Some thoughts about common growth and expansion vectors for Fintech startups.
The first direction is horizontal expansion to offer more financial products (e.g. insurances, mortgages, loans, etc). This is the most common approach. Investment service providers expand to offer different savings and investment products. A good example is Wealthfront - known for it’s investment platform, which also now offers bridge loans.
The second vector is verticalization, i.e. to own more of the customer experience upto the point of creating financial products. This applies to fintech’s that are mostly discovery / referral businesses. Verticalization means owning the application process and providing the financial product itself (i.e. a loan or insurance).
Both of the above approaches lead to a fintech turning into a neo-bank (a digital native financial service provider).
The third vector is geographic expansion. This approach requires an investment in regulatory compliance but is a relatively smaller investment than a bank establishing branches overseas. This is less common but there are some good examples of this - Wealthsimple in Canada operates in the US and UK.
All three examples have a common thread - take a digital first, customer driven approach to financial services and compete on simplicity to get the financial products.