Masters in FinTech: A Comprehensive Business Analysis Report

This report provides a comprehensive analysis of the FinTech industry, exploring its challenges, customer segments, and potential solutions. It delves into the core issues faced by FinTech companies, such as stringent regulations, lack of understanding, funding difficulties, and the need to balance scale and innovation. The report examines various customer segments within the FinTech landscape, differentiating between traditional and non-traditional channels. It proposes solutions to these challenges, emphasizing education, standardization, and the development of innovative services. Furthermore, the report highlights the unique value proposition of FinTech startups, focusing on efficiency gains, improved services, and customer trust. It also analyzes channels, revenue streams, cost structures, key metrics, and unfair advantages. Finally, it includes a lean canvas of a FinTech business, offering a holistic view of the industry's dynamics and opportunities.

Running head: MASTERS IN FIN TECH
Masters in Fin Tech
Name of the Student
Name of the University
Author’s Note

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MASTERS IN FIN TECH
Table of Contents
Introduction..........................................................................................................................2
Problem................................................................................................................................3
Customer Segments.............................................................................................................4
Solution................................................................................................................................5
Unique Value Proposition....................................................................................................6
Channels..............................................................................................................................7
Revenue Streams.................................................................................................................8
Cost Structure....................................................................................................................10
Key Metrics.......................................................................................................................11
Unfair Advantage...............................................................................................................12
Lean Canvas of Fintech Business......................................................................................14
Conclusion.........................................................................................................................16

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MASTERS IN FIN TECH
Introduction
In general, “Financial Technology (FinTech)” is a new innovative technology which aims
to compete with the different types of the traditional financial methods for delivery of financial
services. FinTech aspires to incorporate technology for improving the financial activities. The
incorporation of such a technology is particularly evident with cryptocurrency, smartphones for
mobile banking and investing activities. This technology is seen to be applicable to both startups
and established financial and technology companies. The Fintech solutions and technology
jointly intends to develop and improve the services by taking an improved competitive stance.
Some of the other areas of the application of the Fintech solutions is further seen to be based on
automating insurance, trading, and risk management. The different types of the services
originating to this technology has been further depicted among independent service providers.
This is inclusive of the licensed bank and insurer (Gomber et al. 2018).
The objectives of the different sections of this study is to identify few problems with this
approach. The formulation of solution to this problem will help the entrepreneurs in addressing
the various types of the issues which is relevant to the customers. The next section of the study
has discussed about the customer segments by including a study on the subdivision of market
into discrete groups of customers who shares similar characteristics. This section of the study is
followed with solution which is recognized with specifying the relevant technical features and
describe how it works. The fourth section of the study has identified the Unique value
proposition which and discuss about the different types of the benefit offered by the FinTech
services. The next section has enumerated the channels which are seen to be considered as per
the conventional channels as well as the digital ones which can be used by the customers. The
sixth section of the study has evaluated the on the revenue stream. This evaluation has been
conducive in revealing the earning model, that is, how the startup will make money and apply the

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MASTERS IN FIN TECHmethods by which money comes in. In addition to this, some of the other aspects of thee
learnings were also able to evaluate on the cost structure. This point was able to highlight on the
different aspects of the types and relative proportions of fixed and variable costs that a business
incurs.
Problem
In general, the FinTech revolution is seen to be in full implementation during the last five
years. Despite of its impressive growth, Fintech companies are often identified with number of
challenges which the entrepreneurs are unable to resolve. The six challenges associated to such
companies are listed as follows:
Stringent regulations
The Fintech industry is not aware of the exact regulators and the governing bodies as
evident in the traditional banking and financial institutions. Moreover, this is required by the
companies to create more awareness for the regulations pertaining to complying with the
regulations. The conundrum for this may be a result of delays in receiving the licenses on time
and also the possibility of getting hefty with the fines. Moreover, the GFC of 2008 has a major
role to play in the various type of the process which are seen to be related to the concerns such as
adoption of the new technologies for the delivery of the regulatory requirements (Gomber et al.
2018).
Lack of understanding
In many cases the Fintech Industries are not seen to follow the clear guidelines which
were mentioned previously. In several cases there are also misunderstanding related to the exact
procedures which is needed to be followed in the industry. The main problems are often referred
with the misconceptions arising from the Fintech industry (Jagtiani and Lemieux 2018).

