New technology is currently revolutionizing the financial industry. New products from fintech startups and established companies are drastically changing how financial institutions provide financial services for clients.
The fintech industry has disrupted the financial industry by creating tools to make financial transactions more efficient, accessible, and profitable.
A fintech product is something that uses technology to facilitate financial services. Examples include mobile payment methods, online crowdfunding, cryptocurrency, robo-advisors for wealth management, and peer-to-peer lending.
However, fintech companies have obstacles. The challenges faced by the fintech industry — and thus fintech product management — include:
Complying with regulations
Protecting data
Finding tech talent
Meeting stakeholder expectations
Gaining shoppers' attention on the market
What is a fintech product manager's responsibility? In any tech company, a product manager ensures their product meets customer needs while aligning with the business’s objectives. In a fintech company, the product manager does this for financial technology. They research the industry for unmet needs and form a product strategy with functionality that satisfies users and profits the company.
If you intend to serve as the senior product manager in a fintech company, be aware of the biggest challenges in the industry.
1. Regulatory Compliance
The financial industry adheres to many regulations that hold companies to ethical practices. Any fintech company providing financial technology must comply with laws and procedures.
Regulations facing fintech organizations standardize how they handle fraud, data security, money laundering, risk regulation, taxation, and other methodologies.
Here in Europe, some of the most significant regulatory agencies policing fintech companies are:
The European Commission (EC)
The European Central Bank (ECB)
European Banking Authority (EBA)
The Global Financial Innovation Network (GFIN)
The European System of Financial Supervision (ESFS)
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
Financial Conduct Authority (FCA)
Most fintech companies provide products and services used around the globe. When operating in multiple countries, fintech organizations are subject to all of the regulations for those jurisdictions. A fintech company based in New York, San Francisco, or Los Angeles would have different regulatory requirements than one based out of the UK.
A fintech product manager must know and abide by the regulations in every geographic location and industry they operate in. Otherwise, their company could face severe penalties reaching millions of dollars.
2. AI & Machine Learning Expertise
Artificial intelligence is evolving at a staggering rate. Fintech companies are racing to understand how to harness AI as a tool for supporting financial institutions.
AI can use big data and perform calculations much faster and more precisely than people. AI is helpful in:
profiling risk scores
monitoring data and market trends
detecting suspicious activity and fraud in real-time
performing transactions efficiently
collecting information on user habits, interests, and activity
personalizing customer experiences
AI stands to revolutionize the financial industry, yet it has presented a hurdle for fintech product managers. Why? AI daunts many financial companies for its novel functions and rapid development; they'd instead continue using outdated, familiar tech stacks than adopt AI.
The financial sector needs AI experts who understand the technology, can train others, and will stay up-to-date on developments. The product manager must see opportunities in AI for their digital systems and services, then help their company and customers embrace them.
3. Seamless User Experience
A fintech product must provide a satisfying user experience to achieve ongoing customer retention. Financial processes can confuse the average consumer, so digital fintech products must provide a user-friendly experience. A good fintech company will include cross-functional teams with knowledge of technology and finance.
A product manager bears the responsibility to help the product team create new technology that walks a tightrope. A fintech product should be:
unique, yet familiar
innovative, yet easy to understand
simple to navigate, yet tricky to hack
avant garde, yet accessible
fulfilling, yet addictive to return for
How can a company successfully create a highly technical product that satisfies all these expectations? Unsurprisingly, most financial apps have a shallow user retention rate, only 4.6% after 30 days.
A streamlined UX is just as important as software development and computing advancements made in the back end, while also incorporating internal data security to mitigate breaches. It’s a challenging balance of simplicity and strength.
Many fintech companies need help to strike that precise balance with their products. That’s why product managers face a significant challenge in achieving customer satisfaction in their target audience.
4. Cybersecurity
Security breaches are a costly threat in the fintech sector. Hackers always seek opportunities to steal personal data like credit card information from mobile apps and vulnerable fintech software.
Tech-minded financial companies are constantly at risk of data breaches, so fintech products must remain one step ahead of hackers. All fintech applications should prioritize data security and keep their virtual security walls impenetrable.
If customers are concerned about their privacy or security being violated using your product, they won’t use it. A bad reputation is a death mark for a fintech company.
5. Blockchain Integration
Many companies in the fintech market have begun to embrace blockchain technology as a significant opportunity for tracking financial transactions. Fintech products ranging from digital wallet apps to finance-management systems can benefit from blockchain.
