What are the challenges of conducting global Fintech market research?

Navigating the landscape of global FinTech market research presents a myriad of challenges. Identifying region-specific regulatory nuances, cultural intricacies, and diverse market trends requires a meticulous approach. The dynamic nature of the industry demands constant adaptation to evolving technologies and emerging players. Collaboration across borders and staying abreast of geopolitical factors are pivotal for insightful research in this dynamic and interconnected global FinTech arena.

In my opinion, there are two other important factors to consider when deciphering the Fintech market across different jurisdictions and countries. 1. What is driving adoption of Fintech solutions? In some markets it is indeed Government intervention and regulatory change. In others, however, it is consumer demand in the first instance. 2. Taking that further, where there is significant change in consumer behaviour, markets are inclined to innovate around this change irrespective of progress in regulatory change. Open Banking is a good example.

When I started my Fintech some years ago, one of the challenges was working out if my Fintech needed FCA approval, which would add another 20k to my start-up costs. Trying to see where I crossed the line in financial regulation was important and being aware of those regulations can dramatically change your product's original purpose.

Navigating the global Fintech landscape demands a tango between cultural nuances and regulatory mazes, where the tempo of innovation often outpaces traditional research methodologies. Balancing real-time data collection across diverse regions while deciphering market idiosyncrasies requires a synchronized blend of technological agility and strategic foresight.

Regulation adds a layer of complexity to global fintech market research. Regulations differ significantly from country to country. To overcome these challenges, researchers need access to reliable, up-to-date information on international regulations. Collaborating with local legal experts and understanding how diverse regulations shape customer needs across different markets are crucial for conducting accurate and insightful fintech market research. Also, this complexity is a big challenge for FinTech/RegTech companies because sometimes they need to understand, adapt, and reflect different regulations when they want to expand to different countries.

I have launched online giving platforms in Australia and also across the wider APAC region, and cultural nuances was an absolute driver in our growth strategy - because the whole idea of 'giving' differs widely between the various cultures. In Australia, for example, we will undertake a challenge (a marathon for example) and ask friends to support our nominated charity. In other countries, this is not culturally the norm - it is more common to do personal fundraising for family members or friends in need of money. The FinTech takeaway from this is that one size does not fit all - especially in a fragmented cultural geography. So what is the constant? The ability to adapt accordingly.

It is not a matter of diversity only. It is also a matter of non-fintech readyness. The fintech industry is still no where near the maturity that consumption of its products is plug&play. This is why B2B fintechs can only sell to other fintechs and corporate adoption took several years longer than it should have. Several players (like my company) are making fintech more open and consumable also by non-fintech companies. This is a normal cycle. Who were the first computer parts consumers? People who worked with computers. Today, anyone can put one together because the parts have been standardised.

It is true that one size does not fit to all but there few basic norms, behaviour, tastes, reaction are same all over the world. Thus creating fintech solutions requires nasic similarity. Variable Ux and feature might be helpful to connect globally. Fintech researchers can minimize the culture diversity though the basic wants and the way where Customer can setup as per own requirement.

The first thing that came to mind about cultural diversity and the current landscape of the market's situation. Smartphone penetration or unbanked population are vital indicators. What might drive people to embrace fintech in one region might be irrelevant in another. Understanding cultural anxieties around financial security, financial exclusion, and access to resources is vital. Likewise, recognizing cultural motivations (a desire for financial independence, aspirations for wealth accumulation, or simply the convenience of digital transactions) provides invaluable insights into product development and marketing.

Irrespective of the consumer statistics such as mobile adoption etc - there is another layer here which impacts FinTechs and, in particular, how they interface or integrate with financial institutions. The key for me is interoperability between these businesses and a 'technology standard' that is adopted across all regions. We are already seeing this in standards such as ISO 20022 for domestic real-time payments rails.

It always starts in one region and then spreads. This is about culture and willingness to do something in a new way. Fintech has existed for thousands of years, it is just that modern fintech started about 15 years ago and because the benefits are ever more clear is it adopted. Also things don't happen in isolation, without linkedin and paypal most people wouldn't be comfortable sharing their real name on a check-out process for example. In 1999 people incognito on the web. So things come into their own in their time, in the context of the culture, the need and the readyness to use it.

Keeping our finger on the pulse of the market, through scouting new ventures is critical to maintaining competitive advantage. As stated, fintech is a fast-changing and evolving industry - to overcome this challenge and understand the competitive environment, I believe that we should act like VC scouts. From that point of view, we should be able to analyze fintech startups and their intentions from their very early, seed investment stages.

You also need to account for diverse regulatory environments: Fintech operates within a complex regulatory landscape that varies across countries and regions. Understanding and navigating diverse regulatory environments pose a significant challenge for global Fintech market researchers. Compliance requirements, licensing procedures, and regulatory changes can impact market entry, product development, and overall business strategies. Researchers must stay informed about regulatory developments worldwide to provide accurate and actionable insights.

No time for much analysis. It is too fast; and also you can't do it looking backwards. It is more a matter of dynamic trial and error - mostly done by startups in their early phases.

Data is always backwards-looking. If you are at the leading edge it won't help too much; except to ask your customer if they like "X" you are working on and to be product led. With a strong customer / regulatory mindset. The methods of focus groups, and research are only good once you already see early success and people can interface with it. That is why the newton flopped and the ipad didn't.

Data fragmentation and heterogeneity are also an important issue that should be considered: Fintech market research often involves collecting data from diverse sources, including financial institutions, technology providers, regulatory bodies, and consumer feedback. The challenge lies in dealing with fragmented and heterogeneous data sets. Data may vary in formats, standards, and levels of granularity across different regions and market segments. Integrating and harmonizing such disparate data sources is challenging and requires robust methodologies to ensure the reliability and validity of the findings.

Tackling bias and fairness in algorithmic decision-making is a big challenge in this space: As Fintech increasingly relies on algorithms and artificial intelligence, ethical concerns arise regarding bias and fairness. Biases in algorithms can disproportionately impact certain demographic groups, leading to unfair treatment or exclusion. Fintech researchers must grapple with the ethical implications of biased algorithms, considering issues related to algorithmic transparency, accountability, and the potential consequences for individuals and communities. Mitigating biases and ensuring fairness in algorithmic decision-making processes are essential ethical considerations in Fintech research.

An important item to consider when conducting your research is the monetary and capital control policies of the jurisdictions you are getting research data from. These policies will determine how you analyze and use the data, as unique situations will have outlier results and research that doesn't align with similar jurisdictions with differing policies.

Informed consent and transparency: Obtaining informed consent from research participants is crucial in Fintech market research. Participants should be fully aware of the purpose of the research, how their data will be used, and any potential impact on them. Achieving transparency becomes challenging when dealing with complex financial products or algorithms. Researchers must communicate clearly and understandably, avoid jargon, and provide participants with the information needed to make informed decisions about their participation.