# The Next Wave of Fintech is here Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-09-27 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: What Second Generation Fintech Companies Should Keep in Meta Description: Discover what lessons second generation fintech companies should learn from their predecessors to succeed and innovate in the ever-expanding market. URL: https://financedigest.com/the-next-wave-of-fintech-is-herehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1324440713-1736815151847-compressed.jpg) ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/1-fd-450x702-1736815151885-compressed.jpg) **_Much has been made of the ‘second generation’ fintech movement recently, but what have these businesses learned from those entering the market for the first time?_** **_In this article, Lena Hackelöer, founder and CEO of Brite Payments provides some clarity on the subject. Specifically, Lena provides insight on what second generation companies should keep in mind when looking to grow._** Who remembers the early days of the fintech wave? Cast your mind back to the beginning of the 2010’s, when the term first began to [filter into the broader business](https://www.financedigest.com/the-medical-tourism-market-is-estimated-to-substantiate-i-e-grow-at-a-handsome-rate-in-upcoming-years-the-present-day-scenario-implies-the-adoption-of-smarter-ways-to-do-business-as-such-digital.html "The Medical Tourism Market to get filtered through organic digitized growth") lexicon. At that time, there was still a [big question around the sector’s](https://www.financedigest.com/finance-is-the-next-big-sector-to-be-ubered.html "Finance is the next big sector to be Uber’ed") true potential. In the ten [years since](https://www.financedigest.com/japans-emperor-gives-first-public-new-years-greeting-since-2020.html "Japan’s emperor gives first public New Year’s greeting since 2020"), the fintech sector has been on an incredible journey. Following impressive funding rounds, record-breaking IPOs, and skyrocketing usage rates, it’s now abundantly clear that fintech plays an [important role in our everyday personal and business](https://www.financedigest.com/the-importance-of-property-care-looking-after-your-business.html "The Importance of Property Care: Looking After Your Business") lives. _So, on that topic, now that fintech has reached a new stage of maturity, what [comes next](https://www.financedigest.com/whats-coming-next-in-the-clearing-and-settlement-world.html "What’s coming next in the clearing and settlement world?")?_ I believe the answer to that question is underlined by second generation [fintech businesses](https://www.financedigest.com/fintechs-support-of-ukraines-digital-businesses-can-be-used-as-blueprint-across-the-world.html "Fintech’s support of Ukraine’s digital businesses can be used as blueprint across the world"). Across the world, a new wave of companies is emerging who want to learn from the experiences of the businesses that came before them and transform [sectors for the benefit of merchants and consumers](https://www.financedigest.com/consumer-durables-sector-still-feeling-the-effects-of-recession.html "Consumer durables sector still feeling the effects of recession") alike. The question is, what should they consider? **SOLVING PROBLEMS** [TODAY AND PREPARING FOR TOMORROW](https://www.financedigest.com/in-planning-for-today-dont-lose-sight-of-tomorrow-avoiding-short-termism.html "In planning for today, don’t lose sight of tomorrow – avoiding short-termism") In the past, we saw many [fintech business models enter the market](https://www.financedigest.com/2021-and-the-fintech-market-bonanza.html "2021 and the fintech market bonanza"), and quickly gain popularity by addressing very tangible consumer preferences and transforming these into broader, valuable consumer propositions. BNPL is a strong example of this, where a [business model was developed in response to consumer](https://www.financedigest.com/citigroup-says-will-close-russian-consumer-commercial-business.html "Citigroup says will close Russian consumer, commercial business") preference. [Online shopping](https://www.financedigest.com/the-high-street-is-dead-long-live-online-shopping.html "The high street is dead – long live online shopping! ") was a relatively new phenomenon for the mass market, and customers wanted a way to ensure they would receive what they paid for. [Early BNPL providers capitalised on this with innovation in the payment process which meant that customers could now pay](https://www.financedigest.com/7-questions-to-ask-before-paying-off-your-mortgage-early.html "7 Questions to Ask Before Paying Off Your Mortgage Early") for their products once they had arrived. Furthermore, and crucially, the business models allowed for evolution to suit changing consumer preferences – in BNPL, we see this today with the varied payments options current providers are offering, including pay [later](https://www.financedigest.com/weighing-up-buy-now-pay-later-what-you-need-to-know-before-you-invest.html "Weighing up Buy Now, Pay Later: What you need to know before you invest") and pay in 3. Furthermore, [significant revenues in the BNPL space today are also generated from the additional value-added services](https://www.financedigest.com/hermes-bolsters-sme-service-with-significant-investment.html "HERMES BOLSTERS SME SERVICE WITH SIGNIFICANT INVESTMENT") they have provided, such as moving payment due dates for a fee or converting invoices to instalment payment plans post-purchase. PayPal is another great example, again addressing the complexities of online shopping, but this time focused on streamlining the input and sharing of card details across multiple websites. PayPal created its first [product based on a tangible consumer](https://www.financedigest.com/bagasse-tableware-products-market-will-top-us-3-75-bn-by-2031-as-consumers-proclivity-for-eco-friendly-and-single-use-product-purchase-grows.html "Bagasse Tableware Products Market will top US$ 3.75 Bn by 2031 as Consumers’ Proclivity for Eco-Friendly and Single-Use Product Purchase Grows") pain