How a Corporate Service Provider Can Help Fintech Companies Overcome Their Biggest Challenges
Fintech companies can use all the financial data and help they can get to comply with regulations, streamline operations, and focus on their business growth.
- The fintech industry is reshaping the financial sector globally and it’s crucial for fintechs to access specialized financial services.
- Transaction management and support services, regulatory compliance and scalability are some of the main challenges.
- Through comprehensive and tailored support services, Trustmoore can help fintechs overcome these challenges and focus on growing their business.
Fintech companies are revolutionizing the financial industry
The financial technology (fintech) industry is revolutionizing the financial sector, breaking traditional boundaries and ushering in a paradigm shift with far-reaching implications. As this transformative wave gains momentum, policymakers face the challenge of fostering innovation and competition while effectively managing associated risks. Fintech's emerging technologies and remarkable growth and profitability position it as one of the most promising industries in the contemporary world. This fintech revolution is no longer confined to major economies like the United States or Europe it is gradually captivating employees and consumers across the globe.
Tailored Fintech Financial Services are Crucial in the Growing Financial Technology industry
In this dynamic landscape, accessing specialized financial services tailored to the unique needs of fintechs becomes increasingly crucial. This article delves into the realm of financial services available to fintechs, offering comprehensive insights into the key offerings, strategic advantages, and collaborative opportunities that empower and accelerate their growth. By understanding the diverse range of support services at their disposal, fintech enterprises can maximize their potential and thrive in an era defined by innovation, competition, and evolving customer expectations.
Streamlining Complex Financial Transactions for Fintech with Specialized Corporate Financial Services
Fintech firms and fintech startups often rely on complex financial transactions at the core of their business models. Managing these transactions can be intricate and demanding, especially for smaller companies without the necessary expertise.
How a service provider can help with complex transactions
This is where a corporate service provider proves invaluable. We offer transaction management, coordination, and support from traditional financial services providers, which are particularly beneficial for financial technology companies engaged in complex transactions like mergers and acquisitions or fundraising rounds.
Specialized services for securitizations and asset-backed financing
Additionally, for fintechs involved in securitizations or asset-backed financing, we can assist in appointing security trustees, collateral agents, or escrow agents to streamline the process. Leveraging the expertise of a corporate service provider enables fintechs to streamline their transaction processes and reduce the risk of errors or delays.
Financial and Operational Support Services Tailored for Fintechs
Operational focus poses another challenge for fintechs as they strive to balance day-to-day operational work with their primary business goals. Our consolidated financial services for statements support fintechs in complying with regulatory requirements. Additionally, our asset valuation services enable fintechs to accurately assess the value of their assets. Lastly, our cash management and payment services help fintechs efficiently manage cash flows and process payments.
Waterfall calculations for fintech startups
These cash management and payment services can also include the preparation of periodical waterfall calculations, performing various trigger event or borrowing base tests, sending out utilization requests and transferring funds between collection and pay-out accounts. Our team has experience in preparing waterfall calculations for fintechs in line with priority of payment schedules for different types of asset portfolios, such as consumer loans, SME loans, RMBS etc.
Experience with established financial institutions and fintech banks
Trigger event or borrowing base tests can be performed based on specific fintech tailored deal mechanics depending on the characteristics of the respective deal and the wishes of both originators as well as financiers. Our finance and legal teams are very experienced and work closely together on a daily basis to ensure utilization requests are sent out to the different financiers within the designated deadlines. We are accustomed to working with both traditional banking and fintech banks and the various online banking portals that they have in place.
Navigating the Regulatory Landscape with Fintech Compliance Services
Another significant challenge faced by companies in the fintech industry is regulatory compliance. Fintechs in the US and Europe must adhere to various financial regulations, data protection laws, and consumer protection laws. A corporate service provider such as Trustmoore can assist fintechs in overcoming these regulatory challenges in multiple ways.
Services that align with compliance in the financial world
For instance, we provide corporate secretarial services to ensure accurate maintenance of corporate records and timely filing of annual reports. Our client monitoring services help fintechs comply with anti-money laundering and anti-terrorism financing regulations. Additionally, we offer services such as transaction accounting and statutory accounts, audit coordination and support, tax computing and filing, regulatory reporting, and Know Your Client (KYC) and compliance coordination to ensure fintechs stay compliant with regulatory requirements.
Scalability for Fintech Startups with Specialized SPV Incorporation and Compliance Services
Last but not least, we cannot forget about scalability of fintech innovations. As these companies grow, they must scale their operations and infrastructure to meet increasing demands. This can be particularly challenging for startups lacking resources and experience in managing rapid growth. Our SPV incorporation services help fintechs in establishing compliant and efficient financial structures. We also offer local tax registration services, process agent and data agent services, facilitating fintechs in navigating the complex tax landscape and managing data protection requirements.
