Top Strategies Fintech Leaders Can Use to Drive Growth During Economic Uncertainty
How has the fintech sector fared in today’s ongoing economic uncertainty?
A December 2022 CNBC report asserts that the “fintech reckoning is upon us” and that business shutdowns or sales are imminent for many fintech companies, especially those dealing with retail borrowers. In a more recent CB Insights report from 2023, a rebound in the global fintech ecosystem can be seen, with funding increasing 55% quarter-over-quarter in Q1 of 2023.
This year is shaping up to be a crucial time for fintechs, as the industry strives to prove its resilience and regain ground in terms of funding and investments.
Yet, the world is far from healed from the economic headwinds of recent years.
This makes it paramount for fintechs to remain conscious of the challenges that lie ahead. The key to success in the upcoming years will come down to a fintech’s ability to effectively strategise and turn economic uncertainty into new opportunities for increased growth and resilience.
The Impact of Economic Uncertainty on Fintechs in 2023
Global business growth has slowed substantially since the pandemic events that played out in 2020.
As the business world continues to progress along a slowed pace of growth, fintech leaders need to reassess their 2023 trajectory to match current economic conditions.
Even if a fintech is based in a more stable national economy, it is still critically important to consider the impact of financial struggles in developing countries — especially in countries with markets that fintech leaders want to expand into.
Fintech is a global industry that thrives on international business connections and partnerships. Economic uncertainty in developing nations can cause disruptions to the supply chain and make finding the right international financial services and banking providers all the more difficult.
Though today’s risk appetites may be reduced, the wisest fintech leaders believe that this economic uncertainty may just be the key to unlocking new opportunities that can amplify long-term growth.
How Fintech Leaders Can Tackle Economic Uncertainty with Innovation
An economic downturn does not need to spell disaster for the fintech industry.
To make it through times of economic uncertainty not only unscathed but poised for sustainable growth, fintech leaders must determine how that uncertainty can be overcome through innovation.
Adaptability is a crucial component of a fintech’s innovation efforts. Fintechs need the ability to continuously evolve their products and services according to both current financial scenarios and the constantly changing needs of their clients, making it of the utmost importance to utilise a business strategy that prioritises operational and digital flexibility.
Accomplishing this requires the adoption of new technologies that can help not only increase operational resilience but also enhance efficiency across the board for the entire organisation.
However, adopting new technologies alone is not enough to overcome economic challenges. To create a truly effective strategy that can turn uncertainty into opportunity, the strategy must combine technology with the right mix of deep business insights and collaboration.
To illustrate this further, let’s imagine a fintech that specialises in cross-border payments and what key components this fintech should prioritize in its business strategy:
Streamline Your Cross-Border Payments and FX with Freemarket
Though many aspects of a fintech business model can be complex, none are quite as complex and crucial as the payment system a fintech has in place. Payment systems are necessary for all types of operational tasks, from collecting payments from clients to invoicing suppliers and completing payouts.
These systems only become more complex when dealing with cross-border transactions, as your organisation must also consider the varying regulatory requirements across the different jurisdictions and on the ground correspondent banking relationships.
At Freemarket, our cross-border payments and currency exchange platform gives you the technological resources and ongoing support necessary to build a resilient payment strategy.
Each of our solutions are tailored to meet the specific needs of your business, ensuring you receive payment technology services and resources that are compatible with your business objectives.
The world economy is in a tumultuous time. To stay ahead of the curve, fintechs need the right strategic partnerships that help to enhance the organisation’s adaptability and flexibility in the face of hardship.
Get started with Freemarket today to begin building a payment strategy that can bring you into new markets while also streamlining your processes and reducing overall complexity.
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