The Fundamentals of Winning the Fintech Game

The Fundamentals of Winning the Fintech Game
The Fundamentals of Winning the Fintech Game |
The FinTech landscape is evolving very rapidly in Egypt, and with that evolvement come winners and losers. Startups will cause disruption for incumbents, but they will be limited in what they can achieve due to regulations, resources, and competition from bigger, more dominant financial institutions. Meanwhile, incumbents may enjoy the privilege of favourable regulatory conditions and a bigger balance sheet, but they will be bounded by an absence of an innovative & an ‘agile’ culture – severely limiting their scope in what they can achieve on the long-run.

Below is a high-level guideline for both startups and incumbent institutions on how to navigate the FinTech landscape and ensure relevance in the digital financial era.

The Fundamentals of Winning the Fintech Game
The Fundamentals of Winning the Fintech Game |

Expand your network capabilities

You are a FinTech app and you have a certain amount of customers that make frequent transactions within your network (Sender to Receiver/Receiver to Sender). That by itself is a limitation for you because your customers are bounded by the constraints of your network – they cannot make a transaction to an entity outside your network (e.g. a merchant outside your network if you are a two-sided platform).

‘Expanding your network capabilities’ simply means making your financial product accessible to entities outside your network. Expanding your network reach or integrating your network with more established & larger networks will ultimately lead to more revenue for your company or startup. Larger reach means more users and more users means more transactions. You can do this in two ways, mainly through integrations/partnerships or focusing on product development.

In terms of product development, you could develop solutions whereby non-customers can transact with your financial product without being required to become a registered user. This can happen through shareable links, widgets, QR codes, etc. An example of expanding your network capabilities through product development is the Venmo iMessage feature whereby Venmo customers can send money to non-Venmo customers over iMessage. Another example is valU’s introduction of Waqty, where non valU clients can benefit from instalment programs without having to go through a full registration process.

Own the customer

Historically, but not necessarily, you might assume that startups usually nail it while incumbents usually fail it. Those who offer a multitude of financial products with the best customer experience will be the winners of the FinTech game. In order for that happen, companies will need to ‘own the customer’, by doing the following:

Becoming Data-driven

Do you have analytics & data science departments? Are you focusing on the right metrics? Are you taking enough decisions based on actionable insights? Being data-driven simply means that your entire organization is making decisions based on facts instead of assumptions, opinions, or gut feelings. Organizations that are data-driven make fact-based decisions in a continuous data-driven business cycle, starting from data creation and ending with data literacy (decision management).

Having a data-driven culture will allow you to see the hidden opportunities in the surface and foster innovation in the least risky manner. Adopting a data-driven culture, however, is no easy feat as there needs to be a complete shift in your employees’ mindset[2].

  • Be radically obsessed about product development

 Being radically obsessed about product development means that you should rely on product development as the main driver for growth for your business. Relying on product development for growth is not a new phenomenon, there are many great historic examples where companies relied on product development for growth. Apple is a great example. For instance, from 2001 to 2010, they grew their market capitalization from $5 billion to $600 billion by launching product after product (iPod, iPhone, iPad, etc.).

  • Be wholly obsessed about user experience.

If you decide to become a product-oriented company, this means you will launch new products frequently. If you are launching new products frequently, every new product needs to come with its own user experience. Note that if you are not nailing the user experience aspect of your product, people will either not use your product in the way you expect it to be used or, even worse, they will not use your product at all.

Therefore, user experience as a business function is an integral part of product development and your company as a whole. A study conducted by Foster estimates that for every $1 you will invest in UX, $100 is brought in return as ROI.

In order for the above three points to take effect, your company needs to start looking at the IT function as a core function in your organization. Therefore, you should start determining whether your company poses the qualities that make IT effective by asking yourself these 10 questions outlined in a study by Mckinsey:

  1. How are we making key technology decisions across all levels of the company?
  2. How do we track and maximize the value produced by our major technology investments?
  3. How often do our tech teams seek input from users?
  4. Have we placed high-calibre engineers in IT roles that contribute the most value to the company?
  5. How many projects has IT shut down because they were not providing value?
  6. How long does it take for our company to deploy new applications?
  7. Which of our IT capabilities do vendors provide, and why?
  8. How much custom development work goes into building new IT solutions?
  9. How many business decisions are we making with the help of AI?
  10. For our developers, is cybersecurity a hindrance?

Leverage ‘Heavy-lifting’ infrastructure & the API economy

If you are an incumbent financial institution and you did not successfully seize the opportunity of ‘owning the customer’, don’t worry, there is still a way to survive. You might have various departments that provide mortgages or loans, and regulation is at your side since you have been in the market and abiding by regulations since inception.  What you can do is to start leveraging this heavy-lifting infrastructure and start implementing a ‘banking-as-a-service’ strategy.

But what is ‘banking-as-a-service’? In short, banking-as-a-service is an upcoming technology model in which licensed banks/financial institutions integrate their banking services into the products or customer journeys of other financial and non-financial entities through the use of APIs. That way, other business entities such as FinTech startups, could start offering your banking services to a wider range of customers and you could benefit from the new reach/exposure.

Are you a startup and still haven’t yet acquired all the regulatory licensing or resources to offer the financial products you want to advertise for? The good news is that you could also implement this strategy too, by leveraging the ‘heavy-lifting’ infrastructure of other traditional banks or established NBFIs.


Before adopting any particular strategy, you should first assess the type of financial business you are operating, and then deploy the most relevant strategy for your business. If you are an upcoming startup, you should be focusing more on the first two strategies: expanding your network & owning the customer.

If you are an incumbent financial institution, there is no harm in pursuing the path of ‘owning the customer’ but know that your existing processes and structure might impede you in successfully pursuing this strategy, therefore, it is also wise to start taking steps towards the last strategy: ‘leveraging heavy-lifting infrastructure and the API economy’.

Last but not least, the most important part in winning the Fintech game is to think of competitors as collaborators that could provide you with synergies and chances to grow your market share, client base and your product offering.