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MASTERS IN FIN TECHHard to attract funding, partners, and teams
The funding process of the Fintech startups are seen to be originating from 2016.
However, this sector fell short by 49% on a global scale from the second quarter of 2016. This is
due to the fact of several industries considering that they do not require startups for building new
products (Walker 2017). For instance, Fintech such as banks and other financial companies are
seen to be facing coronary with the overall uprising of this technology. Moreover, the traditional
banking system is viewing this technology as rivals and not an advantage to them (Arner,
Barberis and Buckey 2016)
Balancing scale and innovation
There are several financial institutions which has considered to differentiate among
themselves. This has been seen to be creating a major problem among with balancing the scale
and innovation. In addition to this, the founders of the business have been seen to be facing
various types of the problems which are related to the tendency of the startups unable to keep up
with the innovation (Dapp, Slomka and Hoffmann 2014).
Fast Moving
In general, it needs to be also considered that the Fintech industry is fast moving and due
to the changing regulations in the market there has been lot of issues which are particularly
evident with making appropriate decisions. Therefore, the appropriate way of keeping up with
the changes are often perceived with the inability to develop out of box concepts for competing
in the financial industry (Rampton and Rampton 2017).

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MASTERS IN FIN TECHCustomer Segments
The customer segmentation in the Fintech is often understood to be ranging in various
types of the traditional as well as the non-traditional channels. It needs to be discerned that the
customers of the numerous types of the traditional channels are often seen to be ranging from
those who are seeking for banking service. These customers are mainly dependent on the various
types of service which is considered with the core banking solutions. The traditional banking
services such as deposits made in current accounts and savings accounts are seen with significant
application of the FinTech solutions. In addition to this, the other applications such as offering of
the insurance and other credit services provided under the traditional banking is supported by the
Fintech and various customers rely on the same (Roialty 2017).
In addition to this, some of the non-core service of the banking are often identified to be
well-thought-out with the transactions which are carried out in the online platforms such as net
banking, e-wallets, online stores, websites and social media. The customers of this particularly
category look forward to the safety and ease of payments made in the online platforms such as
mobile, tablets and desktops. The different types of the non-traditional solutions are based on the
number of aspects of the Fintech applications in the payment gateway and options for payments
(PwC 2018).
Solution
The present problems in terms of the lack of understanding needs to be resolved with
educating more people about the technological synergies which may be brought by FinTech.
This will prevent the possible misunderstandings in the first place. This is depicted as the
responsibility of Fintech companies for educating the customers of insurance and other credit
services provided under the traditional banking system which are supported by the Fintech
(Vives 2017). In addition to this, some of the non-core customers are considered with the

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MASTERS IN FIN TECHindividuals relying on transactions which are carried out in the online platforms such as net
banking, e-wallets, online stores, websites and social media. The major education can be mainly
done through FinTech websites which will ensure that the customers do not face any
understanding issues with the different types of the FinTech services (He et al. 2017).
The several types of the initiatives associated to Balancing scale and innovation has been
represented as per innovative initiatives which are aimed at making particular choices for
standardization of the services so that they will be able to scale and keep innovating in the
respective fields. The standard way of keeping up with the relevant technologies are further seen
with keeping room for one-size-fits-all product or service. In general, the banks are already
involved in building their own FinTech teams. Therefore, the main services associated to this
technology should be based on developing outside-of-the-box concept required for the financial
industry (Magnuson 2018).
Some other solutions to the FinTech needs to be depicted with various types of services
ranging from improved service, better branding and offering cheaper prices. The improvement in
the service needs to be decided with the incorporation of the various types of the technologies
which should be based on gaining the trust of the customers. The employees engaged in the non-
banking transactions should be able to provide an unbiased perspective which it is trying upend.
The incorporation of the modern marketing tools such as gamification are responsible for
mundane task such as budgeting appear to be more exciting and palatable. Having a cheaper
price will enable in maintaining a leaner virtual operation which will be focused on offering
more flexibility as cash from venture capital will allow the fintech startups for attracting a
greater number of customers at a competitive pricing (Dapp and Slomka 2015).

