I had the opportunity to be part of some inspiring roundtables during the MoneyX Conference that took place as part of this year’s @WebSummit. While talking with large financial institutions, I noticed a rather specific approach that their representatives have towards innovations and investing in tech trends. That’s something that is definitely crucial for startups who want to work with banks and fin-tech companies!
Divante’s roots are in eCommerce but we see more and more clients approaching us from the financial world. They are especially interested in our @Open Loyalty solution, which is a platform for increasing and managing customers’ loyalty. It was a truly valuable experience to exchange knowledge with successful fin-tech companies and banks.
I wrote down some insights for all startups that aspire to work with banks and fin-tech companies.
Five insights for fin-tech startups
1. Begin with small institutions
Do not start with the biggest industry players. You won’t be important to them. Start from smaller, local banks and establish a strong strategic relationship to gather representative case studies for your portfolio.
2. Avoid serial killers
Some big banks are serial startup killers as they don’t have shortcuts for signing a deal. The average time needed to close a deal with a bank is about two years. With an innovation department on the spot, this could be shortened to three months.
Innovation departments could be your strongest ally if they are in good contact with the business’ internal sponsors. You need to make sure that there’s a real readiness for that in the organization. Otherwise, you can spend a lot of time with the innovation team without any positive outcome.
3. Analyze local law regulations
Startups usually don’t know existing local regulations, and sometimes this is a real dealbreaker at the final stage of a deal closing. Be sure you know beforehand all the regulations which apply to your client’s country.
4. Examine the local competition
Check the latest press-releases and see who is working with startups and in which segments of the market. Just be aware that banks like to show-off. Some of them just release news and do nothing. Be sure you can count on a partnership on every level – starting from sharing know-how and ending with efforts in sales.
5. Avoid integrations
If a bank can use your software without integrating it, this is great. Integrations could block any implementation for years. There was a case of one of the better scoring tools, where they started by just sending the client’s score by email.
Successful financial startups do things that are easy to achieve for startups but hard to manage for banks.
One of the startups that became successful in the fin-tech world is TradingView. They managed to win deals with the banks because they proposed easy to use, yet beautiful software for financial data visualization. And that was a thing that everyone needed.
What other successful examples are out there?
Please share your thoughts in the comments :)