point, but again, created a great deal of scope for product development in subsequent years, pioneering an express button which offered a true one-click checkout experience. Following the evolution of consumer needs, the company now offers a variety of additional [payment services](https://www.financedigest.com/igtbs-payments-services-hub-faq.html "iGTB’s Payments Services Hub – FAQ"), including debit cards, BNPL and credit card readers. It is clear to see the advantage that this approach afforded first wave businesses to build from. For second generation fintechs, prioritising solutions for immediate, tangible consumer needs, can help to garner quicker gains in terms of sales, market [share and revenue](https://www.financedigest.com/ubisoft-shares-slump-20-after-french-video-game-maker-warns-on-revenue.html "Ubisoft shares slump 20% after French video game maker warns on revenue"). However, this must be teamed with a strong assessment of [market evolution forecasting of consumer](https://www.financedigest.com/analysis-jpmorgan-goldman-bet-on-tech-to-crack-uk-consumer-market.html "Analysis: JPMorgan, Goldman bet on tech to crack UK consumer market") needs. Ultimately, as we have seen, this dual [approach supports diversification and can help to generate more reliable demand](https://www.financedigest.com/oil-falls-on-demand-worry-as-fed-make-or-break-moment-approaches.html "Oil falls on demand worry as Fed ‘make or break moment’ approaches") in the longer term. **[BUILDING ON STRONG](https://www.financedigest.com/reckon-one-builds-momentum-with-strong-backing-from-accountants-joining-the-cloud-advisor-programme.html "Reckon One builds momentum with strong backing from accountants joining the Cloud Advisor Programme") FOUNDATIONS** The foundations on which the fintech sector has been built are now solidified, which is a relatively modern phenomenon. When the first wave of fintechs entered the market, they were typically building their products with more fragmented infrastructure, which was much more technologically intensive but also created a [competitive advantage](https://www.financedigest.com/turning-big-data-compliance-into-a-competitive-advantage.html "TURNING ‘BIG DATA’ COMPLIANCE INTO A COMPETITIVE ADVANTAGE") if you could build a superior product to your competitors. Whereas, for second generation fintech companies, a great deal of the infrastructure required is now readily available as a standard across the industry, for example – white label [credit cards](https://www.financedigest.com/uk-credit-card-borrowing-rises-by-most-since-2005-boe.html "UK credit card borrowing rises by most since 2005 – BoE") which can now be issued with little effort, and consumer lending services which can be built on out-of-the-box ledger systems. This development has significantly levelled the [playing field](https://www.financedigest.com/using-agility-to-resist-economic-instability-and-level-the-playing-field.html "Using agility to resist economic instability and level the playing field") for fintechs in terms of product functionality, therefore the competition is fiercer than ever. For the market, this is a very positive [development because it drives companies to be more innovative](https://www.financedigest.com/avaloq-enlarges-innovation-ecosystem-through-launch-of-developer-portal.html "Avaloq enlarges innovation ecosystem through launch of developer portal") and pay even closer attention to their customer’s needs. Second generation [fintechs must focus on creating and evolving their unique value](https://www.financedigest.com/fintech-incubation-more-value-than-meets-the-eye.html "FINTECH INCUBATION: MORE VALUE THAN MEETS THE EYE") proposition, looking at wider aspects of the business to leverage strengths against competitors in order to grow their market share. **FOCUS ON TALENT** During the first wave of fintech, there was naturally an environment where particular skill sets were not yet available because the [industry had not previously existed to develop](https://www.financedigest.com/image-guided-surgery-devices-market-recent-industry-developments-and-growth-strategies-adopted-by-players.html "Image Guided Surgery Devices Market: Recent Industry Developments and Growth Strategies Adopted by Players") them. Whereas now, second generation fintechs really have an advantage to capitalise on building teams with [talent that has worked in the same field or performed particular skills](https://www.financedigest.com/banks-and-insurers-right-to-prioritise-technical-skills-in-operational-risk-but-must-not-overlook-training-in-nurturing-talent.html "Banks and insurers right to prioritise technical skills in operational risk but must not overlook training in nurturing talent  ") in a similar role previously. These talented individuals have in-depth experience to draw from on both in approaches to follow, and [lessons to learn](https://www.financedigest.com/learning-the-lessons-of-the-bangladesh-bank-heist.html "LEARNING THE LESSONS OF THE BANGLADESH BANK HEIST") from previous employers. A big consideration for fintechs now is building a diverse team – with a great mix of both industry experienced experts, and [driven individuals who may be new to the sector but bring a fresh perspective and may be able to switch to a consumer](https://www.financedigest.com/growth-in-sales-of-fed-microbial-market-to-be-largely-driven-by-rising-consumer-adoption.html "Growth in Sales of Fed Microbial Market to be Largely Driven by Rising Consumer Adoption") mindset more easily. **BRITE PAYMENTS: THE QUINTESSENTIAL SECOND GENERATION FINTECH** It’s these considerations which have really helped to shape Brite Payments into a quintessential second generation fintech. As a company, we’ve leveraged the [points mentioned in this article to create a service](https://www.financedigest.com/service-the-cfo-why-context-is-worth-80-iq-points.html "Service & The CFO: Why Context Is Worth 80 IQ Points"), and a business model, which simply wouldn’t have been possible during the first wave of the fintech movement. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---