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MASTERS IN FIN TECHUnique Value Proposition
The unique value propositioning strategy is related to the FinTech startups. The key to
such startups needs to be identified with the historical process knowledge. The Unique Value
Proposition needs to be identified in terms of providing the banks with the efficiency gains
which may be passed to the consumers for better pricing. The improved service needs to be
further identified among the FinTech startups. Therefore, the collaboration of the FinTech
solutions with the newer infrastructure will be able to deliver malleable, transparent, fast and
unique value to the customers. Moreover, the enormous financial resources and technological
prowess will be particularly beneficial for achieving the relevant targets by the banks
(Allerin.com 2018).
The end game to be included by the banks needs to be set up with the start ups which is
often confusing. In case the outcome for this comes out to be well then, the different types of the
other initiative created for generating the unique value propositioning needs to be included with
core value added services which is essential for the investors. It is often said that the UVP needs
to be also created with the providing a certain value through which the clients will be able to
differentiate among the internal and the external innovation (Ey.com 2018). The banks need to
be innovative with the capital and startup upshot for the Fintech ventures. This can be
capitalized with equity without the need of any additional involvement of the transfer pricing and
external hiring. Changing the Cost Culture of Cross-Subsidization should be the focal motive of
the banks. This in particular will be effective in creating additional synergies in lesser amount of
time. There also needs to be significant amount of the considerations which should be related to
the number of the procedures which should be related with the relevant cost accounting methods.
The incorporation of the FinTech with relevant cost accounting methods will be beneficial for
creating more value in terms of bringing transparency pertaining to increasing amount of costs
more pressure pertaining to the fulfillment of the short-term goals thereby reaching the expense

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MASTERS IN FIN TECHof long term planning. The cost further increases with the arrival time and estimation of the
increased bank cost (Toptal Finance Blog 2018).
Channels
It needs to be further inferred that the Banks and FinTech companies needs to consider
the different types of the factors which are often inferred with the digital channels managing
their lives. The FinTech users in general are seen to particularly focus on the managing their
lives through digital channels. This is particularly evident among 64% of the FinTech users. If
we compare the same with the Non-FinTech users this needs to be depicted with 38%. The most
popular channels for FinTech is often identified with the platforms such as on-demand services
and economy sharing. The FinTech firms will be further able to offer new services which will be
able to provide number of services pertaining to the new channels which were unmet previously.
These businesses are better able to preserve the periods without the revenues required for the
development of the right adoption channels which will be conducive for the overall growth of the
users ultimately contributing to generating the revenues (Kaivanto and Prince 2017).
Some of the newest addition to the Fintech channel can be referred with the unique
positioning of PayPal. This particular channel is relevant with operating in two-sided platform
and thereby able to create a deep trusted relationship by including the merchants and consumers.
In this way the company will be able to deliver the unique value proposition relevant to the
consumers and merchants for connecting to the newer platforms such as social media and
mobile. As the operation of the commerce is seen to relevant in the newer areas of the Fintech
channels. the managing of these elements is seen to be getting a huge boost. The raid adoption of
the different types of the mobile technology has been particularly effective in terms of the
redefining the face of the retail industry and create new opportunities for bringing the consumers
and merchants closer together. The additional innovations such as the services related to mobile-

