In a recent blog post, we argued the Fintech sector would be a prime area of startup activity in 2021, partly because of the accelerating influence of the pandemic on financial innovation. Fintech’s reach across so many industries – banking, consumer payments, insurance, asset transfer/custody, capital markets, real estate, etc. – means social distancing and work-from-home orders have placed even greater attention onto contactless transactions of all kinds. Add in the blossoming crypto/DLT/distributed finance ecosystem, and we think the sector is set to accelerate this year.
While Fintech startups face the same competitive hurdles as any others – the technological and financial resources necessary to launch a new company today are tiny compared with a decade ago – it can be an especially complicated sector for new entrants. That’s because financial innovation is typically aimed at making an old, outdated process more efficient through the application of modern technology, removing middlemen, or both. Key Fintech industries like banking and securities trading boast some of the most deeply-entrenched incumbents of any sector, and they have extraordinarily deep pockets with which to defend their turf.
Also, Fintech companies often face significantly greater regulation than those in other areas of startup innovation. They have to manage a dizzying web of regulations that strictly govern their behavior, products, activity, customers, funds (or a combination of all five), and often face intense scrutiny well before launch. They must also face shutdowns, fines and jail time if they get the regs wrong, a compliance imperative that puts Fintech in select company along with healthcare & biotech. There is a flip side, though: While regulation is frequently cited as a key barrier to entry for Fintech startups, the patchwork of antiquated rules and requirements from different local, state and national jurisdictions also gives the sector some of its greatest potential.
To help Fintech startups navigate the complexities of their environment, we’ve pulled together a short list of recommended resources for industry insights, trends, answers to common questions, data & information, tools & templates, and startup best practices.
Recommended Resources for FinTech startups:
- Finovation Squad Resource Center – Docs, resources and recommendations
- The Financial Revolutionist – Insights & Intelligence for Fintech startups
- Finextra – News coverage around Fintech, also available as a daily newsletter.
- Fintech Insights Blog – Sector news and trends
- FT’s Alphaville – Well-known daily news and commentary for financial market professionals, useful for market & product opportunities.
- Wharton Fintech – Forum for investors & founders in Fintech
- Provoke.fm – home to Breaking Banks, the highest-ranked and longest-running Fintech radio show/podcast https://provoke.fm/show/breaking-banks/
- Plug & Play Fintech Center – Fintech section of the well-known startup accelerator
- Fintechsandbox – helping Fintech startups with data feeds & APIs.
- Tearsheet – focused exclusively on tech’s impact on financial services. Home to a great resource directory
- Bank Innovation – Provides a range of content around innovation in financial services.
- Pymnts.com – Must-read resource for the the latest in payments and commerce.
- DBNOMICS – Free platform aggregating publicly available economic data by national and international statistical agencies, researchers and private companies
- Top Fintech accelerators
- Top Fintech seed investors
- Empire Startups – community of Fintech entrepreneurs, investors & innovators
- Regulatory resources:
- FINRA’S Key Topic page for Fintech
- SEC’s Finhub – Strategic Hub for Innovation and Financial Technology
- 7 Things Every Fintech Founder Should Know about Regulation