The financial sector has become very open over the last couple of decades, mostly thanks to the rise of the internet and its tight integration into many aspects of people’s lives. It’s easier than ever to get started operating in this area, especially if your current business already touches on some parts of the financial sector in more depth. However, there are a few caveats to keep in mind, especially if you are still new to this field.
Be Careful with Cryptocurrencies
Cryptocurrencies are still a hot topic, despite many people predicting their doom years ago. It’s not just about Bitcoin anymore, either – many new names have popped up on the radar, from serious ones like Ethereum and Litecoin to some more light-hearted ones in nature like Dogecoin. But as alluring as this market may seem, it can be a very volatile one and it requires a lot of expertise to handle it right. Unless you already have some experience with the crypto market under your belt, it’s best to stick to traditional financial channels, at least in the beginning.
Proper KYC Practices Are a Must
It’s becoming more and more important for businesses operating in this field to apply proper KYC (Know Your Customer) practices. The regulations around this part of the finance sector keep tightening on an annual basis. The recent introduction of OECD CRS to copy the style of USA’s FATCA is just the beginning.
Every institution and private business providing financial services must integrate a good identity verification service to deal with fraud and identity theft. Cognito is one of the more established examples on the market, with a proven track record and a long list of satisfied customers. It’s a good place to start if you’re not experienced in this area yet – you can find more details on this identity verification service here.
A Physical Presence Can Benefit You
One of the main benefits of the internet is that it allows companies to operate entirely virtually, requiring no physical presence at all. But when it comes to a business in the financial sector, it can definitely be worthwhile to look into getting your own physical office. This will benefit you in multiple ways. It will give your business extra credibility in the eyes of potential customers, as well as other companies you might be interested in working with. It will also allow you to streamline parts of your KYC process by letting customers come in personally for their verification. This is not going to be critical at the beginning of your company’s operation, but you will definitely need to consider it sooner or later.
Keep an eye on the tech market as well – especially the fintech sector. Many new developments keep coming out that can potentially benefit you. Nobody is going to approach you and tell you about them in most cases though. It’s up to you to stay informed and keep your company in touch with current trends. The rest comes down to gathering enough experience about the tech you’re using already.