Breaking into new markets is difficult for any company, but it can be especially challenging for fintechs.
There are many benefits to being a multinational fintech company. They can reach new markets and customers, increase market share, and learn new ways of doing business. However, there are also many challenges when expanding into new markets.
This article explores some of the keys to success for fintechs looking to go global and offers insights on how to overcome some of the challenges.
Is there customer demand in a potential new region?
One of the first things to consider when expanding into a new market is whether there is customer demand for the product or service.
Fintech companies should assess whether there is a need for their product in the new market and whether there are any regulatory barriers to entry.
According to Hayley Fisher, Country Manager AUNZ at Adyen, “Fintech companies looking to expand into other markets need to focus on customer demand and localisation of products in a way that aligns with how merchants grow. Fintechs need to identify and study the unique customer wants and needs of the market and then look into how these can be incorporated into their products, services, and go-to-market strategies.”
If there is little to no demand, it will be challenging to succeed in that market.
The story of Adyen
“For instance, with Adyen, we listened to our customers and found that merchants are often challenged with high transaction costs, slow implementation, irregular reporting, poor fraud detection – all of which led to poor overall customer experience,” said Fisher.
She added, “Our solution is to enable our customers to integrate every payment into one singular platform, so that merchants have a singular view of the customer data and customer journey. These rich insights will enable them to make better business decisions and enhance customer experience. Prioritising customer demand will go a long way in helping fintechs gain market share.”
Can a fintech product or service be localised?
Even if there is customer demand, it is essential to consider whether the company can localise the product or service to meet the needs of the new market.
Localisation means making a product or service available in the local language(s) and adapting it to the local culture, customs, and preferences.
It also includes ensuring that the product or service is priced appropriately for the local market.
Some fintech products and services can be easily adapted to new markets with slight changes, while others may need to be completely redesigned.
It is vital to assess how much work will be required to localise the product or service before expanding into a new market.
“Additionally, what helped us further expand internationally is our ability to adapt to local preference and ensure localisation of products,” said Fisher. “One way that businesses can do this is to ensure that they are adapting local payment methods. As different international markets have different payment preferences, businesses need to ensure the options are available for consumers to pay the way they like. For example, in Australia, our technology enables our customers to easily offer payment options such as local debit network eftpos, and buy now, pay later alternatives like Afterpay, Klarna, Zip, and more.”
She added, “This ensures agility and scalability when it comes to expanding to other markets. Businesses can leverage the same back-end system and seamlessly integrate into new markets and payment methods. A great example is guest experience company ROLLER. They have been using Adyen’s technology to get a singular and complete view of the guest journey across every touchpoint, helping them expand globally and keep a finger on the pulse for their 750+ attractions worldwide.”
Without localisation, a fintech company is likely to face many challenges when expanding into new markets.
It is important to research the local market and understand the customers’ needs before expanding.
Can the company scale its operations?
Another critical consideration is whether the company can scale its operations to meet demand in the new market.
Fintech companies should have a solid plan for expanding their operations to meet the needs of the new market.
This plan includes having the right team in place and the necessary infrastructure and processes.
According to research by EY, one of the most significant issues facing mature fintechs face is “having access to the required talent in a cost-effective manner and at the pace at which scaling businesses are moving.”
Other challenges include a lack of standardisation and regulation and the need for funding.
Scalability means that a company can grow its operations to meet demand without compromising quality or service.
Fintech companies need to have a clear plan for how they will expand their operations before going multinational.
The bottom line
Going multinational is a big step for any company, but it can be especially challenging for fintechs.
Fintech companies need to consider customer demand, localisation, and scalability when expanding into new markets, among other things such as regulation and funding.
With careful planning and execution, fintech companies can successfully go multinational and tap into new markets.