The following is a guest post by Tui Allen, VP of Product, Ampla Technologies
Banking incumbents aren’t the only ones feeling the pressure of today’s macro-environment. There’s a graveyard of banking fintech startups filled with those that have aimed high but failed to hit their mark – especially on the consumer side. Yet amidst the rubble, several B2B startups have not only survived but thrived. The commonality? Their products are tailored to meet the distinct needs of the industry they serve. Banking fintech is facing a revolution, and surviving this fintech battlefield means offering hyper-customized products for businesses.
In my personal experience building banking for commerce at Ampla and previously at Shopify, I’ve seen the importance of this firsthand. The initial assumptions we made about our product’s structure had to be reevaluated over time in response to our customer needs. We were compelled to challenge and reshape the traditional notions of what a banking product should encompass in order to truly address the demands of our clientele.
Banking Startups for a Specific Industry
Based on our learnings, here are the areas where we should see increased innovation from banking startups building for a specific industry – from freelancing to manufacturing.
Transactional Dynamics: This includes facets like payment terms, transaction processing speed, spending limits, and multi-currency support. The nature of transactions can vary widely across industries, from high-volume, low-value transactions in the e-commerce sector to sporadic, high-value transactions in real estate. Each requires tailored solutions. Multi-currency support is crucial for industries with international operations. By understanding these unique transactional dynamics, fintechs can craft bespoke solutions that optimize operational efficiency and financial management for each industry.
IntegratedSoftware Tools: Integration is no longer optional, it’s mandatory. Fintech startups need to build tools that work in harmony with industry-specific software, from inventory management systems to tax software. The role of customizable APIs is pivotal, bridging the gap between fintech solutions and business processes.
Regulatory Compliance and Risk Management: Fintech’s answer to industry-specific compliance and risk management goes beyond what traditional banks offer. From data protection in healthcare to product liability insurance in eComm, we need to stretch the norms. It’s not just about compliance – it’s about earning trust.
Financial Management Solutions: Work on providing a toolbox of solutions that cover working capital management, industry-specific financing, and invoicing. Whether it’s large debt facilities for consumer products or short-term invoice financing for service providers, every industry has unique financial needs. The aim is to serve every business model, whether it needs recurring billing solutions for SaaS or simple invoicing tools for freelancers.
As funding is tighter and fintech continues to evolve, the winners will be those that recognize the value of specialization and customization. These companies will leverage technology to drive financial innovation, delivering tailored solutions that meet the unique needs of diverse industries. It’s a harder path, no doubt, requiring a deep understanding of each industry and a commitment to ongoing adaptation. But as recent history has shown, it’s a path that leads to success.
Tui Allen is a seasoned innovator with over 20 years of experience in technology, design, and product-led growth. She’s currently the VP of Product at e-commerce financial services platform Ampla. She’s the former Head of Product for Shopify's Financial Services, where she successfully led the development and growth of key products, including Shopify Capital and Shopify Balance. Prior to Shopify, Tui contributed significantly to Blackbaud's FinTech and vertical products, generating over $200 million in annual recurring revenue.