Ultimate Guide on How to Start a Fintech Startup in 2022

  • Assim Gupta
  • Jan 5, 2022
  • 7 Min Read
How to Start a Fintech Startup

Article posted by

Assim Gupta

CEO

Assim Gupta is the CEO and Founder of Closeloop, a cutting-edge software development firm that brings bold ideas to life. Assim is a strategic thinker who always asks “WHY are we doing this?” before rolling up his sleeves and digging in. He is data-driven and highly analytical, yet his passion is working with teams to build unexpected, creative solutions that catapult companies forward.

Let’s Connect

Fintech or financial technology has become one of the most popular ideas for startups today. In this era of digital transformation, everything has shifted online, and financial businesses are no different. To offer a convenient experience to customers, almost every financial organization and bank are digitizing themselves.

As a result, people can transact online seamlessly, do online shopping, purchase online services, make subscriptions, and do much more. No longer do people need to visit banks to deposit money or transfer amounts to others. Everything can be done at your fingertips within a few clicks.

In addition, there are online platforms to buy and sell cryptocurrencies like Bitcoin & Ethereum, invest in the stock market to buy shares, raise funds for startups, manage personal finances, take loans, mortgages, etc. All these have become possible because of financial technology.

As a result, the number of fintech startups arriving in the market is increasing rapidly. If you are looking forward to building a fintech app in 2022, you must know exactly what is a fintech startup, how to start a profitable fintech business, and important things to consider. In this write-up, you will find the answer to all such questions.

What is a Fintech Startup?

A startup that uses modern technologies like cloud computing, artificial intelligence (AI), big data, and more to create solutions that cater to financial requirements is known as a fintech startup.

Basically, the role of a fintech startup is to innovate the traditional financial solutions to improve customer experience, bring new ideas that can benefit people, and transform businesses.

For instance, a mobile banking application can make it convenient for users to transact online, pay online to eCommerce sites, recharge mobile phones, pay bills, and do much more without having to visit the respective bank. This is one of the top trending fintech startup ideas today.

Almost everyone uses smartphones and internet services today. In such an era, fintech platforms are rising and catering to the needs of the users.

Important Fintech Statistics You Must Know

One question that comes to mind when investing in fintech business ideas is whether this market is growing or not. What is the future of the fintech market? Will the investment be worthwhile?

On that front, the stats show that the financial technology market has been growing at a fast pace over the last few years, and this growth is expected to accelerate further over the coming many years.

As per Statista, the number of fintech businesses is growing significantly. For instance, there were 5,686 fintech startups in the US in 2018, which reached 10,755 in 2021.

fintech startups in the US 2021

According to Research And Markets, the value of the fintech market around the world was $2767 billion in 2016. It is expected to witness a growth of 27.5% CAGR and reach $31,503 billion by 2026.

global fintech market by 2026

Juniper report says that 53% of the global population will be using digital banking solutions by 2026.

Things to Know Before Starting a Fintech Startup in 2022

For those wondering how to start a fintech startup, here are the essential steps to consider:

1. Find Your Fintech Business Niche

This is the first towards kickstarting a fintech startup, as with almost any other business. You need to decide which niche to choose.

Fintech itself has a broad range of business niches or verticals. Before stepping into this market with a business idea, you need to have a crystal clear vision about the niche, target market, as well as the problems that your business is going to address.

For instance, you can choose to develop a cryptocurrency exchange app. This kind of app allows users to buy a cryptocurrency like Bitcoin and Ethereum, sell it whenever wanted, and make profits. You can earn a commission from every transaction made on the app. There are definitely several more ways to monetize it.

Some of the most popular niches in the fintech market include insurtech, crypto exchange, crowdfunding, personal finance management solutions, stock trading, digital wallets, and money lending, just to name a few. 

2. Brainstorm Your USP

Once you have decided on your fintech niche, the next step is to find the competitive advantage or the unique selling point that your business is going to offer. There are numerous similar startups in the market that are providing the same solutions like yours. What will make your startup stand apart from the competitors?

You need to find the answer to this question to attract more users or consumers to your solution. Start with knowing the top competitors in the market. Use their platforms and get a thorough understanding of what they are doing, what are their unique features, how they onboard users, and what they are doing to stay competitive.

For instance, money lending apps provide loans to users without the involvement of banks or financial businesses. The challenge for people is that bank loans are not easier to take, and they check their credibility. Online money lending apps or platforms provide loans without difficult criteria like banks.

Similarly, you need to evaluate what additional you can offer, or what other challenge you can address with your fintech startup.

You Must Follow These Steps to Develop a Feature-Rich Mobile App

3. Understand the Rules & Regulations

The rules and regulations are high and complicated in the financial industry. Hence, you need to be aware of all ifs and buts of the regulations that you need to meet and stay compliant with. There are legal and regulatory authorities, laws, limitations, and needs that you can’t avoid.

For instance, if your target market is European countries or regions, you need to comply with General Data Protection Regulation or GDPR. For fintech startups in the US, meeting the requirements of anti-money laundering (AML) policies is a must.

