The internet and international banking has opened up some incredible opportunities. It is now possible for a startup based in Colorado to trade with clients from London to Bangkok, not just in their own backyard. Despite the potential gains on offer trading internationally is not without its risks.
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Which markets are most suitable for you fintech business
The fintech sector is one of the fastest-growing markets in the world, with online lending at the forefront and one of its most popular segments. Aleksey Nefedov, CEO of Lime Credit Group, said that financial startups who want to conquer the foreign market should take into account a few important factors.
When choosing a country, it is important to take into account not only the indicators that are on the surface but also the rate of market growth. In this case, the online lending market. An attractive market for the business is one that grows by more than 40% per year. This means that the industry is in an active phase of development in the coming years.
In countries where online lending has entered the market a long time ago is not worth looking for success. In the United States, for example, there is very strong competition and a capital-intensive market for entry. In European countries such as the UK, the industry is almost outdated in its classic form and is actively transforming. Wonga is giving way to Revolut. China looks very attractive on the majority of indicators, at first sight. However, local regulatory restrictions will not allow the product to develop.
When is the perfect time to enter a market
The Polish MFI market has been shrinking lately mainly due to the regulator’s pressure, but there is still demand for online lending services. European consumers are financially mature enough to use the product.
It’s not just about the current market conditions. It takes time for a business to get moving and it can be up to a year before a minimum viable product is ready to go to market. This can cost a company up to $500,000 a year and represents a risky investment, especially if there is a sudden change in a company’s target market.
South Africa is one of the most debt laden populations on the planet. Almost 90% of the population has liabilities to banks and MFIs. At the same time, the payment discipline of African borrowers is much higher than in Russia, where more than 20% of the clients are in default, compared to 11% in South Africa.
Affiliate marketing is a good way to attract clients
In Russia, affiliate marketing accounts for about 60% of the total lead volume. In addition, contextual advertising and work with search platforms are effective in promoting financial companies. In Poland, TV advertising is good, as well as advertising on billboards and in print media. Microfinance organizations use both affiliate marketing and search engine promotion.
In Mexico, affiliate marketing is even more popular than in Russia. The so-called brokers, which are extremely popular there, collect customer data and further distribute it among companies.
How to find the perfect top manager
The most difficult thing is to find a person in the new foreign market who will take the launching and further development of the business. Searching for top managers is one of the most important tasks when entering a new market. When choosing the ideal candidate, it is necessary to take into account the mentality of the country.
For example, in the Mexican office, everyone hugs and kisses in the morning and before leaving work. Collectivism is a distinctive feature of the people, and it is important to choose a leader who would fit harmoniously into the team, be a powerful motivator and have systematic thinking. A tough and strict leader wouldn’t take root in the Mexican office, especially in the early days of business development.
Companies are always looking for top managers with different resources. There is no point in contacting local recruitment agencies. They don’t usually get into the fintech-specifics and generalize the requirements to the candidates, though the task of searching are set quite clearly. For example, among other things, the ideal candidate should have financial and project management skills and be familiar with the IT agenda.
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First published in RUSBASE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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