I speak with early stage FinTech founders and project owners on a daily basis. FinTech wasn’t sexy when I started at figo in 2014 but is surily now for many people. The movement of digital transformation has arrived with a slight delay in the banking industry. This has many reasons, and personally, I believe PSD2 is one of the crucial ones. PSD2 and Open Banking in general is providing a complete new level playing field that attracts many industry outsiders. This is beneficial and supportive for FinTech, as banking has been an industry where most of the people have a long track record inside the industry. This is not negative in general, but it surely limits innovative efforts overall.
In order to benefit of new trends and ways of thinking, we really need new kinds of players in the banking industry but we need them to succeed. As much as naivety can be an advantage while finding new ways to solve challenges, sometimes this error can be a crucial faux pas. Try and error belongs to startup culture, but there are some errors than can not be forgiving. These crucial errors usually have to do with the regulator, who sets the rules for all players inside the industry. Naivety while dealing with the financial authorities can be pretty harmful for the own brand but even more importantly can result in being disallowed to offer a certain product. And this risk is not only relevant to early stage startups.
In order to prevent this, new entrants of the banking industry should very well understand some pitfalls. I have written an article for Applause dealing with this topic on a high level. Interested in the learnings? Have a look at their blog here.