There are several more regulations like Know Your Customer (KYC), PCI-DSS, etc. Research and understand these regulations properly before stepping into the fintech market. In case you violate any rules and regulations, it can land you into legal disputes and get your business shut down.

4. Build a Team

To become a successful business in the fintech industry, you need a team of skilled and talented people. Your team will be responsible for developing the solution, creating marketing strategies, finding unique and innovative ideas to grow in the market, managing the cash flow, etc.

If you are looking to build a mobile app, you need to choose a fintech app development company. The company will develop the application for you according to your business idea.

Outsourcing some of the core tasks is vital for budding startups because hiring the right talent in the initial phase of your startup is a tedious task. For instance, you can outsource web/app development, digital marketing, etc. This not only helps you get the work done with expertise but also saves time and cost of hiring the team. 

5. Go For an MVP (Minimum Viable Product)

MVP or Minimum Viable Product is the basic version of your online platform or mobile application. In the MVP version, it will have just the minimum features and functionalities.

The role of creating an MVP is that you get more clarity about the solution, roll out the app to specific users for testing in real-life, pitch to investors for funding, and focus on the core functionalities.

In addition, the MVP can be developed in less time and at a low cost. Once you have the clarity in vision, and feedback from users and investors, you can then proceed to the final product release. Good companies that offer fintech app solutions help you with both the MVP and final product development. 

6. Raise Funds or Find Investors

Now that you are done with finding the niche, knowing the USP, hiring the team and app development company, and a functional MVP, the next important thing is finding the investors. Fintech startups need significant investment. You need to raise funds to jump into the market.

It is time to pitch your fintech business idea to the investors. For this, create a list of investors who are likely to invest in a fintech startup and send them your idea with full details. Be ready with an excellent presentation, demo of your solution, and monetization strategy.

7. Launch the Business & Keep Innovating

Once you have followed the steps above and found the investors, it is time to hit the market with your innovative fintech startup idea. This market is flourishing and will need your full dedication to ride on the top of the waves.

Observe the analytics of customers, take care of the customer feedback and address their challenges. Keep making your solution more innovative by adding advanced features, and functionalities, and focusing on user experience, to become competitive.

Wrapping Up

These are some of the essential steps that you need to consider to start a fintech startup in 2022. Your business idea should be unique, have some USP, enticing user experience, and a skilled workforce who can manage things well and keep your startup innovative and thriving. Laws and regulations are things that you simply can’t ignore.

Latest Technology Insightstitle icon

Stay abreast of what’s trending in the world of software development with our well-researched and curated technology blogs.

Outsource UI/UX Creation

UI/UX Creation – One of The Most Important Development Parts You May Want to Outsource

Have you ever considered hiring a UI/UX design agency? If not, this blog will tell you all the …

agile methodology for software development

Adopting Agile Methodology will Drive Faster Results - Explore How?

Today, businesses are continuously looking for new methods to remain competitive in the face of…

 Augmented Reality to Help Businesses

8 Clever Ways Augmented Reality Can Help Your Business

In this tech-savvy world where everyone is keen to know the latest trends in technology, it is …

saas vs custom sooftware solution

SaaS vs Custom Software Solution - Which One Fits Right for Your Business?

In the year 2022, it will be almost impossible to successfully manage a business, either a smal…

How to Develop a Feature-Rich Fintech App

How to Develop a Feature-Rich Fintech App in 2022

Technological advancements significantly impact various business sectors, and financial technol…

guide-on-hiring-the-best-web-development-agency

How to Hire Web Development Agency - Step-by-Step Guide

Building a successful website from scratch requires a lot of labor and, at the very least, desi…

How to Implement DevOps for Enterprises

How to Implement DevOps for Enterprise - Everything You Need to Know

The perpetual switch from the following technologies makes the business environment much more c…

AWS training & certification exam

Elevate Your Cloud Computing Career with AWS Certification Exams - Details Inside

The Amazon Web Services Certification program helps professionals gain credibility and self-ass…

dating-app-development-solutions

The Estimated Cost of Developing an Ideal Dating App

When it comes to finding love, you don't need to go any further than your cell phone. In today'…

Netsuite-ERP-implementation

How Implementing Netsuite ERP Can Position You Strongly in Your Industry

You might think you have plenty of time to figure out the migration to NetSuite, but honestly, …

music streaming app development

A Thoughtful Guide on Music Streaming Apps- How to Create One, Features & Cost?

Music runs through the veins of most people, if not all. It is a significant part of our routin…

benefits to migrating your existing applications to the AWS cloud

Migration to Cloud Computing - AWS is the Best Choice

The world is progressing towards portable technologies, from mobile phones to remote work, to a…

How to Create User-Centric Enterprise UX Design

How to Create User-Centric Enterprise UX Design Effectively?

