In an increasingly adoptions of digital technologies in Nigeria, financial technology or fintech is at the for front of this evolution, creating innovative solutions that automates the delivery of financial services.
With boastful of over 300+ startups, a few unicorns and the traditional banks going digital aggressively, Nigeria is classified has “developing FINTECH economy, unlike its peers like India. However, with Covid19 global pandemic, “FintechNGR” has gained currency like never before and there is no time like now to share empirical insights for growing and scaling products and services, most especially for the benefits of the first-time founders and new product growth specialists.
In this article, I would like to briefly differentiate between growth and scaling in the Fintech World as these words are being loosely used and interpreted to mean the same. In practical terms, they comprise of activities that complement each other for startup success. The growth aspect relates mainly to simple metrics, generally business-wise, like number of customers and transactions volume, revenues, sales, and turnover. To scale could mean product diversification, tapping new customer segments or geographies, improving technical and financial performance of an enterprise.
What FinTech needs to scale?
Scaling is more than simply growth. Apart from customer base and revenue streams there are many other parts of business which FinTech could scale up. I always stress the importance of digital product, the necessary ingredient in the recipe for FinTech success. Product scaling could mean implementations of new ideas, functional enhancement or onboarding to next platforms and ecosystems. Scaling relates to strategy, not only in context of strategic pivots, but also in case of modified ambitions. A good example is replacing sales-led strategy with a product-led one. Scaling can also impact fewer favorite parts of business like scaling up a team which tends to increase the quality or pace of implementation. Out of the list, strategic ambitions and talent pool are the best options for start-ups. Another one is “budget scaling” that can also be referred to as increasing availability of funding, no doubt it’s a kind of scaling that every startup needs most!
Let’s have a look at these insights and how they apply to fintech startups.
1. Growth demands resources. A lot of resources
Scaling isn’t a side gig. It consumes an outstanding — and often surprising — amount of not just funding, but also huge man hours, days, and patience.
In fintech, great scaling is best achieved by carefully planning your budget strategy, funding solutions, necessary infrastructure, new potential partners and services, and a backup plan. Ideally, it should take the undivided attention of some of your best professionals, including a great HR department working full time to find, vet, and hire new talent at every possible curve.
2. Balance efforts between acquisition and retention
By default, growth for fintech startups has been synonymous with customer acquisition. But in an industry where acquiring new customers might cost up to twenty times as much as retaining existing ones, founders are heavily advised to focus on their early adopters to scale without overdependence on funding.
There are various ways your existing users can create extra value to compound your growth metrics. Personalized products and services, for example, entice users to stay more time on your platform, thus generating valuable customer data. Motivating your clientele with innovations catered to their needs, loyalty-based programs, and portfolio expansion is a powerful scaling tool that shouldn’t be ignored.
3. Future-proof your infrastructure
Patching up stack tech, migrating databases to the cloud, training employees into new systems — those are expensive, time-consuming activities that no founder wants to deal with repeatedly. So, don’t!
Custom software companies are your biggest ally here. If you’re considering going into scaling mode, chances are you’ll be asking around for quotes, products, and services offered. A great provider must present ways to set up your solution that surpasses even your present best-case scenario, without overburdening your startup with unnecessary costs.
4. Embrace automation as much as possible.
Artificial intelligence has come a long way to enable all sorts of cost savings for savvy startups. From AI chatbots, WhatsApp, to big data algorithms, automation and the technologies that enable it are paramount to optimize your human resource use.
From an operational standpoint, web and mobile friendly, yet cost effective CRM software is a major first step towards optimizing automation. Their in-house solutions can be paired with third-party integrations to automate small tasks, data management, marketing campaigns, and more, with every tiny improvement piling up into big, tangible results.
5. Invest in security. Then invest more.
This is arguably the only area where operational cost savings should be leveraged very, very carefully — especially in fintech and regardless of your product. Customer trust is a key asset for any fintech startup, as is the observance of all security, compliance, and regulatory bodies like CBN and SEC, enforce upon financial services companies, and going cheap on those often leads to wanton disaster.
Security measures in fintech can be easily marketable as your startup’s unique selling point, and as such, considered an investment instead of an expense. Despite being a necessary step to scale, robust safety protocols make it easier by lending confidence to your business and attracting more clients and partners like payment providers to your platform.
6. Build Community around the product.
In the startup space, one of the hot discussions now, is that of end users’ community building and engagement. Building community around your product offering is a fundamental strategy for product growth. With adequate engagement from community managers, it is a necessary ingredient for gaining costumer’s trust. It will also help in community support whenever new members ask for it.
Final thought: Nowhere to go but up.
Growing and scaling a startup might feel like exercises in divination. It involves a lot of projections that may or may not come to pass, and navigating those on your way to the top is understandably scary.
But no one gets to think about scaling or growth without having reached a solid foundation ahead of it. Your idea has already proven itself: now it just needs to prove itself a bit more.
Yes, you’ll need to think about how you expect your business model to look in the future. Attract capable leadership to your ranks. Look beyond your market — other African countries, even — and expand your suite of products.
Writer’s bio:
Babatunde Adebajo is a seasoned Product Growth Manager, who helps companies scale great products with his expertise in business development, partnerships, user acquisitions and retention. In his spare time, he writes articles on hot and emerging topics in tech and the banking sectors.
