What’s the Endgame for FinTech?

Amidst all the excitement and sometimes overinflation of financial technology startups’ disruptive potential, entrepreneurs often can’t zoom out a bit out and see a bigger picture. While it is understandable when your startup rapidly gains traction and there are no visible barriers, yet the market is not infinitely stretchable. At some point, a strategic decision will be required and every entrepreneur will have to find an answer to the important question: what’s the endgame?

The answer highly depends on the niche and AI startups that most likely have a different life cycle and final destination than, for example, RegTech startups. The different results of startups’ years of work depends on the role and place of that work in the general ecosystem.

Let’s roughly divide startups into two big categories – an element and a unit:

the ones whose product is an element in other companies’ infrastructure (like AI startups, big data analytics startups, banking technology startups, open-source platforms, machine learning startups, authentication startups, fraud detection software, etc.), and,
the ones that can be considered a fairly independent unit (companies dealing with customers directly and offering proprietary services, like InsurTech startups, RegTech startups, remittance services, licensed challenger banks, etc.).
The first set of companies tends to be on the back end – they are on the technology side of any business. Meanwhile, the second set is a service-oriented company working on advanced technology (possibly offered by the first set or in-house built).

To be fair, further inclination towards ‘element’ startups does not take into account industry giants such as Alipay, WeChat, ZhongAn and other truly massive and powerful non-traditional Asian players. Their success carries different hallmarks due to specifics of the region they have been growing in and other factors as well.

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