Experts Share What To Consider When Running A FinTech Startup

The State of European Fintech 2024 report has been released, and the UK is really doing well as a leader of the region. The report shows that the UK’s funding for finch went up 3%, making the value £2.2 billion, a big increase from the £1.9 billion in the first half of last year. There seems to be a general decline in fintech funding across Europe, though.

Aman Ghei, Partner at Finch Capital, said, “The challenges that fintech faced in 2023 were necessary for the sector to mature and become more sustainable. While funding may be down overall, and unicorn chasing has slowed, there is plenty of opportunity for companies that are capital efficient and have a clear path to profit.”

 

How Is AI Helping Europe’s Fintech Sector?

 

The report shows that AI is becoming a fundamental part of the fintech industry, especially in insurance. Over the next few years, many executives in the industry plan to invest heavily in AI, to help with operations, and making tasks for efficient.

Ghei commented, “With AI transforming the industry and significant dry powder still available, the next 12-18 months will mark a turning point for fintech in Europe. The next wave of fintech success stories will likely be built on sound financials rather than rapid revenue growth alone.”

 

How Is The UK Fintech Startup Scene?

 

The UK fintech startup scene is expected to see major growth in the coming years. With the rise of neobanks, and in investors, the industry will begin to see a trend. Mondo and Revolut’s success is a testament to the possibilities that present for startups in the country.

Experts have put together very insightful tips on what to consider when running a fintech startup:

 

Our Experts:

 

• Matt Ford, Co-founder and CEO, Sidekick Money
• Tiago Veiga, CEO, Aurum Solutions
• James Toledano, COO, Unity Wallet
• Hayden Smith, Head of Venture and Private Debt, Fuse Capital
• Kyrillos Akritides, Co-Founder and Managing Director, Schwarzwald Capital
• Eyal Moldovan, Co-Founder and CEO, 40Seas

 

Matt Ford, Co-founder and CEO, Sidekick Money

 

 

“Understanding your customers is critical. Focus on how technology can solve real-world financial problems for your users. Building a product that genuinely simplifies personal finance through transparency and data-driven insights is key to success.

“Regulations aren’t just hurdles—they’re opportunities. Compliance with financial regulations is non-negotiable, but see them as positives – a surefire way to build trust and create a more secure, reliable service for your customers.

“Simplicity always wins. In a crowded fintech landscape, try to strip away complexity, making financial tools easy to use, especially for the everyday person who may not be a finance expert.”

 

Tiago Veiga, CEO, Aurum Solutions

 

 

“First and foremost, people are everything. In order to give customers the best and most innovative solutions, you need to ensure that your team is happy and working to optimum levels. There’s no science behind this, but taking the time to truly understand what people need to be productive – whether that be automation assistance or flexibility – and ultimately feel valued, goes a long way. Anyone who runs a fintech company will know that staff retention usually correlates to a low customer churn rate. If you take care of your people, then the clients take care of themselves.

“On the more operational side of things, it’s important to scale sustainably. Fintechs often try to run before they can walk; many are so focussed on delivering cutting-edge customer experience and new, innovative features that this can come at the expense of proactively investing sustainably in the back-office. This can be problematic for fintechs, especially when back-office infrastructure is vital to meeting regulatory requirements. Given that these back-office systems are responsible for functions such as safeguarding client money and preventing fraud, it is vital they are developed in tandem with front-end technologies to meet evolving regulatory demands.

“Finally, fintechs need to have a clear value proposition if they are to have long-term success. Sometimes, fintechs fall into the trap of trying to address too many problems at once, which can blur what the proposition actually is. Being able to fill a clear gap in the market with laser-focussed expertise, and having the ability to communicate this to prospective customers, is usually more beneficial.”
 

 

James Toledano, COO, Unity Wallet

 

 

“Focus on letting the market dictate what your product should be i.e. give users features and tools that have real utility that address user pain points and enhance their user experience. Fintech businesses need to make products that are highly intuitive, secure, and that feel personal.

