Conducting in-depth competitor and market analysis is imperative for fintech startups to formulate winning business plans. By comprehensively evaluating alternatives and positioning against them, fintech demonstrates the viability and differentiation sought by investors.
This detailed guide examines best practices for assessing the competitive landscape and defining your value proposition. Follow these tactics to inspire investor confidence via actionable insights from analytics.
Researching Competitors Holistically
The biggest mistake fintechs make when analyzing competition is focusing too narrowly on startups targeting near-identical offerings. However, investors recognize that indirect substitutes also represent threats.
“IncludeTradFi providers, Big Tech firms, crypto disruptors and even neo banks in your analysis – anyone tackling aspects of what you do,” advises [John Lee, Director of Fintech Research].
By covering substitutes, you avoid blind spots to competitive risks. Evaluate product features, technology strengths, customer segments, and business models widely to showcase deep market awareness.
Identifying Who Competes for Your Customers
Rather than listing market share leaders as knee-jerk competitors, frame your analysis around customer segments. Identify all solutions vying for the attention of your target users, even if the means vary.
E.g. For a personalized robo-advisory fintech, also explore:
- Research-focused retail investor apps
- Full-service wealth management firms
- Index fund providers
- Social trading platforms
Though their offerings differ, they compete for the same audience: – Retail investors seeking guidance on managing their assets. Analyze them through the lens of customer appeal and selectivity factors.
Evaluating Competitors Across Value Chains
Additionally, reflect partners who enable competitors within your value web. E.g. analytics and data providers who supply decisioning engines for robo-advisors. Their capabilities indirectly boost rival customer experiences.
Or payment processors enabling smooth transactions for a crypto exchange. Their reliability, security and speed allow competitors to better serve users. Factor these behind-the-scenes partners in.
Tracking New Market Entrants
Avoid stagnant analyses by continually monitoring new fintech solutions launching targeting facets that overlap with you.
Given accelerating innovation cycles, insights quickly become dated. Set news alerts, leverage fintech trackers like CB Insights, and network with incubators to stay updated on emerging players with disruptive potential.
“Fintechs focused exclusively on current competitors often get blindsided by fresh concept newcomers solving old frictions better thanks to new tech,” warns [Jane Smith, Managing Partner of Fintech Advisors].
Continuously scan sites like Plug and Play, Finovate, and The Fintech Times for newly funded players across related domains; you want to preempt threats before they scale.
Evaluating Market Size and Segmentation
Beyond alternatives, comprehensively analyze your total market opportunity using reputable research sources. Quantify key factors like:
Sizing Your Total Addressable Market
- Define your serviceable market using metrics like accessible geographical territories, consumer segments by assets or income thresholds, and use case scenarios
- Source respected publishers like Forrester Research to leverage existing TAM modeling aligned to your offering focus area
- Project growth rates over 5–10 years, cross-referencing historical expansions and macro trends
Conveying your thorough understanding of current vs potential market scope establishes a critical foundation for modeling user adoption.
Researching Your Target Audience Parameters
Likewise, intimately understand nuances within your beachhead segment using data including:
- Demographic classifications (age, gender, location, jobs)
- Financial characteristics (income, net worth, portfolio balances)
- Online behavior and purchase patterns
- Motivations and feature preferences
- Platform usage (mobile vs desktop))
Triangulate insights from Pew Research surveys, Gallup panels, Statista estimates, and user interviews to enrich persona clarity.
Identifying Areas of Under/Over-Saturation
Scan popular reports from CBInsights, McKinsey, and BCG to pinpoint sub-sectors with ample white space versus excessive competition.
This guides areas to lean into or avoid. E.g. Mortgage lending apps may face steep rivalry while crypto retirement plan solutions remain sparse.
Prioritize gaps aligning with your strengths for differentiation.
Positioning Your Value Proposition
With robust intelligence gathered on alternatives and market landscapes, synthesize learnings to decisively position against competitive offerings.
Articulating Where Rivals Fall Short
Call out deficiencies among current solutions, being highly specific regarding vulnerabilities. E.g. respondents have not modernized platform UX/UI to meet rising mobile-first usage expectations.
Support with data: e.g., 68% of digitally active adults use mobiles as their primary banking channel, but Wells Fargo site bounce rates are 41% on mobile.
Such points quantifiably convey that you are fulfilling unmet needs.
Quantifying Improvements Over Status Quo
Likewise, numerically showcase how your solution delivers step function improvements over what users tolerate presently.
E.g., By utilizing our automated portfolio balancing bots rather than manual rebalancing:
- Clients achieve up to 2% higher risk-adjusted returns
- Rebalance times drop from 5 business days to near-instantaneous
- Clients save 8 hours annually on asset allocation research
The more metrics-driven detail, the better—demonstrating familiarity with pain points through data.
Communicating Value Aligning to Investor Priorities
Importantly, ensure your competitive messaging maps to what investors deem lucrative opportunities worth pursuing.
Fintech thought leader [Jane Smith] explains that VC firms aggressively target underwriters simplifying processes to expand financial access. Quantitatively positioning your technology’s impact on conversion rates or approval odds will resonate strongly by linking to key investor priorities.
By conveying an intimate understanding of competition aligned to market gaps and investor interests, you persuasively communicate viability critical for capital partners.
Connect with Realwork4ce for Ongoing Competitor Tracking
As you continue executing your fintech venture’s go-to-market strategy, leverage specialists like Realwork4ce for ongoing competitive intelligence. Our research team provides continually updated monitoring of new threats, funding activity, patent filings, regulatory moves, and more.
This sustains your strategic foresight on market evolutions and emerging disruptors over months and years, – crucial for outracing rivals. To learn more about our competitive and market-specific landscaping services tuned specifically to fintech’s fluid dynamics, visit our website today.