Starting a fintech bank is a process. There are a few key things that you need to do in order to get started, and we will outline them for you in this article.
Here are the nine steps you can take to get started on building a fintech bank business.
Nine Steps to Launching a New FinTech Bank Business
1. Name Your FinTech Bank Business
Give your fintech bank business an identity so people will think of it as a well-known and respected brand. You can take the name of your fintech bank business from your industry, focus on a geographical location, or use your name, among other options.
The main goal for naming your fintech bank business is to make it sound appealing and trustworthy so customers will want to do business with you.
2. Determine Your FinTech Bank Business Model
There are several possible types of business models for a FinTech Bank business, including:
- Online-only: Customers conduct all transactions online without visiting a physical location.
- Hybrid: Customers can either conduct transactions online or visit a physical location.
- Brick-and-mortar: Customers must visit a physical location to conduct transactions.
No matter which model you choose, ensure it aligns with your business goals and the products and services you offer.
Read more about choosing the right business model for your FinTech Bank business.
3. Choose a Legal Form for Your Business
By incorporating your fintech bank business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.
The business structure you choose for your fintech bank business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common fintech bank business structures.
4. Write a FinTech Bank Business Plan
All fintech bank owners should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team.
When developing your fintech bank business plan and strategy, you should think about the following questions your customers might have:
- What is a fintech bank?
- What services does a fintech bank offer?
- How is a fintech bank different from a traditional bank?
- Which products and services do my fintech bank offer?
- Can I open a checking or savings account with my fintech bank?
- What are the fees associated with using a fintech bank?
- How do I make deposits or withdrawals from my fintech bank account?
- What is the interest rate on my fintech bank account?
- What are the terms and conditions of my fintech bank account?
- What happens if I forget my login information for my fintech bank account?
- How do I contact customer service for my fintech bank?
You can use the answers to these questions to help guide the development of your business plan and marketing strategy.
Read our article about how to write a fintech bank business plan.
5. Apply for the Necessary Permits and Licenses
You may need to obtain required licenses and permits before launching your fintech bank business. For example, if you plan on offering banking services, you will need to obtain a state bank charter. To do this, you must apply to the state’s banking regulator.
You must also register your fintech bank business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website if you plan to hire employees.
Read our article about obtaining the proper fintech bank business licenses.
6. Determine Your Budget & Apply for Funding as Needed
In developing your fintech bank business plan, you will figure out how much funding you need to start and grow your business.
If you have funds to invest in your fintech bank business, you may consider taking advantage of that. In addition to your funds, other forms of potential funding for your fintech bank business include traditional bank loans, SBA loans, credit cards, angel investors, and family and friends.
Read our article about the costs associated with starting a fintech bank business to help you determine if funding is needed.
7. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your fintech bank business, it’s essential to have the right technology in place to maximize efficiency. You need a computer with Internet access and accounting software for tracking expenses and revenues.
You may also want to invest in customer relationship management (CRM) software to help you manage customer data and employee scheduling software if you plan to hire staff. And, of course, you will need a secure and reliable online banking platform for your customers.
8. Market Your FinTech Bank Business to Potential Customers
Before selling your products and services, you must let the world know you exist. The first step is to create a website so people can learn more about your products and services and how they benefit them.
After you launch your website, start promoting it through social media channels like Facebook and LinkedIn. Also consider networking with other people in the fintech bank industry through social media and blogs so they can help share your business.
You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. FinTech Bank businesses should consider the following promotional strategies for which you should start getting prepared:
- Sponsorship opportunities – Look for events and organizations that align with your fintech bank’s values and sponsorship opportunities. This is a great way to get your brand in front of potential customers.
- Guerilla marketing – Utilize unique, attention-grabbing tactics to get your fintech bank noticed. This could include things like flyering or street team marketing.
- Traditional advertising – Advertise your fintech bank in traditional channels like print, radio, or television.
- Public relations – Spread the word about your fintech bank through press releases and media relations.
- Online marketing – Promote your fintech bank online through search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing.
Read our article about how to market your fintech bank business for more tips.
9. Get New Customers & Grow Your Business
When you promote your products and services, you’ll start to get interest from potential customers.
Make sure you’re ready to serve these customers. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your fintech bank business.
Read our article about how to effectively grow your fintech bank business to learn more.
Starting a FinTech Bank Business FAQs
FinTech banks offer several advantages to entrepreneurs, including the ability to serve niche markets, the opportunity to offer innovative products and services, and the potential for high profitability.
To start a successful fintech bank business, you need a strong understanding of the industry, the right technology and software, and a well-executed marketing strategy. You also need to be prepared to grow your business effectively.
There are many ways to market a fintech bank business online, including search engine optimization (SEO), pay-per-click (PPC) advertising, social media marketing, and content marketing.
Here are some tips for starting a successful fintech bank business:
- Understand the fintech industry
- Develop a unique selling proposition
- Choose the right jurisdiction & banking license
- Set up your business structure
- Obtain the required licenses & permits
- Get the right technology & software
- Create a marketing strategy
- Find the right people to help you grow
- Promote your fintech business
- Get new customers
A simple checklist to use when starting a fintech bank business is as follows:
- Name Your FinTech Bank Business: This should be done carefully, as your brand is essential for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
- Determine Your FinTech Bank Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
- Write a FinTech Bank Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
- Apply for the Necessary Permits and Licenses: In most locations, you must apply for a business license and permits before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Market Your FinTech Bank Business to Potential Customers: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the products and services they truly need.
- Get Customers & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products and services.
Starting a fintech bank business can be a smooth process with the proper preparation and execution. Choose the right technology and software, create a solid marketing strategy, and find the right people to help you grow your business. With these tips in mind, you can be on your way to success.