“We must also be careful to not simply leverage emerging technologies like AI just for the sake of it. We must always use user-centric thinking and ask ourselves “does this really benefit our users.

“We must also be transparent around security and data privacy in order to maintain trust with users. Fintech companies can stand out by prioritising financial inclusion and offering innovative products that bridge gaps in accessibility and convenience.”

How can fintech founders effectively manage risk, both in terms of technology and market exposure?

“They must prioritise robust cybersecurity practices, regulatory compliance, and regular system audits to mitigate technological threats. It is also important to educate users around the threats posed by bad actors too, they are usually the fist line of defence outside of a direct attack on the business.

“Diversifying product offerings and revenue streams, closely monitoring market trends, and conducting thorough due diligence can reduce market exposure risks. In the case of fintechs and centralised exchanges, maintaining strong liquidity reserves should be the top priority to avoid FTX type scenarios.”

 

Hayden Smith, Head of Venture and Private Debt, Fuse Capital

 

 

“In today’s (highly) saturated Fintech market, true innovation is the key to standing out. Successful founders must identify genuine pain points in the financial sector that larger institutions have overlooked or are too slow to address. Focus on developing proprietary technology or unique business models that solve these problems in ways that are difficult to replicate.

“Build strategic partnerships with established financial institutions, but avoid becoming merely an outsourced development arm. Instead, leverage these relationships to scale your solution while maintaining independence and intellectual property rights. In the end, these partnerships will likely be your exit route!”

 

Kyrillos Akritides, Co-Founder and Managing Director, Schwarzwald Capital

 

 

“Fintech startups should consider how their product fits into the infrastructure of the industry for which it is being created and understand their customers’ needs. For example, in the creator economy, fintech startups should take into account the following:

“Flexibility in revenue models and monetisation options. Fintech solutions in the creator economy should integrate with various social media on which creators monetise their content. There are many platforms, and each has its own characteristics. This includes offering different revenue models and monetisation options.

“Adaptability to emerging technologies. The industry is growing very fast, so to stay competitive, fintechs will need to adjust. In some cases, this may imply flexibility in payment methods. For example, the integration of the emerging payment options like crypto.

“Fraud prevention. Startups need to focus on how to adapt banking services to the specifics of the audience or improve the security of financial transactions since the industry is still young and prone to fraud—the sector deals with a wide range of small and frequent transactions, making it vulnerable.

“Global reach but with localisation. In the case of the creator economy, the preference is given to global rather than local solutions since creators work in the international arena. Solutions should aim for international scalability but do not forget to include localisation when necessary — consider different languages and market conditions.

“Consider the particularities of the audience. It is obvious that the fintech tool for creators should differ from the standard ones not only functionally but also in terms of interface and language so that it is understandable to a young audience, many of whom are facing financial issues for the first time.”

 

Eyal Moldovan, Co-Founder and CEO, 40Seas

 

 

“When speaking to ambitious fintech founders, I always emphasise the importance of continuous learning and growth. Before setting out on a new entrepreneurial venture, it’s vital to pick the brain of more tenured peers in your network who have charted their own successful growth trajectory in the fintech arena.

“Don’t be afraid to put yourself in environments where you aren’t the smartest person in the room. The insights gained from experienced colleagues can provide critical foresight, helping young founders to navigate the hyper-competitive fintech field in which there is one universal truth: either evolve or get left behind.

“It’s essential to stay informed on the latest industry trends, regulatory frameworks, emerging technologies, and high-potential opportunities. Adaptability is key to both success and longevity in fintech. Many founders can launch a fintech product, but being scalable and profitable is far from a guarantee.

“Scalability is crucial to a fintech company’s success, determining the platform’s ability to handle growing demand, expand into new markets, and innovate at pace. Founders must put in the work to establish a clear roadmap that will resonate with investors as well.

“Additionally, the importance of fostering a strong company culture is often overlooked in the pursuit of market fit. Early-stage fintechs tend to focus heavily on product development, sometimes neglecting the imperative of building a motivated team that is unified around a clear, overarching vision.”