Last updated on May 28th, 2024 at 11:12 am
Not long ago, every hotshot entrepreneur was trying to launch the next big fintech startup. Slick apps promising to be the Uber of finance dazzled investors and consumers alike. But the hype has faded over the last couple of years. Investment is down and money seems tighter across the board.
While the pullback has some folks worrying that fintech’s best days are behind it, Zak Westphal sees things differently. As the visionary founder of StocksToTrade, one of fintech’s rising stars, he knows a thing or two about building for the long haul. Even after over a decade in the markets, he’s still wildly optimistic about what fintech can deliver.
We caught up with Zak to get his take on navigating fintech’s recent turbulence. He offered some valuable perspective on the industry from an entrepreneur’s point of view—insights that both fintech builders and investors would be wise to hear.
Q1: From your vantage point leading a fintech company, why do you think we’ve seen this comedown in fintech investment? Did the hype simply get ahead of reality?
There’s no doubt we saw things get a little overheated there for a while – valuations jumped crazy fast and every idea got funded without much diligence. Now we’re experiencing the natural snapback and market correction of that frenzy wearing off. But beneath the hype cycles and bursting bubbles, I believe the core fintech mission remains stronger than ever: harnessing technology to make financial services faster, fairer, more secure and accessible to all. The recent chill just gives us all a chance to refine that vision and focus it on the consumers who need it most.
Q2: What key opportunities or strengths make you still so optimistic about fintech’s potential long-term?
For me, it comes back to the vast untapped potential still out there to transform outdated financial systems and empower everyday people that are currently underserved. Consumers continue rapidly adopting digital financial tools and demanding self-service access. Huge market gaps still exist, especially in emerging economies, for fintech solutions to democratize financial access by removing barriers. And some of the most innovative founders and builders I meet are focused on fintech specifically because they see massive possibilities to positively impact people’s financial lives. That explosive cocktail of trends and mission-driven talent gives me a lot of confidence.
Q3: As a fintech leader riding this wave, what have been your biggest lessons over the past year in adapting to the changing landscape?
This period has driven home the importance of building adaptability and resilience into your startup DNA from the start. At StocksToTrade, we’ve had to creatively trim budgets in non-essential areas while doubling down on high-impact features and experiences that supercharge our core user value proposition. It’s taught me the strategic importance of staying ruthlessly focused on the critical 20% that drives 80% of user-perceived value. This climate has also shown you can’t get distracted chasing hype cycles or short-term market opinions – you gotta keep your vision and priorities fixed on the long-term goal.
Q4: For fintech entrepreneurs trying to get traction, what advice do you have on strategically standing out right now?
I’d focus intensely on knowing your perfect user profile and tangible pain points inside-out first. Get into their shoes. Then construct your solution to feel like a natural, seamless fit improving their financial lives. Make it easy and intuitive for them specifically. Also be surgical and specific in demonstrating how you tangibly enhance outcomes compared to status quo options users have now. Promises are cheap – back it up with proof. If you solve high-priority problems better for a tightly defined audience, you have the ingredients to resonate and thrive sustainably.
Q5: On the flip side, for investors, what signals or qualities would you highlight that might identify resilient fintech companies poised to build over the long term?
I would look really closely at leadership makeup and underlying motivations – are they authentically passionate problem-solvers focused on user needs or just chasing a quick buck? Also, assess usage metrics demonstrating sustainable loyalty and engagement from a sticky user base over time rather than vanity metrics. And evaluate how they think about responsible, long-term priorities around things like security, transparency, ethics and social impact. Companies taking a conscientious approach while solving frictions by putting user needs first are being built to last. Those are the resilient fintechs poised to build over the long haul.
Q6: Finally, zooming out 5-10 years, what most excites you about fintech’s future? Where do you see the most potential?
What gets me most jazzed is the potential for fintech innovation to drive greater financial inclusion and access for underserved groups globally. Whether it’s blockchain, AI or mobile platforms, so many technology levers now exist to reduce barriers and seamlessly empower the unbanked. Microservices can increasingly personalize solutions to specific cultural needs and contexts locally. Cloud computing enables reaching unprecedented scale. We’re just scratching the surface of what’s possible – I think in a decade fintech will look radically more inclusive as it equips billions more people with tools to improve their financial lives.
