a focus on value, rather than rushing to deliver pilots. To do this, fintechs should consider investing more in people and change management, given generative AI’s unique potential to influence the future of work. Fintechs could think about developing a medium- to longer-term talent strategy and find ways to emphasize change management and adoption. Fintechs that delay building their capabilities risk becoming the disrupted instead of the disruptors.

To retain their competitive advantage, fintechs must continue to innovate. The next big disruptor is always around the corner. Technologies like generative AI are predicted  to revolutionize the competitive landscape of finance over the next decade (see sidebar “Generative AI and the future of banking”). WeBank’s CFO Arthur Wang is one executive who appreciates the urgency. He told us, “Even though our bank has been around for almost eight years, we consider ourselves a start-up. We’re always exploring better fintech technology. WeBank’s strategy is to provide better, more inclusive financial services—to the mass population as well as small and medium-size enterprises—with leading technology. We do business 100 percent online, so we rely on technology.” 30 See “ Making financial services available to the masses through AI ,” McKinsey, August 9, 2022.

A tight labor market has also made it more challenging for fintechs to attract and hire tech talent. Our survey uncovered a shift in the perception of fintechs as riskier employers. As a Europe-based fintech executive told us: “Fintechs are less attractive now because it is clearer that it is a ‘high risk’ job compared with established institutions. On the other hand, large fintechs are laying off, which can create a new pool of talents to attract.”

In such an environment, fintechs must work toward strengthening their culture and mission and, consequently, their hiring strategy. One European payments fintech, for example, has differentiated strategies based on the profile of open roles. An executive at the firm says it has been easier to recruit people for junior roles, since these workers are more eager to join a growing organization. “It is a different story with experienced profiles—for example, management team or 35-plus years—where recruiting is more difficult and retention is crucial,” he said. To attract such people, the firm offers stock options and other incentive packages. Meanwhile, an Africa-based payments and remittances fintech casts a more global net: “We hire globally, regardless of location, gender, or race,” an executive told us. “We have no quotas and try to just find the best person for each role.”

The fintech industry is undergoing a sea change, so players will have to evolve to survive. Approaches will vary, depending on each fintech’s maturity level and its vertical and geographic focus. The framework for sustainable growth, described in this report, provides a strong foundation:

• Measured growth based on a stable core. Ensure there is a strong and stable core business with a targeted and proven market fit before expanding, rather than trying to grow while strengthening the core.
• Programmatic M&A. Pursue M&A strategically and establish mutually beneficial partnerships based on a programmatic strategy rooted in value sharing (with incumbents and other fintechs), as opposed to pursuing M&A only as a response to a low-valuation environment.
• Cost discipline. Control costs to withstand the new funding environment while remaining flexible, nimble, and compliant.
• Keep the culture alive. Maintain the agility, innovation, and culture that have been the bedrock of disruption so far.

Decisions taken today will likely set the pace for fintechs over the mid to long term. The present conditions therefore call for a careful evaluation and focused implementation.

Lindsay Anan is an alumna of McKinsey’s San Francisco office, where Alexis Krivkovich and Marie-Claude Nadeau are senior partners; Diego Castellanos Isaza is a consultant in the London office, where Fernando Figueiredo is a partner and Tunde Olanrewaju is a senior partner; Max Flötotto is a senior partner in the Munich office; André Jerenz is a partner in the Hamburg office; and Zaccaria Orlando and Alessia Vassallo are associate partners in the Milan office.

The authors wish to thank Sonia Barquin, François Dorléans, Carolyne Gathinji, Eitan Gold, Carolina Gracia, Sheinal Jayantilal, Uzayr Jeenah, Yelda Kayik, Mayowa Kuyoro, Marina Mansur, Farid Minnikhanov, Bharath Sattanathan, Rinki Singhvi, and Katharine Watson for their contributions to this report.

This report was edited by Arshiya Khullar, an editor in the Gurugram office.

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