Catherine Wines, co-founder of London-based online money transfer company WorldRemit, believes that digital innovation can revolutionise the global money transfer market with safer and more cost-effective ways of sending money. At Cambridge Judge Business School, she teaches students in the Master of Studies in Entrepreneurship programme who are thinking about working in the fintech sector.
Catherine shares some thoughts and insights about the sector and gives some tips to future entrepreneurs:
What do investors look for in fintech firms? Fintech is not different from other startups. Investors are always looking to make high returns. Startups are high risk but also can provide high returns. When considering new investment, investors will consider: what is the size of the market, what’s the potential growth and scale up, what is the product fit, and what the final valuation will look like.
What kinds of people are going into fintech? You don’t need to be a banker or an accountant in order to run a fintech business. From my many years of experience in the sector I’ve met all kinds of people – from ex-bankers, to marketing professionals, to engineers. It is important for the founding team to have complementary skills, or if you are a sole founder to recruit a team of people who will complement your skills. The development of your product will be key to the success of the business, so getting a head of product early on is essential. Finally, let’s not forget that a business depends on the people who works for it. Recruiting talented and passionate people, and developing a culture where people thrive, can only be achieved with the help of a Head of People.
What would be your advice to somebody looking to start a business in this sector? First check your idea with trusted people, such as friends or professionals working in the industry. If it has potential, do your research and decide what you want to achieve. Nowadays it’s quite cheap to set up a business, as creating a website and sharing an office doesn’t cost much. Also, there are many accelerators where you can get financial support. Starting a new business requires a lot of preparation: if you have something different and unique, or something that can be replicated in different markets, this can make a successful business even in a crowded sector like fintech.
What are the main challenges in the sector today? I think the main challenge is regulation, because it is different in various countries. In the US, for example, you’ll need to get 50 licences to cover all the states. It took my company over three years to get through this. I guess you need to decide where you want to do your business – is it in one country or in different continents, as the licencing process is expensive and time consuming. Another challenge is shortage of skills, the same as in other sectors. The majority of fintech startups in the UK are based in London and it’s a great place to be, but demand for talent is high and it’s expensive to live here. Startups struggle to attract and keep talented employees.
What does the future of the sector look like? The sector is still growing and evolving. It started with online payments, but now we have other areas such as blockchain or regtech (regulatory technology). Today fintech startups solve the problems we didn’t have a few years ago, and I’m sure it will be the same in the future. As technology allows people to set up companies more cheaply than before, entrepreneurs are able to offer additional or new services such as banking to financially excluded groups. Technology changes all the time and fintech will keep up with it.