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Creating a business model for a FinTech startup that allows banks to predict client behavior and personalize financial solutions

Elaborating a business model for AlphaInsights – a FinTech startup that offers predictive transaction analysis to banks. With this, banks can leverage the client data they have to predict client behavior and recommend personalized financial solutions. By applying the lean startup process to develop a value proposition and a profitable business from a core technology.

The startup idea: Offering predictive transaction analysis to banks allowing them to predict client behavior and personalize financial solutions

The idea of AlphaInsights was pitched by Christian and Mark on the Startup Weekend FinTechCity Frankfurt 2015. Christian has studied artificial intelligence. Together they want to enter the market of “Big Data” and help companies to use their client data. Based on expertise in machine learning (basically learning algorithms) they want to offer predictive transaction analysis to banks. With this, banks can get to know their online banking clients better by analyzing and predicting spending behaviors, and leverage the client data they have by making clients personalized recommendations for financial solutions they need when they need them.

The teamwork: Evaluating different applications of their core technology to create a value proposition and a profitable business around it

Christian and Mark were joined by Sebastian, Gunnar, Moritz, Georg, and me. With backgrounds in banking, IT and consulting, we evaluated a variety of business models, from a personal finance management for banking clients (B2C) over offering the core technology to banks (B2B) to licensing the predictive transaction analysis engine to banks and help them to leverage the insights for product recommendations (B2B2C). We settled for the latter. With input from Frankfurt banking experts we were able to validate this as a compelling value proposition, and developed a business model for it.

Nicole’s contribution: How to evaluate several value propositions and customer segments, before settling on one and developing the business model

Christian and Mark were already familiar with working out a basic business model and preparing to pitch. So, I facilitated the lean startup process of evaluating several business models to apply the core technology before settling on one compelling value proposition, and creating the business model.

With several banking experts in the team, I also took the role of the bank customer, pointing out how their core technology might create value from the customer point of view.

As the young founders were hesitant to assume a leadership role with experienced professionals on the team, I encouraged them to fill the role they have and lead the team.

The result: A validated business model for the FinTech startup to successfully offer their core technology to banks

Christian and Mark now have a compelling and validated business model to present to banks to win them as their first clients. They have a development roadmap that distinguishes the core technology from possible applications. Depending on the use case different client segments and revenue streams are possible; so there is also potential to pivot successfully.

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