And, as you’re probably already aware: The global blockchain market is predicted to grow staggeringly in this decade.
The technology removes third parties from transactions, provides a decentralized data exchange system, and creates digital ledgers. These features solve many challenges facing the fintech industry.
For a fintech company to flourish, it must seriously consider jumping on the blockchain train. However, blockchain poses some challenges, as the technology is:
Still new and developing
Costly to maintain
Not feasible for some financial solutions
Likely to make traditional banks suspicious (because blockchain bypasses them)
Going to create skepticism within governments (because it’s difficult to regulate)
6. Diverse Stakeholders
Think about all the people you have to please when creating a new product: regulators, lawyers, users, sales, marketers, executives, and engineering teams, just for a start. Everyone has a different definition of success based on various KPI metrics. Company leaders and clients care about profitability, whereas users value your product’s design.
As a fintech product manager, you need the communication skills to interact with all of these stakeholders — and then consider their expectations. An agile team will deliver their work in small but consumable increments, instead of betting on a “big bang” launch.
Ensure everyone internally signs off on the product roadmap before you begin. Personally engage with everyone regularly. This involves:
updating them on the progress
answering their questions
sending reports
keeping communication channels open
understanding their points of view
negotiating to reach approval
The work culture in a fintech industry can be tense if certain voices aren’t heard and expectations aren’t met. Every stakeholder’s input should be heard and considered by the product manager — even if their suggestions aren’t implemented in the final product.
Hearing everyone out will at least foster an environment of collaboration. Stakeholders and users are equally part of a company's partnerships and should both be kept in mind.
7. Successful Marketing Initiatives
Even if your fintech company has created a great product, it could flop when it hits the market. Some well-designed super apps and financial software have bombed upon their release. Why? They need a better marketing strategy.
As the product manager, you need to clearly understand your product’s target users, what benefits it provides, and how it stands apart from competitors. This is a challenging task.
Competitors pop up every month with new fintech solutions. It’s expensive to monitor the ever-changing market and adjust accordingly continually. Many tech companies only revisit the market after their initial inspection once they’re ready to launch their product.
Instead, consider your go-to-market plan throughout development, even as early as the initial product roadmap. Your approach needs to encompass all forms of effective advertising, collaboration, and influencer promotion.
Work closely with your company’s product marketing manager if you have one. The difference between a product manager and a product marketing manager is that the marketing manager oversees the launch of a product on the market after the product manager has created it. Both job titles are necessary to establish a successful outcome.
Overcoming Challenges in Fintech Product Management
How can you conquer these fintech challenges? Here are some maneuvers you can make as a product manager:
Work with a legal consultant or hire a compliance specialist to ensure regulatory compliance.
To promote AI usage, use machine learning to train the system using data sets.
To provide a great user experience, obtain continual feedback from real-world testers.
To resist data breaches, use security features like biometric authentication, two-factor authorization, encryption, and real-time activity notifications. Perform rigorous testing before every update.
To navigate blockchain technology, see how other fintech companies have integrated blockchain, and decide if it could work for your product.
To please disparate stakeholders, consider their ideas for the product, even if it’s not something you will use.
To create a successful marketing strategy, get marketing team members to thoroughly understand your product, its target audience, and its main competitors.
Here's a great start:
Form a cross-functional product team with diverse perspectives and expertise to guide product development.
Have a risk management analyst on your team to monitor threats from regulations, fraud, cyber infiltrators, and other sources.
Include a marketing spokesperson on the team, an RPA developer, and a sustainability expert.
Product Managers: Find Your Next FinTech Job
Why is there a need for project management leadership in fintech? Many traditional banks and credit unions outsource their fintech solutions to independent companies or contract fintech product managers to help develop financial products.
There are hundreds of fintech product managers in Europe, yet thousands of fintech product management jobs to fill. Fintech companies desperately need product management experts who can lead the creation of new products and navigate the evolving financial industry.
How much does an IT product manager in FinTech make? Full-time fintech product manager jobs average a salary of €110,000-€140,000 in Europe. A product manager’s salary depends on factors like the job market, company budget, and years of experience, so the top fintech product manager jobs can pay as much as €180,000 a year.
However, you don’t need to be a world-renowned senior manager with a long track record to get a well-paying job in fintech. All you need is work experience in the I.T. field that you can use to develop new financial technologies on a product team.
Switch your career to fintech when you apply to join the MVP Match freelance network. We can connect you with a financial company or tech startup that needs your I.T. or product development skills — where you’re the ideal candidate to fit the job description.
