We’ve all seen it Headlines: Fintech is struggling. Since last year, prices are down 70%-80%, deal activity is down 67% and layoffs have plagued many former industry favorites.
But fintech is resilient. Innovation continues to drive new developments in lending, payments, crypto, and especially infrastructure, showing that the industry still has plenty of room for growth. And even if investment activity slows this year, it will still be better than it was in 2019 and 2020.
Infrastructure providers have a unique opportunity to be a bright spot in all the doom and gloom. Over the years, infrastructure has allowed fintech companies and non-financial services companies to integrate financial products into their platforms.
However, when the market became crowded, infrastructure providers began to compete by developing the least expensive product and signing up the most fintech companies. The infrastructure market is missing a critical opportunity to build additional production capabilities that address pain points caused by fintech struggles.
Infrastructure providers can connect fintech companies with existing banks so both can take advantage of the interest rate environment.
Instead of signing new ones, infrastructure providers need to find ways to increase their capacity for existing customers. To do this, they must delve deeper into the problems their customers face on a daily basis. What does a fintech company do when attacked by fraud? What does the new compliance mandate in the UK mean for their business? How do you handle customers panicked by news of skyrocketing interest rates and inflation?
These are questions that fintech industry leaders face every day, and infrastructure providers need to understand how to answer them.
Identify and resolve symptoms
A large amount of cash in the financial infrastructure sector has crowded the space with new entrants. Addressing specific fintech pain points isn’t just about helping the fintech industry; It is also a way for infrastructure providers to differentiate themselves and show that they provide real value.
International coverage
Attracting more customers and sources of revenue has led fintech companies to explore international waters. In an increasingly globalized world, international coverage is not an option.
Infrastructure providers must meet the needs of their customers by ensuring that their food is available in countries outside of the U.S. FinTech companies must help them comply with rapidly changing global regulations – more below.
