Financial Technology (FinTech) Localization: Powering the New Wave of Financial Services Expansion Worldwide

Investments in global financial technology breached the $41 billion mark during just the first half of 2018 – a substantial increase from the $39.4 billion in investments for all of 2017. This upward trend highlights the importance of FinTech companies concentrating their efforts on localizing their products and services. Successful localization in the FinTech industry can have a tremendous impact for countless stakeholders; the key is to ensure that information can be precisely translated and provided as quickly as customers need it.

The Importance of Localization in FinTech

The technology advancements taking place that are serving as positive disrupters to the financial services and banking industry verticals are crossing global borders. FinTech is an industry that is not bound by borders, giving it the ability to provide customers with access to the tools they need in any part of the world. By limiting themselves to one language or region, businesses are hindering their potential client base. Localization helps companies reach new customers and ensure that those customers have a seamless user experience.

1) Accurate Information is Critical

In the world of FinTech, clients need to have up-to-date account information readily accessible in their preferred language. Furthermore, customers should be certain that the information, including industry concepts, is precise. Additionally, localization builds trust – a necessity in the FinTech industry. Customer confidence is particularly important in all aspects of FinTech, including asset management, investment or commercial banking, and insurance. Trust will quickly wane if language barriers and cultural differences become apparent to clients.

2) The Financial Industry is a Regulation-Intensive Market

Compliance with local laws and rules is critical for finance companies looking to enter new markets. There are a multitude of regulations related to tax, employment, and labor. Although some areas, including Switzerland and London, are making regulations more manageable for FinTech companies, many regions are maintaining tight provisions for entering the market. This is where quality localization becomes paramount, in creating locally relevant products and services that comply with the region’s norms and regulations.

3) Localization Enhances the “Customer Experience”

Customers want to know they are in good hands, especially when it comes to financial matters. FinTech businesses can enhance their clients’ experience by paying attention to details, including accurate translation, a design that accommodates a region’s language, cultural sensitivity, and strong customer service. Working with FinTech experts who understand not only the subject-matter, but the local language and culture is vital when striving to optimize customer experience.

Common Challenges with FinTech Localization

Financial Technology companies wanting to expand into new markets should consider these challenges:

• Moving forward, it appears that FinTech companies will be faced with additional regulations from governmental agencies, including rules that address data security, consumer protection, and anti-money laundering. Complying with these regulations, while still being able to create marketable products is a perennial challenge for FinTech companies.
• Cultural and language barriers can be difficult to overcome. As with any industry, they present a unique set of challenges as businesses expand across the globe. This is especially the case with FinTech companies that are attempting to present their services or products to a new audience.
• Varying foreign exchange rates can be tricky. Along with the potential difficulties of managing different payment methods and currencies, FinTech localization requires the ability to keep up with foreign exchange rates and to constantly update them.
• Privacy and security issues are paramount. FinTech solutions are becoming more innovative, requiring more sophisticated measures to protect privacy and increase security. One security breach is enough to cause customers to rethink their FinTech choices.
• Finding and working with the right subject-matter experts in local and global financial markets can be challenging. The translation service provider should not only have a track record of working with diverse financial companies, but also have familiarity with different regional markets.

Besides these, FinTech companies will always be confronted by challenges borne of new technologies and innovations within the fast-evolving space. One of these is the advent of blockchain technology, a database that maintains a constantly growing list of transactions or data records. As the technology that powers the usage of bitcoin and other cryptocurrencies, blockchain is becoming an important investment destination for customers worldwide. FinTech companies looking to offer blockchain-driven offerings will need to find reliable avenues to internationalize their products.

Although significant, with the right localization partner these challenges can be easily navigated. There certainly exists a tremendous opportunity for FinTech companies, in that the global payments industry is expected to reach $2.2 trillion by 2020. By providing useful, localized solutions, businesses can collect a sizeable piece of the pie.

A Snapshot of Successful Endeavors into New Markets

New companies are continuously joining the FinTech industry, with many becoming successful by entering into new territories. One such company is Payoneer, which connects businesses and professionals with a cross-border payments platform. Part of the company’s localization strategy is to open offices across the globe and hire only local managers for each office to ensure it meets the needs of the customers in that region. Chief Operating Officer Keren Levy has stated that sticking close to their customers has been part of the company’s success.

Another FinTech company that has successfully localized is Avoka, which built a software platform to accelerate customer acquisition. The company was founded in Sydney, Australia, but it expanded its operations to Denver, Colorado, and London. Avoka’s focus on the customer-centric part of digital banking has helped the business achieve its success. Additionally, it adheres to its “design once, deploy anywhere” platform, allowing its product to be available to clients worldwide. Avoka has digitized over 100 million transactions spanning more than 16,000 sales and service projects.

Some FinTech businesses might localize because of the nature of the product or service being offered. SumUp, a London-based company, developed technology that allows merchants to accept card payments from numerous regions. The company has expanded into 31 countries – a natural growth for a business that has a goal of making it easy for people and businesses everywhere to get paid.

Here’s a humdinger – about 40 percent of Americans simply did not enter a bank in the second half of 2017. Add to that the fact that, mobile payments and banking are anticipated to reach $92 billion by 2019, and you realize that technology will drive the consumption of financial products and services moving forward. The decision to localize its solutions is likely be one of the best decisions a FinTech company can make at this point. All you need is an experienced localization partner with the expertise to translate technical financial communication for niche and major global geographies.