The fintech industry has been growing at an impressive pace for several years. New, unusual solutions are appearing and the biggest players are outdoing each other in offering innovations. Due to the increased interest in modern banking, the fintech industry is surrounded by long-held beliefs that have little to do with reality. At INCAT, while working every day with entities planning to enter the fintech industry, we encounter such misconceptions all the time, so today we decided to tackle the most popular ones that create a false image of the industry.

1. It takes a huge amount of money and time to make a fintech

What is the truth?

The amount of financial expenses that a fintech startup incurs depends primarily on the business model adopted. If you decide to develop the whole fintech infrastructure and a wide range of services, then of course it requires a lot of funding – you need a budget for operations, infrastructure, team, technology and marketing. However, if you choose the minimal option and decide to develop one service at the beginning and see if the market will accept it, then you can afford to optimize cost and time by choosing, for example, the INCAT FaaS AI platform, which allows you to quickly implement a transaction system and the possibility of subscription billing instead of a standard license.

2. Your product or service must be a gamechanger

What is the truth?

Innovation is a word that is used in all cases in the fintech industry. It is commonly believed that a solution offered by a fintech company must be unique and must completely change the rules of the financial market. Meanwhile, the recipe for success in the fintech industry is much simpler – you don’t have to reinvent the wheel and create a solution that no one else offers yet. You can do similar things to those already on the market, just do them better. Find out what the pain points of users of existing solutions are and answer them, without necessarily changing the status quo right away.

3. Fintech’s biggest enemy is the traditional bank

What is the truth?

The competition titled “fintech vs bank” has existed since the very beginning of the fintech industry. The thing is, while in the beginning there was a slight rivalry between banks and fintechs, this has now changed to collaboration. Banks recognize the technological potential of fintechs, while fintechs are open to partnerships with banks to build their customer base and navigate the challenging regulatory environment. The PKO Polish Banki initiative titled “Let’s fintech with PKO” can be an example of such cooperation. Let’s Fintech with PKO Bank Polski is a program of partnerships with startups under which PKO is looking for fintech solutions ready to conduct internal and production pilots and scale their business in partnership with the Bank.

4. Regulation kills innovation

What is the truth?

The fintech industry is an area that, just like banks, operates in a certain regulatory environment, but it is not designed to stifle innovation, but to create standards and to ensure transparency and security of financial services. In addition, Polish regulator – KNF creates a number of initiatives that support and educate fintechs on the requirements they must meet to become a full-fledged participant in the financial market. Such initiatives for example include the creation of the Innovation Hub educational program and the creation of a virtual sandbox for fintech start-ups.

5. Fintechs don’t care about client’s security

What is the truth?

It is exactly the opposite. Fintechs, unlike traditional banks, are still working on trusting users and convincing them to deposit their assets with them. This makes it all the more important for them to take care of the security of their customers, because not taking care of this issue is a one-way ticket. Although we still hear about various security-related mistakes in Polish banks, banks have such a strong position among their customers that they often indulge in such slip-ups. It’s different with fintechs – any mistake can have consequences in the form of ruining the image of a trusted financial partner, so fintechs are very sensitive to user security aspects.