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Fintech Startups - Coopetition or Competition? Business Models Are Shifting.

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Celent have reviewed this profile and believe it to be accurate.
30 November 2012

Comments

  • Great post, Jacob.

    I have been thinking about these things too, and for some of the firms and investors I have been working with I am starting to see a definite tilt towards enterprise solutions, either as a white-label solution or as add-on features. For the most part, I think this makes sense for a lot of FinTech startups, especially in light of the difficulties you correctly cite in option #1. It is already a fragmented and noisy business.

    That's not to say that the enterprise route is easy either. As I wrote in a blog post recently, changing the world is hard. Bank IT departments take a little longer.

  • +1

    Acquisition and reach is always harder than one thinks and, in my book, very often a key factor totally underestimated by young startups focusing on a pure consumer-oriented functionality and go-to-market strategy. Winning crowds in financial services is even harder for fledging startups considering the need for trust, security, resilience and stability expected by consumers when it comes to their wallet. So yes, sales cycles are long and procurement departments are tough, but banks offer that reach and allow the startup to generally focus on what it generally excels (innovation, tech, new engagement models) while getting their small sales force to target a more manageable market in size.

    Oh and did I mention that "enterprise is the new sexy" anyway?

    Most of the activity we see out there looks at consumers and some form of personal finance play (whether the distribution channel ends up being direct or via a financial institution). There's still so much to disrupt beyond consumers in the SME and corporate banking space, not to mention the banks' internal information systems as well.
    Looking forward to that next wave of financial services startups focusing on the enterprise space.