Fintech is heading toward becoming an approximately $700 billion industry by the end of this decade. Consequently, we are witnessing the rise of new fintech leaders worldwide almost every day. Fintech firms are no longer just enablers of technological disruption. Rather, they have become deeply ingrained with the incumbents, enabling them to upgrade their products and services and become technologically resilient.
This represents a paradigm shift in the financial industry as the line between traditional banks, NBFCs, and fintech players continues to blur. Consequently, aspiring fintech leaders in India and abroad aren’t sure of having a free hand with customers. What were once typical fintech innovations have now shapeshifted into a financial sector necessity. Think blockchain or AI analytics. So, what can nascent fintech leaders do to stand out from the crowd and ensure sustainable growth?
Here are four tactics to adopt in your strategy to become an industry leader and value creator in fintech.
1. Create value first, revenue later
While the fintech industry may be rife with opportunities to make profits, only those fintech leaders who can deliver true value to customers first gain market supremacy. This comes not from parroting your products or services as per what is already established in the sector but from using innovation to solve an unmet market requirement. Your product could target untargeted geographies or find a way to personalise a financial product unlike before. Once it has gained your audience’s approval, you should focus on monetising it for profitability.
Vijay Shekhar Sharma – the Founder of PayTM – is a prime example of value creation in fintech through an innovative, differentiated product offering. At a time when cash was being demonetised in India, and the rate of digital adoption was skyrocketing, he found the perfect recipe for fintech success in his digital payments platform. Something as simple as a digital wallet offered millions of people an unprecedented way to transact faster, seamlessly, securely, and more conveniently. Today PayTM is a $2.3 billion fintech market leader.
2. Contextualise your product for the market
In a country like India, the diversity in markets is unparalleled. What might work for the regular urban consumer might be incomprehensible for the underserved masses, or vice versa. Top company leaders can always identify the perfect product and market fit. This enables them to build products that are not only contextual for a market but also a high-potential, low-risk playground. Upcoming fintech leaders in India and abroad should follow suit.
Often merited with the tag of the ‘best fintech leader in India,’ Sanjiv Bajaj is the perfect example of playing to your market’s strengths to grow your business. With e-commerce bringing large swathes of first-time online shoppers to the fore, a need for consumer finance arose – especially amongst the tier 2 and below regions. At a time when banks and NBFCs were only offering quick loan approvals to existing customers, Bajaj Finserv made it a norm for even new customers. That meant a documentation-free, swift consumer durables loan within 30 seconds. This is one of the numerous examples of how Bajaj Finserv brought relevant digital finance products to underserved consumers, thus becoming an undisputed market leader in fintech.
3. Focus on 360-degree lifecycle management
Bajaj Finserv, PayTM, Razorpay – numerous examples of how the most successful fintech companies have risen to the top by not resting on their laurels. They all started from a single product or service and now comprise full-stack financial services platforms that are one-stop shops for all consumer needs.
The leaders behind these visionary fintech firms have relentlessly pursued the continuous refinement of their products and services. To be a successful fintech leader, your focus should be on continuously adding more layers to your product or service until it blossoms into a full-fledged, 360-degree finance ecosystem. That means focusing on the complete lifecycle management of your fintech portfolio, improving and expanding its scope with time in order to deliver the best user experience before your competition.
4. Identify and solve risks in advance
Lastly, aspiring fintech leaders in India should always look to be one step ahead of risk compliance. Given that fintech products and services can be susceptible to varying degrees of risk, including cybersecurity, regulatory, or financial, CXOs must build robust contingencies to protect both the business and the stakeholders.
With Razorpay handling hefty and critical cashflows from businesses all over the world, risk mitigation and fraud prevention is key. That is exactly what Razorpay Co-Founder and CEO Harshil Mathur has done. He is one of the most prominent fintech leaders today, thanks to his one-of-a-kind full-stack payment and financial solutions provider catering to over 300 million customers, including businesses. Harshil Mathur has led the development of multi-factorial risk mitigation for ultimate customer satisfaction – including in-built ‘Risk’ logic and stringent protocols for early fraud detection and monitoring.
Industry insiders are not surprised by the speed of fintech’s growth. It has naturally resulted in the rise of many fintech leaders in India and abroad. While the opportunity to grow rapidly and scale up is tempting, aspiring fintech leaders should exercise patience in their businesses.
The likes of Sanjiv Bajaj and Vijay Shekhar Sharma have been able to cement their success in the industry due to their unwavering focus on building sustainability and chasing long-term goals over short-term opportunities. This proves to be the best mantra for all new entrants looking to become top innovative leaders in fintech. Give it time, aim for differential value creation, contextualise your products, improve it continuously, and stay on the right side of risk compliance – and you have your proven path to industry leadership.