industry spotlight

Banking

Join a dynamic banking industry that manages financial assets, facilitates commerce, and shapes the global economy.

Shaping a smarter financial landscape

Banking thrives on a dynamic market. Interest rates, economic health, and FinTech reshape the industry, but investor interest remains high for innovative banks with diverse income streams. The focus on neobanks, digitalization, and impact investing projects steady growth for the sector. The sector is expected to grow steadily, with a 4.69% CAGR for commercial banking, reaching $13.19 trillion by 2028 and a 5%+ CAGR for retail banking by 2032.

Why it matters:

Fueled by investor interest and a strong market, numerous untapped opportunities are emerging for startups to capitalize on:

  • Open Banking: unlocks innovation by letting authorized developers access customer data to build new financial tools
  • Cloud Computing: for cheaper and easier development and deployment of new financial applications
  • Artificial Intelligence: using AI for fraud detection, personalized financial advice, and automated loan approvals

Between the lines:

Great potential comes with significant challenges, so prepare to navigate regulatory hurdles, compete with tech-savvy startups, and rebuild customer trust in a rapidly evolving financial landscape.

At Waveup, we’re experts in the banking funding race, turning startup projects into profitable ventures

$3B+
Attracted in funding
600+
Companies propelled
80+
Sectors examined

What we do:

Our expert team helps raise vital funding, crafts compelling banking industry pitch decks, builds robust business blueprints, and identifies prime M&A options.

Go deeper:

Investigate our banking market research for current trends, insights, challenges, and tips to attract investors.

1.5x growth
The banking is expected to grow by one and a half in 2032.

 

49%
Banking and financial market companies are using AI for data analysis.

Driven by rising interest rates and user demand for digital tools, open banking growth, and competition from fintech startups
7/10

Banking customers want mobile apps with budgeting and personalized financial advice.

$330B

Open banking payments will surge by 2027, boosting bank revenue via BaaS.

$13.8T

Embedded finance will explode by 2026, creating startup opportunities for non-financial platform solutions.

VENTURE LANDSCAPE

In 2023, startups in the banking industry raised $2 billion in funds

Key verticals where funds flow:

  • Blockchain & Cryptocurrency
  • Open Banking & APIs
  • P2P lending
  • Digital Banking

Leading banking venture capital firms

Write to us to know more

Banking Industry Obstacles

Proactive preparation is key! Here’s a look at some common hurdles in fundraising and how to overcome them.

Regulatory compliance:

The banking industry is heavily regulated, and these regulations can be complex and expensive to comply with.

Why it matters:

Ignoring rules or missing certifications suggests being associated with:

  • Legal and Financial Trouble: regulatory bodies can impose severe penalties for non-compliance, including fines, lawsuits, and even closure
  • Limited Functionality: without access to payment networks, a startup would be severely restricted, making it unattractive to customers

What it takes:

  • Seek Expert Guidance: consult financial regulatory compliance experts to develop a compliance program
  • Leverage Technology: explore solutions to help with tasks like Know Your Customer (KYC) checks, transaction monitoring, and regulatory reporting
  • Regularly Monitor and Audit: stay updated on new regulations and amendments that might impact your business

Cybersecurity Threats:

Banks are prime targets for cybercriminals due to the vast amount of sensitive financial data they hold. Techniques like phishing scams, malware attacks, and data breaches can have devastating consequences.

Why it matters:

No robust cybersecurity means:

  • Financial losses: a cyberattack can be financially devastating, draining resources needed to grow and compete
  • Damaged customer trust: a security breach can shatter trust, challenging acquiring and retaining new customers
  • Regulatory fines: can impose a significant financial burden, further straining their resources and potentially delaying growth plans
  • Investor hesitance: concerns about hacks, scams, and stolen funds deter investors, hindering capital inflows and stifling innovation

What it takes:

  • Enhanced security practices: implement robust security protocols and invest in cutting-edge cybersecurity solutions, including advanced encryption and firewalls
  • Transparency & education: collaborate with cybersecurity experts and regulators for employee training in cyber hygiene
  • Focus on user protection: implement multi-factor authentication and regularly monitor systems for suspicious activities

Customer Acquisition:

It can be challenging for a startup to establish itself and convince people to change their banking habits.