The Boutique Company in the Financial Services Industry
At our Structured Finance and Capital Markets division, we comprehend the challenges faced by fintechs in the US and Europe. Through our boutique approach, comprehensive and tailored support services, we help fintechs overcome these challenges and focus on growing their business.
Interview with Huub Mourits - Head of Structured Finance & Capital Markets services at Trustmoore
[Financial Journalist]: Good morning, Mr. Mourits. Thank you for meeting with me today. I have delved into the challenges faced by legacy financial institutions and technology companies in the financial industry today. I’m eager to understand how the financial services of Trustmoore’s Structured Finance & Capital Marketing team can support any fintech with these challenges.
Complex Financial Products and Transactions
Let’s start with financial transactions. They lie at the heart of many fintech companies' business models. However, managing complex transactions can be daunting, especially for smaller and fast growing fintech firms lacking the necessary expertise. To illustrate this point, let’s imagine a financial technology company, aiming to secure funding through a (private) securitization process. They need to appoint a scale of third party provides, to manage the intricate transaction. How can Trustmoore's transaction management and support services assist fintech companies in navigating and streamlining these complex transactions effectively?
How Trustmoore can Help Financial Technology Companies
[Huub Mourits]: Your example perfectly highlights a common challenge faced by fintechs. Trustmoore's Structured Finance and Capital Markets division excels in establising the SPV, coordination, and support services.
Support services for fintechs ranging from mobile banking to investment apps
In the hypothetical scenario you mentioned, we would help the fintech appoint the trusted parties needed and make sure that they possess the necessary and relevant expertise to manage the securitization process effectively. Its not uncommon that for a (private) securitization to fund businesses, like SME Lending platform, Buy-Now-Pay-Later, Factoring, tnh as the Corporate Service Providers (incl directors), cash manager, security trustees, back-up servicer.
A Range of Bespoke Services Based on Understanding The Market
Our comprehensive support and guidance minimizes the risk of errors or delays, ensuring smooth and efficient transactions. By leveraging our bespoke specialty finance expertise in the financial services sector, fintechs and financial institutions can easily and confidently navigate complex processes such as securitizations or asset-backed securities with confidence. Now and then, we make various introductions and connect the relevant transaction parties to make sure we have the right team together working on the Fintech’s securisation transaction.
How Do You Look at The Challenge of Scaling Fintech Growth?
[Financial Journalist]: Finally, how do you look at scaling operations? It can be another challenge for fintechs as they strive to keep up with increasing demand and expansion opportunities.
Seamless Scaling With Compliance and Tax Services
[Huub Mourits]: That is right. In a scenario where a successful fintech company has gained significant traction and might have a couple successful A and B (capital) rounds, they now need fintech funding for the rapid growth of the day-to-day flow of business itself. For investors to come in with tailored financing facilities they need to establish financial structures such as a (orhpan) SPV that can accommodate this expansion and adhere to local tax regulations.
Fintech Services To Create Bespoke Financial Structures
Trustmoore's Structured Finance and Capital Markets team would support the fintech company by offering SPV incorporation services. This allows the company to create bespoke financial structures that can efficiently accommodate their growth plans. We would also provide guidance on local tax registration, ensuring the fintech company meets all tax obligations as they expand into new markets. By leveraging our expertise and extensive knowledge of local tax landscapes, fintech companies can scale their operations seamlessly while remaining compliant with tax regulations
Combining Operational Efficiency with Day-To-Day Operations
[Financial Journalist]: Another challenge for fintechs is operational efficiency, it is essential for fintech companies as they balance day-to-day operations with their primary business objectives.
Improve and Optimize Operational Efficiency
[Huub Mourits]: Correct. Let's consider a fintech that operates a peer-to-peer lending (SPV) platform. There is no doubt this platform is a fintech innovation and filling specific niche gaps in the fintech businesses. However, they also need an efficient investor and regulatory reporting process with accompanying timely payments, manage cash flows, borrowing base criteria and comply with regulatory requirements. This is something many fintech companies absolutely do not like to do by themselves – as it is way to far away form their core-business. Trustmoore's cash management, payment services, and (ESMA) reporting offerings contribute to improving and optimizing the operational efficiency of fintech companies. We assist them from day one in setting up the right and required data flows.
Focus on The Core Business
In the case of the peer-to-peer lending platform, our cash management, payment services streamline payment processing, ensuring efficient processes. Furthermore, management account and reporting services and financial statement preparation services help fintech companies meet their regulatory reporting obligations accurately and with financial information in a timely manner. By leveraging our expertise in these areas, fintech companies can optimize their operational efficiency, enabling them to focus on their core business goals.
Reach out to us today
© 2020 TRUSTMOORE All rights reserved.
ISAE3402 CERTIFIED