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MASTERS IN FIN TECHfirst P2P and remittances have been conducive for driving low fund contribution to the
ecosystem. The continuation of digitization of the money has been effective particularly with the
key tenet for the customer acquisitioning efforts (Demirguc-Kunt et al.2018).
Revenue Streams
The sources of finance for the Fintech solutions are discussed below as follows:
Brokerage Fees
The different sources of the removes from the brokerage fees are often identified in terms
of the payments from received from Fintech channels such as PayPal. This generally seen with
PayPal charging 3% fees on the transaction. The money transfer firms are depicted to the charge
a certain fee for the conversion of the currency to the clients. This is also seen to be event with
the various commuters of the Fintech who charge a brokerage fees on top of currency
conversion. Additionally, the online stock brokers are seen to be using technology such as
Fintech 1.0. This is often used to take old school stock brokerage for the services which are
brought online for earning commission every time at the time of trading. The market place
lenders such as Lending Club are inferred to the dealing with number of the brokerage service
which are often depicted to be involved with the interested lenders. In this return the lenders the
seen to be receiving certain percentage pertaining to the transaction. The insurrect companies are
seen to be involved with receiving premium payment for writing down the insurance policies
(Buchak et al. 2018).
Service Fees
The service fees are often inferred with the automated investment portfolio managers for
the betterment of investment pertaining to the robo-advisors. The online lenders are depicted

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MASTERS IN FIN TECHwith writing off the balance sheet for the companies receiving the interest payments from the
borrowers (Arner, Barberis and Buckley 2015).
Lead generation
The revenue from the lead generation is often seen with receiving a certain fee for
sending to the customers for partnering of FinTech solutions. These businesses may not be
serving to the end customers however such models may be also earning certain sum pertaining to
the traffic and leads generated by the customer insurances. The monetizing of the customer data
is often created with the win-win situation which is beneficial to the customers pertaining to the
highly relevant and useful offers (Philippon 2016).
Cost Structure
The inclusion of the different types of the fixed costs for the startup of the Fintech
Business needs to be inferred as per Premises (Rent & Rates), Internet Services, Hosting for
Website, Electricity and Rent (Oshodin et al. 2017). The estimation of the total fixed cost for the
startup of the new business is identified as $ 73,600. The inclusion of the different types of the
variable cost aspects needs to be considered with items such as Salaries, Interest on loan 8%,
Accountant Fees, Market survey, Preliminary expenses, Lease payments, Maintenance of
website, Sales and Marketing. The total variable cost for the startup of the Fintech business is
identified with $339,050. Therefore, the total proportion of the fixed cost to variable cost for the
startup of the fintech business is depicted as $73,600/ $339,050 = 22%.
Start Up Cost of Fintech Business
Start-up Expenses
Particulars Amount ($)
Variable Costs Salaries $193,000

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MASTERS IN FIN TECH Interest on loan 8% $2,500
Accountant Fees $120,000
Market survey $3,100
Preliminary expenses $5,200
Lease payments $3,000
Sales and Marketing $10,500
Maintenance of website $1,750
Fixed Costs Premises (RENT & RATES) $36,000
Internet Services $6,500
Hosting for Website $23,000
Electricity $3,500
Rent $4,600
Total Fixed Costs $339,050
Average Monthly Costs
Premises (RENT & RATES) $3,000
Lease payments $250
Interest on loan 3% $208
Maintenance of website $146
Electricity $292
Salaries / Wages $16,083
Total Average Monthly Costs $19,979
x Number of Months: 12
Total Monthly Costs $239,750
Total Startup Expenses $578,800
Start-up Assets
Owner Funding
Owners Fund $75,000
Total Owner Funding $75,000
Loans
Bank Loan $25,000
Other
Total Loans $25,000
Total Start up Funds $100,000
Assets
Network Equipment $15,000
Computers $32,000
Software $12,500
Total Fixed Assets $59,500
Total Start-up Assets $159,500