Technology is a wave: either sail the boat or sink out. The enterprises focused on automating b…

iot in electric vehicles charging stations

The Evolution of IoT in EV Charging Stations

The Internet of Things is another revolution in the technology world, leaving us wondering how …

Choose-react-native-for-mobile-app-development

Why to Choose React Native for Mobile App Development

With about 60% of the global population actively accessing the Internet, people need modern way…

website-redesign-cost

Combinations and Permutations of Calculating Website Redesigning Cost

Determining the successful user data interactions and conversations is significant in revamping…

Professor-Rana-Nayar-visit-to-closeloop

Professor Rana Nayar - A Visit to Closeloop Technologies

Professor Rana Nayar, a Ph.D. in English, a translator of poetry and short fiction from Punjabi…

netsuite for businesses to control and manage ERP

NetSuite for Small, Medium & Large Businesses - For Enhanced Effectiveness and Control

Enterprise Resource Planning (ERP) solutions are the lifeblood of a business organization. Nets…

cloud computing in fintech

Cloud Computing Shaping The Future of Fintech

Financial technologies are taking the business world by storm. The changing perception regardin…

 salesforce crm solutions for healthcare

Salesforce - Leading Player in the Game of Healthcare Management

In the healthcare sector, a cyclone of technology is impacting thousands of lives today. From A…

Custom ERP Software Development for Business Automation

Custom ERP Software Development - Ultimate Solution for Business Process Automation

In the dynamic world of business applications, one fixed solution for the constantly changing e…

cross platform app development using flutter

Flutter App Development - The Future of Modern-day Cross-platform Apps

While mobile devices were increasing significantly, the demand for mobile app development servi…

custom mobile app development process

Custom App Development Process - The Complete Guide

Whether big or small, businesses from different industries and start-up founders are taking cha…

cloud computing in logistics - benefits and limitations

Role of Cloud Computing in Logistics in 2022 - Benefits & Limitations

Cloud computing is one of the hottest technologies in this era of digital transformation that i…

mobile application development steps

6 Essential Steps You Must Follow to Develop a Feature-Rich Mobile App

We are living in a technology-driven world where almost everything is available at our fingerti…

Salesforce CRM Pros & Cons for Businesses

Is Salesforce CRM the Best Choice for Your Business? Pros & Cons

Customers are the most important part or lifeblood of a business. The way you onboard customers…

eCommerce store development With Shopify

Ultimate Guide to Build Profitable eCommerce Store With Shopify

To start an eCommerce business that becomes successful, the first step is to develop an enticin…

Recruiting Software Development

Is Your Recruiting Software Ready for the Future of Work?

Recruiting software is a critical part of Human Resources Management (HRM). Basic functionality…

Top 5 Roles in Your Software Engineering Team

Are These 5 (Minimum) Roles On Your Engineering Team? They Should Be!

It can be very challenging and overwhelming to develop technology and software for a non-tech o…

Being Cheaper is Not a Competitive Advantage

Being Cheaper is Not a Competitive Advantage

As someone who attends dozens of startup pitches a month, “our product is cheaper” is a phrase …

Case Study: 6-Months in and Software Vendor Causes $160,000 Loss

Case Study: 6-Months in and Software Vendor Causes $160,000 Loss

PACEfunding’s Business Executive Is Shocked When The Vendor He Hired Fails To Deliver The Softw…

Control and Fear Aren't Your Company's Only Growth Problem

Control and Fear Aren't Your Company's Only Growth Problem

The Invisible Crushing Power of Software Why are companies afraid to partner with the vendors …

Software Bugs Risk $1.7 Trillion in Assets

Software Bugs Risk $1.7 Trillion in Assets

Painful Lawsuits: Huge Toll Taken on Executives at Uber, Equifax, St.Jude, and Provident Financ…

Startup Pitch Event, November 9th, 2017

Startup Pitch Event, November 9th, 2017

As my regular readers know, I frequently serve as a panelist in pitch events. Recently, I decid…

Startup Pitch Event, October 30th, 2017

Startup Pitch Event, October 30th, 2017

As my regular readers know, I frequently serve as a panelist in pitch events. Recently, I decid…

Startup Pitch Event, October 11TH, 2017

Startup Pitch Event, October 11TH, 2017

As my regular readers know, I frequently serve as a panelist in pitch events. Recently, I decid…

Startup Pitch Event September 26th, 2017

Startup Pitch Event September 26th, 2017

As my regular readers know, I frequently serve as a panelist in pitch events. Recently, I decid…

How Can MoviePass Be So Cheap?

How Can MoviePass Be So Cheap?

MoviePass caused major shifts in the movie industry when they lowered their monthly unlimited m…

User Experience is Key

User Experience is Key

There is nothing more tragic than a company with a great product that is hampered by poor user …

Investors Aren't Afraid of Smart Tech Outsourcing

Investors Aren't Afraid of Smart Tech Outsourcing

One of the most misunderstood fears entrepreneurs and startups have is that investors won’t inv…

Three Software Mistakes That Strangle Startups

Three Software Mistakes That Strangle Startups

I love meeting people who launch startups. Their energy and ambition inspire me. One of my life…