How to Start a Fintech Company: a Step-by-Step Guide

The FinTech industry is one that has continued to grow from strength-to-strength, regardless of the world economic outlook or major events.

Many regard the birth of FinTech to have come in 2005, when online peer-to-peer lending was popularized with Zopa, but it has come on leaps and bounds since then. Almost any financial product or service can be accessed online and remotely, to the point where brick-and-mortar establishments could soon become a thing of the past. 

By the end of 2021, Fintech investment reached $210 billion in the United States, and there’s no exclusivity when it comes to having a good business idea in the field of fintech. As mentioned above, due to pure accessibility to the internet, simply anyone can start a fintech business.

So, if you think you have a good business idea in the fintech industry, this step-by-step guide should help you to get it off the ground:

1. Understand your industry and its regulations

The first thing to note is that fintech and the general financial services industries are highly regulated, and for good reason. 

“In our niche, predatory lenders are big exploiters of vulnerable Americans, and so it is our job to ensure that our lenders are fully compliant with both state and federal regulations”, commented Ben Sweiry, co-founder of online fintech startup Dime Alley.

In order to keep your fintech business on the right side of the law, you need to know the ins and outs of what is a highly complex sphere, including the regulatory authorities, laws – both state and federal, legal limitations and requirements.

2. Discover your USP or niche

Fintech may be a relatively new term in a lot of peoples’ vocabularies, but that’s not to say it’s a small field; quite the contrary. There are lots and lots of different fintech-based services that you could provide and so it is crucial that you find your USP – what will set you apart from the competition?

To be competitive and have a chance of being successful, you could start by researching the new products or services which can be developed or perhaps try to analyse the problems that consumers are facing, and how your service or product can alleviate them.

3. Make a business plan and identify how much capital you will need

As easy as it may seem to start an online fintech business, getting a startup off the ground isn’t cheap, especially if you want to be successful, and so it is essential that you make sure you are financially ready to start a company.

A good way to start is to write a business plan – it will help your fintech startup get organized. Do not hesitate to ask for help from experts to write a good business plan, as they often have been-there-and-done-it.

There are lots of different ways that you could raise capital for your fintech startup; from bank loans to crowdfunding to venture capital, etc… You could even look into borrowing money from your family or friends if they believe in you and your idea.

Regardless of your path, you should try and have something to show to your potential investors, hence why a business plan and perhaps even a visual prototype would come in handy.

How to Start a Fintech Company: a Step-by-Step Guide was last updated November 26th, 2022 by Emma Grant