Strategy: core competency fintech companies

Building your core competency and assessing your competitor's core strengths are part of strategic plans

An effective business strategy allows a company to systematically allocate its resources and energy towards profitable growth by delivering value to customers better than competitors. It provides direction amidst an uncertain business landscape.

Let's consider Financial Technology (Fintech) companies and understand core strengths of some of the companies.

Fintech companies often have distinct core competencies that enable them to excel in the financial technology sector. These core competencies can include technological innovation, data analytics, user experience design, and regulatory expertise.

The core competencies of fintech companies vary depending on their specific focus and offerings. However, some common core competencies include:

• Technology: Fintech companies rely heavily on technology to deliver their products and services. They have core competencies in developing and maintaining innovative software and hardware solutions.

• Data and analytics: Fintech companies collect and analyze vast amounts of data to understand their customers' needs and develop new products and services. They have core competencies in big data analytics, machine learning, and artificial intelligence.

• Security and compliance: Fintech companies must comply with a variety of security and regulatory requirements. They have core competencies in cybersecurity, data protection, and risk management.

• Customer experience: Fintech companies are focused on providing a seamless and convenient customer experience. They have core competencies in user experience design, customer service, and fraud prevention.

Here are some examples of core competencies for well-known fintech companies:

​PayPal: Digital Payments: PayPal's core competency is its ability to facilitate digital payments and money transfers securely and seamlessly. They have developed advanced payment processing systems and fraud prevention technologies. Square: Mobile Payments and Point-of-Sale (POS) Solutions: Square specializes in mobile payments and provides innovative POS solutions. They offer easy-to-use hardware and software for businesses, enabling card payments and managing sales and inventory. Stripe: Payment Processing Infrastructure: Stripe excels in providing a flexible, developer-friendly platform for online payment processing. Their core competency lies in creating simple and robust APIs for businesses to accept payments. Robinhood: Commission-Free Trading: Robinhood's core competency is offering commission-free stock and cryptocurrency trading. They have simplified the trading process and made it accessible to a broad user base. Adyen: Global Payment Solutions: Adyen specializes in providing global payment solutions for e-commerce businesses. Their core competency is enabling merchants to accept payments from customers all over the world through a single platform. Revolut: Multi-Currency Banking and Financial Services: Revolut's core competency is providing multi-currency accounts, international money transfers, and a range of financial services. They focus on a seamless user experience and cost-effective currency exchange. Plaid: Financial Data Connectivity: Plaid excels in creating connections between financial institutions and fintech applications. Their core competency is enabling secure access to banking and financial data, facilitating services like account aggregation and payments. SoFi: Online Lending and Financial Services: SoFi's core competency is in offering online personal loans, student loan refinancing, and a range of financial services. They aim to simplify financial decision-making for their customers. Klarna: Buy Now, Pay Later Solutions: Klarna's core competency is providing "buy now, pay later" services for online shoppers. They offer a convenient and flexible payment option for consumers. Coinbase: Cryptocurrency Exchange and Wallet Services: Coinbase specializes in cryptocurrency trading and wallet services. Their core competency is providing a secure and user-friendly platform for buying, selling, and storing digital assets.

Chime: Chime has a core competency in providing mobile-first banking services. This has allowed the company to attract a large customer base of underbanked and underbanked consumers.

These fintech companies have carved out their niches in the financial technology sector by focusing on specific core competencies that address the needs and demands of their target audiences. Their competencies often revolve around leveraging technology to create more efficient, user-friendly, and innovative financial services and solutions. By focusing on developing and maintaining their core competencies, fintech companies can stay ahead of the competition and continue to innovate.

Sash Barige

Nov/29/2020

Further read: Fintech industry publications like "Fintech Magazine," "Fintech Futures," and "American Banker."

• Reports and research from organizations like CB Insights, Statista, and PitchBook.

PayPal: Global payments processing and settlement capabilities at scale (Forbes - https://www.forbes.com/advisor/business/paypal-competitors/)

• Ability to easily integrate digital payments into merchant and consumer workflows (PYMNTS - https://www.pymnts.com/news/payment-methods/2021/paypal-core-competencies-keep-it-competitive/)

Square: Seamless omnichannel point-of-sale solutions for online and offline sellers (Forbes - https://www.forbes.com/advisor/business/square-competitors/)

• Integrated suite of services including payments, payroll, loans (Squareup.com - https://squareup.com/us/en/solutions)

Robinhood: User-friendly investing and trading mobile app experience (Fortune - https://fortune.com/company/robinhood/fortune500/)

• Commission-free trading model that disrupted incumbent brokerages (Investopedia - https://www.investopedia.com/robinhood-competitors-5071855)

SoFi: Customized digital finance products including student loan refinancing, mortgages, and more (Forbes - https://www.forbes.com/advisor/personal-finance/sofis-business-model/)

• Strong focus on customer experience and community building (SoFi - https://www.sofi.com/about/)