How do you research and analyze fintech competition?

The initial step in researching and analysing competition within the fintech sector is to ascertain the identities of your competitors. Depending on your specific niche, market, and target demographic, you may encounter both direct and indirect competitors. Direct competitors are those who offer similar products or services to the same customer base as your own. Indirect competitors, on the other hand, provide differing products or services to the same customer base as yours, or similar products or services to distinct customer groups. A range of sources can be utilised to identify your competitors, including online directories, industry reports, customer testimonials, social media platforms, and keyword research.

As per my understanding, before identifying your competitors, the first step should be to define the fintech universe of the product. This is important as there is good possibility of latent competitors in the market or future competition due to category / upstream / downstream expansion of other product companies. This will help in fortifying the segment with right entry & exit barriers. Latent competitors mayn’t be competing in the same space but carry a risk of supplementing the product in case of service / pricing / performance issue.

After identifying your competitors, the subsequent phase entails evaluation of their products and services, w own offerings. Gain a understanding of what they provide, how to deliver value, the specific features and benefits they emphasise, challenges they address. To conduct this assessment, a variety of tools are at your disposal, including websites, applications, demonstrations, reviews, testimonials, and case studies. Consider crafting a table or matrix for the systematic comparison of various facets of your competitors' offerings, encompassing elements like pricing, functionality, usability, design, and customer service. This in-depth analysis will furnish you with invaluable insights to refine your strategy in the fintech sector.

Step three involves analyzing competitors' marketing and sales tactics. Examine their channels, messaging, content, and strategies. Use tools like web and social media analytics, email marketing software, content analysis tools, and customer feedback to gather insights. Identify their strengths, weaknesses, and trends to enhance your fintech marketing and sales approach.

Step four involves assessing competitors' financial performance and growth potential. Analyze their revenue sources, cost management, and profitability. Examine business models, revenue streams, profit margins, and growth projections using tools like financial statements, reports, and market research. Identify risks, opportunities, and competitive advantages.

Most of the fintech directly or indirectly compete with legacy financial organizations like Banks and Insurance Providers. Although fintechs rely heavily on solutions related to user experience, data monetization and process inefficiencies of legacy service providers; their biggest challenge is to prevent frauds and provide secure services, while leveraging technology. Legacy financial institutions have been conservative in their approach due to regulatory pressure; however fintechs, which are yet to be regulated fully despite being an important player in customer's monetary journey, sometimes may tempt to trade accountability with customer's ease of doing transaction.