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The 5-Step Roadmap for Fintech Firms Entering Fast-Growing Emerging Markets

Entering any market for the first time can be challenging. Issues around industry regulation, localization, and culture can scupper the plans of even well-established firms. New markets can present unforeseen complexities - particularly fast-growing emerging ones - and particularly in highly regulated payments and fintech industry segments. .


fintech market entry payments consultancy

Although fintech has made a major impact on the global financial stage, many markets continue to have inadequate access to financial services. Individuals may not have easy recourse to the documentation required by the modern financial market, may struggle for steady employment or simply lack trust in the financial system. Problems around literacy and access to the right technology also do not help matters.

'There remains as many as 1.7 billion unbanked adults around the world'

The number of underbanked and unbanked individuals numbers in the billions worldwide, with emerging markets performing particularly poorly.  In fact, there remains as many as 1.7 billion unbanked adults around the world.

This has negative consequences for the wider economy, shutting out many individuals from formal financial networks. If this is addressed, the resulting higher levels of financial inclusion could increase the GDP of all emerging economies by $3.7 trillion by 2025, leading to the creation of 95 million extra jobs.

unbanked population market entry payments consultancy
The global unbanked population. Source: Global findex database

Fintech firms could hold the key to improving financial inclusion in many fast-growing emerging markets but they need to gain a foothold first. In order to do so, they’ll need to tread carefully, conduct detailed research and formulate clear strategies for success in their new markets. 

5 Steps for FinTech Firms Entering New Markets

Payments play a crucial part in International expansion. Reduce complexity for merchants & payments companies by delivering strategies for succes through market research & analysis. Leverage the following 5-step roadmap for your FinTech market expansion ambitions.

  1. Analyse Market Opportunities
  2. Country Deep Dive
  3. Develop A Market Entry Strategy
  4. Look into Vendor Selection
  5. Assessing Staffing Requirements
fintech market entry roadmap payments consultancy
PaymentGenes's 5-step client roadmap for enabling opportunities in emerging FinTech markets.

1. Analyze Market Opportunities

Based on a thorough understanding of your services or product lines, fintechs should create regional overviews to identify countries with the highest market attractiveness. As the fintech market is still relatively young, governments are rushing to keep up with new technological developments.

"As the fintech market is still relatively young, governments are rushing to keep up with new technological developments"

As such, this means that the market can remain in a state of flux, subject to change at any minute. This ambiguity (and a lack of alignment with global standards), presents a challenge to fintech firms looking to expand into new markets.

How to avoid surprises when analyzing market opportunities:
Work with a partner that has the scope,  experience and global network of local fintech consultants to rank markets accordingly.

2. Complete a Country Deep Dive

Once your company has identified priority countries to potentially expand into, it is a good idea to carry out a deep dive to identify:

  1. Domestic regulations
  2. Market barriers
  3. Market requirements
  4. Competition profiles
  5. Size of the commercial opportunities on offer.

The intricacies of each new market should never be lumped together - even if they are broadly part of the same region.

Localization issues, for example, are the sorts of things that will only become apparent when detailed analysis of each new market is undertaken.

Financial backing is not enough to guarantee success when entering a new market - US retail firm Target wasted the best part of a $4 billion investment when attempting to enter the Canadian market as detailed knowledge was lacking.

3. Develop a Market Entry Strategy

Once your FinTech has carried out the necessary due diligence around its prospective new market, it needs to be translated into a market entry strategy.

Essential Market Entry Strategy Information:

  1. Potential partnerships
  2. Opportunity mapping with regulatory impact & functional fit for the market.
  3. Detailed macroeconomic profiling
  4. Competition analysis
  5. An evaluation of your own strengths and weaknesses

Having the above mentioned topics thoroughly and accurately available will enable you to compile a feasible market entry strategy.

Researching this information and developing a market entry strategy in FinTech is not easy and therefore its a good idea to garner external support. A partner like PaymentGenes can develop this strategy in partnership with FinTechs before they enter new markets.

4. Look into Vendor Selection

There are a whole host of partners for fintechs to choose from, each with their own specific niche. However, not all vendors will have intimate knowledge of your new market, nor possess on-the-ground support staff to help you should anything go wrong.

Selecting the right vendors per respective target market is extremely important for success

Again, that’s why it’s important to work with a partner that can help with vendor selection, ensuring that your needs are matched with the best possible provider.

That will enable you to kickstart your new presence and rapidly launch market engagement services by creating domestic or regional partnership ecosystems.

5. Assess your Staffing Requirements

Finally, although your head office may not move location, that doesn’t mean your business can treat its new market as an afterthought - as some satellite that doesn’t require the same attention and resource allocation.

In fact, it is a good idea to carefully assess your staffing requirements when entering new markets. Build local teams or projects with the talent required, focus on knowledge, skillsets, and culture when hiring.

In specific cases, without having the right local payments professionals, you won't meet regulatory requirements and will not be allowed to do any business.

The payment industry is extremely complex and you can deliver high results when you have knowledge of the industry.

Standard recruiters are unlikely to be able to provide you with the specialized knowledge and talent you need. Consultants or event interim experts that have a deep understanding of your new market can really help in this area. 

Although all of the above steps require thorough understanding & execution - the potential business growth from expanding into new FinTech markets is unrivalled. Don't refrain from expanding into new markets due to complexities, but rather explore how your business can best approach a potential market expansion.

At PaymentGenes, we have the knowledge and experience of supporting fintechs when they enter new markets, co-creating value with their internal staff. We help you prioritize country penetration, tailor solutions to the market, and develop local partnerships where it is advantageous to do so. 

Find out more about our Market Entry, Research & Engagement consulting here

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