What is the secret of the fact that someone tore the People's Choice Award, and someone went like a stone to the bottom?
The fintech industry is dawning like never before. Investments, cryptocurrencies, cashbacks and other similar concepts have come into common use, and not only by millennials. But how much effort and money do you need to invest in order to establish and develop your own project? Let's look at the example of neobanks, which have become the most vivid and frequent example of a fintech startup.
All founders understand that the main tasks are to create a team, obtain a license and start writing software. Everything, it would seem, is simple: IT specialists, lawyers, managers, the platform and the burning eyes of the owners who believe in their offspring ... but no, the project was launched, but there are no clients.
Here are the main reasons why the project may not live up to expectations:
1. Not all startups at the beginning of their journey saw the future and realized the needs to support the project. One of the development strategies in this segment is to attract substantial investments round by round in order to hone the excellence of the service and software product to attract more users. Does everyone manage to keep the interest of investors from year to year? The answer is obvious.
2. The high cost of software. Fintech is, first of all, a software product, the budget for writing of which sometimes exceeds $ 500 thousand, respectively, not all startups are ready to bear such costs until the company reaches self-sufficiency.
3. Competition. The mechanism of a business project in this area must flexibly respond to the challenges of our time and be in trend, offer the best conditions on the market and put service at the fore, otherwise it is doomed to failure. This includes everything related to nfc, blockchain, cryptocurrencies, etc.
4. Compliance with the requirements of the regulator. Despite the relatively simple process of obtaining a license, the legislative norms are quite directive and compliance with them also requires significant costs, for example, modern methods of identifying users by the retina of the eye, or bringing operational activities in line with the conditions of financial monitoring.
5. Also from SBSB's own practice, I will say that the second project in 2020-21, to obtain an e-money license, is frozen due to internal contradictions between the owners. And even when the company has already been created and the documents are ready, the project is “on the wrong foot” due to personal inaccuracies at the beginning of the partnership. Therefore, it is very important to consciously choose partners, making sure that you speak the same language, have the same values and expectations from joint activities.
If we go back to statistics, then, as of 2020, 84 payment licenses were issued in the UK, 23 licenses in Lithuania, third place behind Spain with 9 licenses and in 4th place - Germany and Sweden with 7 PIs, and at the bottom of the rating Estonia with 3 issued PI licenses. But we all understand that the issuance of licenses does not mean the actual opening of 84 or 23 neobanks in a particular country. And only a few of them really win the recognition of consumers and go out to recoupment and profit.
The fintech industry is dawning like never before. Investments, cryptocurrencies, cashbacks and other similar concepts have come into common use, and not only by millennials. But how much effort and money do you need to invest in order to establish and develop your own project? Let's look at the example of neobanks, which have become the most vivid and frequent example of a fintech startup.
All founders understand that the main tasks are to create a team, obtain a license and start writing software. Everything, it would seem, is simple: IT specialists, lawyers, managers, the platform and the burning eyes of the owners who believe in their offspring ... but no, the project was launched, but there are no clients.
Here are the main reasons why the project may not live up to expectations:
1. Not all startups at the beginning of their journey saw the future and realized the needs to support the project. One of the development strategies in this segment is to attract substantial investments round by round in order to hone the excellence of the service and software product to attract more users. Does everyone manage to keep the interest of investors from year to year? The answer is obvious.
2. The high cost of software. Fintech is, first of all, a software product, the budget for writing of which sometimes exceeds $ 500 thousand, respectively, not all startups are ready to bear such costs until the company reaches self-sufficiency.
3. Competition. The mechanism of a business project in this area must flexibly respond to the challenges of our time and be in trend, offer the best conditions on the market and put service at the fore, otherwise it is doomed to failure. This includes everything related to nfc, blockchain, cryptocurrencies, etc.
4. Compliance with the requirements of the regulator. Despite the relatively simple process of obtaining a license, the legislative norms are quite directive and compliance with them also requires significant costs, for example, modern methods of identifying users by the retina of the eye, or bringing operational activities in line with the conditions of financial monitoring.
5. Also from SBSB's own practice, I will say that the second project in 2020-21, to obtain an e-money license, is frozen due to internal contradictions between the owners. And even when the company has already been created and the documents are ready, the project is “on the wrong foot” due to personal inaccuracies at the beginning of the partnership. Therefore, it is very important to consciously choose partners, making sure that you speak the same language, have the same values and expectations from joint activities.
If we go back to statistics, then, as of 2020, 84 payment licenses were issued in the UK, 23 licenses in Lithuania, third place behind Spain with 9 licenses and in 4th place - Germany and Sweden with 7 PIs, and at the bottom of the rating Estonia with 3 issued PI licenses. But we all understand that the issuance of licenses does not mean the actual opening of 84 or 23 neobanks in a particular country. And only a few of them really win the recognition of consumers and go out to recoupment and profit.