Why it matters:

Hindered customer acquisition means:

  • Limited Growth: challenges to attract investors, develop new products, and compete effectively
  • Increased Marketing Costs: can quickly eat into limited resources and squeeze the profit margins
  • Cash Flow Issues: makes challenging to meet payroll, pay bills, and invest in growth initiatives

What it takes:

  • Exceptional Customer Service: provide outstanding customer support through multiple channels (phone, chat, email) to build positive relationships and encourage loyalty
  • Partnerships: collaborate with FinTech companies or other non-bank financial institutions to reach a wider audience and offer a broader range of financial products

Limited funding:

The banking industry’s growth is creating a boom for investors seeking efficient and disruptive financial solutions. However, this very growth presents a challenge for young startups. While the market is ripe for innovation, limited funding is a significant hurdle, hindering their ability to compete with established banks with vast financial resources.

Why it matters:

Capital restraints lead to:

  • Slower growth
  • Limited technology adoption
  • Difficulty attracting talent
  • Reduced scaling

What it takes:

  • Embrace open banking APIs to access innovative products and services without building everything from scratch
  • Partner and collaborate with established financial institutions or technology companies to access resources, expertise, and distribution channels, reducing the need for independent investment in these areas
  • Craft a solid business model to outline how your business will create value, capture a market share, and ultimately turn a profit
  • Prepare an investor-appealing deck to convince VCs to back your vision

FAQs

How attractive is the banking industry to investors?

It depends on the specific bank and economic climate. Nevertheless, banks often pay dividends and benefit from economic growth. Regulations, competition from fintech, and economic downturns can pose challenges.

If you are a banking startup, how easy is it to raise funding today?

It might be tricky. Investors tend to be cautious with startups, especially in finance. But don’t fret! There are still options. Venture capitalists might be interested if your bank has a unique edge, like focusing on a specific customer group or using innovative tech.

How long does it take to create a pitch deck and financial model?

Our team normally takes 2-3 weeks to complete all necessary documents. But in some cases, it could take up to a month. Contact us for further details.

What are the key mistakes banking startups make in their pitch decks?

Many banking pitch decks lack coherent investment narratives and appealing intros. Showing only graphs, numbers, and charts to investors is not the best option, as the new ventures must attract attention rather than bore them. Also, some pitch decks don’t answer two essential questions: ‘Why now?’ and ‘What’s your vision/mission?’

How competitive is the banking industry market?

The banking industry is a highly competitive market. There are established players, new Fintech startups, and even non-traditional competitors like retail stores offering financial services.

What services do you provide for investors looking to invest or already investing in banking?

We help investment funds investigate prospective banking projects through comprehensive due diligence, ensuring they back profitable initiatives. Additionally, we roll out full-fledged fundraising support for our partner fund’s associated companies.

Do you provide M&A support?

Of course! We help link you with the right venture capitalists in the banking space. By assessing your project’s team setup, round size, and product, we’ll guide you in partnering with investors throughout the deal and beyond.

Do you make intros to VCs?

Absolutely! If your startup project aligns with certain criteria like round size, team expertise, and product quality, we can assist you in connecting with banking VCs. This service is integrated into our extensive investor relations package, which encompasses creating a pipeline of investors keen on banking, preparing startups for introductory meetings with them, and facilitating communication post-deal.

Do you have available data or research to purchase on the banking market?

Yes, we do! Our comprehensive banking market research includes industry reports, competition analysis, etc. We use only reliable data sources to collect the most relevant information for you, such as the industry’s challenges, market trends, and competitive dynamics.

Which growth stage of companies have you worked with in the past?

Our core proficiency lies in helping startups from the Seed to Series B growth stages within the banking industry and beyond. However, we also support businesses in Pre-Seed and Series C+ growth stages and forge ties with established companies and investment funds.

How is AI disrupting the banking industry?

AI reshapes banks’ work, improving customer service, spotting fraud, and making stock trading smarter and safer. However, traditional banking needs to update its systems to take advantage of AI​.

What is the common use of AI in the banking industry?

AI helps banks spot fraud by checking if transactions look suspicious. It also powers chatbots that assist customers at any time and personalize advice. Plus, it speeds up tasks like entering data, making things faster and more accurate.

What are the current trends in the banking industry?

Banks are embracing a tech-driven future with generative AI automating tasks, cloud storage streamlining operations, and open banking, all while prioritizing a secure and user-friendly digital experience for customers.

How has technology changed the banking industry?

Technology has revolutionized the banking industry. Thanks to online and mobile banking, customers can now manage their finances from anywhere, anytime, with just a tap or click. This shift towards digital convenience is just one aspect of the future of banking – leveraging AI, cloud computing, and open banking to streamline services, personalize products, and enhance security.

Diverse industries we work with

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