Tips For Fintech Companies To Avoid Business Interruption
Running a business is fraught with risks and challenges. Operational interruption is perhaps one of the biggest challenges you may encounter because it gets your company off its feet. At the worst, there is a fear that it will never bounce back again. A business interruption may come when you least expect it, with a natural disaster, cyberattack, accident, or the loss of an important supplier, which makes it even harder to deal with. The pandemic, for instance, has brought harsh lessons that no organization can be complacent about operations, and it always makes sense to be prepared for the worst.
Fintech is one of the verticals where this challenge gets a tad bigger, probably because it is highly complex and competitive. An interruption can translate into a loss of years of hard work and valuable customer trust. Moreover, getting up after a disruption can be tough as you may have to start from scratch, realigning operations, and winning the trust of the customers yet again. It is vital to have a plan for avoiding such interruptions and handling the situation if something still goes wrong. Here are some useful tips that can help fintech companies to stay on their feet.
Take quick action
When disaster strikes and things seem out of control, quick action can save your fintech company from falling apart. It is vital to funnel emergency working capital to continue operating. Tackling the situation without incurring more losses should be the top priority. It is possible with a close evaluation of your cash flow, reserves, and credit availability so that you can understand your short-term needs and implement long-term changes to keep the business afloat. Seek advice from a seasoned fintech consultant to build a recovery strategy for a comeback.
Create a crisis-management plan
The next step that a fintech business owner needs to take is creating a crisis-management plan. Assess the current situation carefully and identify the key operational risk areas for your business. The objective is to keep the business up and running and safe from further risks when things are already in bad shape. Protecting your technology infrastructure is another vital aspect of crisis management because fintech companies run on technology. It is equally important to retain the trust of customers through the crisis.
Invest in a cybersecurity and disaster recovery initiative
For fintech companies, cyberattacks can be the worst fear amid an ongoing interruption. A rework on your cybersecurity and disaster recovery initiative becomes imperative for proper crisis management. If your enterprise runs on Mac, setting up apple time machine backup can keep your data secure. Apart from safeguarding your business data from loss, you also need to protect it from hacking attacks. Not having proper practices in place puts your business at the risk of losing customer trust and its reputation.
Have a day-to-day financial plan
When you focus on bigger things like crisis management and disaster recovery, it is often easy to forget day-to-day financial planning. The complacent approach can get your business into a fix during the interruption, no matter how insignificant it appears. Start by pausing unsuccessful ventures, new product development, and minor acquisitions. Instead, pay attention to consolidating the working capital for your business. A day-to-day financial plan goes a long way in helping your company to adapt to the fluctuations in working capital throughout the distress period.
Focus on retaining your team
During a crisis as big as a business interruption, organizations may have to face the hard decision of cutting down on their teams eventually. While it can be painful now, sending away your resources can cause long-term gaps and additional search costs when things are back to normal. It is better to explore other alternatives of cost-cutting so that you can retain your loyal team members through the difficult phase. Consider options such as putting resources on part-time engagements and switching from permanent to variable contracts. With this approach, you will be able to retain your key people and establish long-term loyalty as well.
Re-evaluate your business model
Another critical aspect of saving your fintech company from interruption is a revaluation of your current business model. At this stage, you can drive revival by tweaking your products and services to provide more value to your customers. Fintechs depend mainly on offering internet services, which means that you have an easy opportunity to develop a new business model if the current one isn’t working. Look for ones that pivot towards addressing the current pain points of the customers, and you will be able to get your business back on its feet easily.
Prioritize short-term wins
Disruption can be disheartening for any business owner, but it is important to keep your hopes up. Prioritizing short-term wins is the best way to stay motivated through the crisis. It may not be the best time to chase long-term goals, rather developing a strategy to drive positive changes, for now, can be the key to a strong comeback. Ideally, you should focus on tactics that cut costs, save time, boost employee morale, and generate support for the business.
Come up with a turnaround plan
Getting your fintech business back on its feet requires a robust turnaround plan that matches your current challenges and needs. To create one, you will have to start by evaluating the reasons that caused the interruption in the first place. Your turnaround strategy should be capable of staving off similar issues. Further, it should highlight plans for the employees and management to deal with similar situations if they arise again. Also, it should provide a business continuity plan that ensures quick recovery for the company.
Despite the domain-specific challenges that fintech companies face, it is still possible to get your business out of a fix in case of an interruption. In this industry, everything boils down to getting your products and services back to your customers. At the same time, you need to go the extra mile to retain their trust. After all, credibility is the biggest asset for any business that deals in money.