Latest Updates

The 3+1 essential competences of FinTech startups   



In August 2013, Samarth Shekhar had the idea for the FinTech Forum, which we then implemented together within a few days. Since then, we have identified and analyzed more than 800 FinTechs from German-speaking countries. As part of 17 “FinTech Forum” and “FinTech Forum on Tour” events, we got to know 270 startups and founders and over 100 investors in person. More than 200 FinTech startups have already disappeared from the scene.

The question then arises, what sets successful fintech startups apart from those who have to give up?

From my point of view, there are three important key competences that are needed by FinTech Startups and their founders:

  1. Build great, customer-oriented products
  2. Strong in business development
  3. Skill in dealing with investors


  1. Build great, customer-oriented products

Essentially, building great, customer-focused products is about creating at least one unique selling point in the competition, inspiring your own banking customers, and providing them with tangible value. This can be done in many ways.

For example, N26 was able to win over a million mobile banking customers in just a few years. N26 managed this with a very simple but especially user-friendly product for the targeted target group: the N26 smartphone banking app.

Compared to established banks and savings banks, FinTechs can attract customers at lower prices. The Robo-Advisor quirion is a good example of much cheaper digital investments.

Novel services are also a source of great FinTech products. The smooth integration of Bitcoin into the Bitwala bank account is an example of a financial service unprecedented in the market. This allows customers to buy and sell cryptocurrencies in real time within a German bank account in real time and to exchange the corresponding equivalent values in euros, 24 hours a day, seven days a week. For many crypto enthusiasts a unique selling point.

In addition, many of FinTech’s great products feature fully automated financial services that scale cost-effectively. A good example is kapilendo – the Crowd platform for corporate finance. There, all processes are completely automated. Customers can select an investment project in a few minutes and fully finance a business, including a loan agreement and money transfer.

The B2B FinTech Mambu has succeeded in developing the latest generation of a “core banking system from the cloud”. Launched in May 2011 as a student project, Mambu has since gained more than 100 financial service providers as customers worldwide. And it is no coincidence that the successful FinTech N26 can also be found on the Mambu customer list. In the meantime, Mambu has even made it into the Gartner Magic Quadrant for core banking systems, attacking names such as SAP, Oracle or Temenos with its product.

  1. Strong in business development

While many FinTech startups are developing a well-functioning product, most people find it difficult to successfully manage sales and business development and to communicate their respective unique selling points.

Although more than 400 FinTechs have started with the target group “private customers”, so far only a few, such as SOFORTüberweisung (now Klarna) or N26, have managed to reach more than one million customers.

Only very few B2C FinTechs succeed in cleverly combining appropriate digital marketing with social media and “word-of-mouth advertising” in order to clearly highlight the product benefits perceived by the customer and to achieve low customer acquisition costs.

Many FinTechs underestimate how much money is needed in the German highly competitive B2C banking market to gain a seven-digit and thus relevant customer base. Even at N26 one can expect customer acquisition costs of at least 25 euros per customer, making 25 million euros for each million new customers. – Compared to traditional banks and savings banks, this is significantly less than one fifth. Nevertheless, in order to achieve sustainable business success in B2C banking as a FinTech startup, you must be able to raise the necessary money.

A good example of how B2C FinTechs can be successful in attracting customers even with limited marketing budgets is Scalable, who is now the leading German Robo consultant. In particular, through the cooperation with ING-DiBa, with more than nine million customers of Germany’s largest online bank, Scalable was able to break through a managed assets of over one billion euros within a few months.

The B2B FinTech Mambu shows that with rapid adjustments and the right sponsors, it is possible to shake up the now dusty market for core banking systems. Certainly, Henning Kagermann, former CEO of SAP, and David Hamilton, former president of SunGard Financial Systems’ global banking business, assist in the distribution and placement of the right B2B contacts.

  1. Skill in dealing with investors

In Germany alone we were able to meet more than 100 FinTech investors. From business angels to classic and corporate VCs to family offices. Distributed throughout Germany there are interested FinTech investors of all kinds. Some examples are EARLYBIRD (N26, Smava), FinLab (kapilendo, FastBill), Stefan Franger (Traxpay), CommerzVentures (Mambu, payworks) and Dieter von Holtzbrinck Ventures (wikifolio, NDGIT).

While at the beginning of our FinTech Forum in August 2013, a well-prepared business plan was often sufficient to attract an investor for its own FinTech, professional FinTech investors now expect significantly six-figure annual sales before they seriously engage in conversation with a FinTech.

The quality of FinTech Startup business plans has increased significantly in recent years. Some of the best business plans include: a clear and understandable vision (N26 – “Secure Banking on Your Smartphone”), the solution of a real existing problem (Mambu – “Replacement of Legacy Core Banking Systems”) or creation of new customer demand (Kapilendo – “Crowd Loans for the middle class “), the market potential and how it is concretely developed, unique selling points (Bitwala -” Bitcoin bank account “), prototype or beta solution with first enthusiastic and paying customers, a clear and comprehensible financial planning and ambitious, implementation oriented & hard working founders & team.

The best FinTech founders succeed in convincing investors of their own startup through good preparation for a meeting, detailed market and customer knowledge, enthusiasm for their own product and personality. The FinTechs who successfully collect money have obviously understood the different needs, preferences, wishes and hopes of their investors.

It is a question of whether the three competences “product”, “sales” and “investor” are sufficient to become a successful FinTech. For a quick exit, e.g. If sold to a major local or international competitor or a traditional financial services provider, the three essential competencies will suffice in many cases. For example, the Munich-based payment provider Payworks was purchased by Visa. FinTech Givve, which specializes in company prepaid credit cards for employees, was acquired by the French Up Group. And was bought by Scout24.

The fourth competence: Profitability firmly in focus

In order to develop a sustainable profitable banking business model, a fourth competence will be necessary: ​​having an eye on profitability. Here, it is important to design the operating model in such a way that the perceived customer benefit is also priced by the customers and thus an ideally scalable profit can be achieved with the lowest possible operating costs. With regard to good profitability, there are only a few examples of known FinTechs in the German-speaking world. The currently most expensive German FinTech N26, with a valuation of more than 3 billion euros, currently appears to be very far away from profitability. Among the few German fintechs that are already making a profit is Fino, a B2B startup based in Kassel specialized in DataScience, Finance and Documents. And the business models of Exporo (digital real estate investments) and Fincite (software for digital asset management) also seem to have a strong focus on profitability. All three have in common that they are B2B or B2B-related business models. – In my view, no coincidence.