Some businesses make the mistake of believing that taking over the world equates to success. It can become a huge investment and distraction from their core business and customers.
In my experience, organisations that want to grow in the right way would usually benefit from three key things: 1) collaborating with like-minded businesses, 2) integrating innovative software from trusted providers, and 3) familiarising themselves with regional nuances. Taking those steps should help get your growth plans off to a good start.
Let me explain more about each of those.
Nuances can take several different forms. Navigating regulatory frameworks across different markets is a good example. This can be a real challenge and is often underestimated when a business gets too excited about its growth plans.
Each market may have contradicting requirements and regulations regarding card issuing. In some countries, you must be a bank to issue a card, but in others, you only need to be an electronic money institution (EMI) equivalent.
Asia-Pacific is a classic example of a region with rapid development, innovation, and opportunities in the fintech sphere. However, countries within that region all have different requirements. For instance, in Singapore, you must be an EMI or hold an MAS license to become a member of Visa or Mastercard and issue cards. However, in Taiwan, only banks can be card issuers.
Growing fintech can get bogged down by many details. That’s why collaboration is key when entering markets outside your core regions.
My advice is to use your network. Do some research and ask around to find partner organisations and industry leaders who have previously expanded into your target markets. Talk to people and assess their reputation and trustworthiness.
The complexity of the global financial regulation landscape can be extremely daunting, especially for FinTech start-ups. Working with trusted banking as a service (BaaS) providers is a good start in ensuring businesses comply with all laws and regulations.
BaaS providers offer compliant financial products to customers, reducing the risk of legal issues and fines so they can operate confidently.
Following this path will help fintechs develop a credible global footprint and reliable infrastructure and access innovations to help their solutions stand out in target markets.
That’s the wise way forward in my experience.
Arguably, the greatest cultural nuance when planning a globalisation strategy is cross-border payments, where both the sender and receiver are hit with high costs.
The industry needs to do a better job of solving this. It’s a barrier to efficient entry into new markets, diversifying customer bases, and ultimately hampering global growth.
Effective international localisation capabilities are essential for businesses to make payments quickly, instantaneously, and globally at low costs.
Take the regulatory environment post-Brexit as an example. Navigating these complexities requires robust solutions that can effectively remove barriers and costs, allowing FinTech companies to reach unserved global markets without compromising security and compliance standards.
Sudden fluctuations in demand can also challenge Fintechs as they look to scale. If they can’t cope, they may find their operations collapse and their reputation quickly damaged, especially in new markets.
BaaS offering is designed to help with demand increases, allowing scaling with minimal effort. Whether it’s rapid growth or seasonal fluctuations, BaaS is designed to accommodate changes in volume without the need for any significant additional investment.
Being able to adapt quickly is crucial for staying relevant and current in their target markets. That means rapid integration is key. FinTechs need to quickly and seamlessly integrate new features such as virtual cards, cloud-based solutions, and other APIs.
We are in a period when the provision of banking services is migrating to an exciting new BaaS model. Fintechs can see the opportunity and desire full banking technology, but they also need more than that.
The industry is looking for trusted partners with established reputations and extensive experience to navigate this transition effectively. FinTechs must align with providers that offer robust and reliable BaaS solutions to leverage the full potential of this evolving landscape.
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