Discuss About The Predicting Adoption Of Financial Services.
Fintech is one of the most promising and probable business sectors in the recent time. This is mainly due to the reason that boom in the financial market and high market penetration of the internet facilities. This is motivating more new entrepreneurial ventures to enter in this market and offers more innovative services (Mohan 2016). Money ply is one of the recent entrants in this sector with the objective of providing online services of payment options. They will have online apps, websites and dedicated kiosks to let the customers use their financial services from their convenience. Money Ply will venture with leading financial institutions in order to let the customers to access the financial services with major number of banks. In the initial stage, they will start their operation in the South East Asian market and in the further stage they will start their operation in the western regions (Mackenzie 2015).
The key value proposition will be offering online payment services to the customers along with offering the facility of transferring money from one bank account to another. Thus, Money Ply will enable the customers to avoid the physical presence in banks for their daily financial transactions (Terpstra and Verbeeten 2014). Money Ply will also be able to store the credit and debit card details and customers will be able to shop with their Money Ply apps. Security features will also be latest with the addition of the fingerprint scanner. Thus, customers will not have to carry their cards and other banking details with them (Robb et al. 2015). They can shop and do any other activities from the app just with their fingerprint.
This report will discuss about the opportunity viability and market feasibility of Money Ply. Industry competitiveness and financial feasibility will also be determined in this report.
Starting a new business enterprise is not an easy task. It requires the business owners to invest their time and opportunity into the venture in order to make sure that they achieve success in the business. According to me, I am capable to conduct the given opportunity because I have experience in the given field. This experience comes from the fact that I have taken part in various events during my university which have prepared me emotionally and mentally to indulge in such activities. I have taken part in various entrepreneurial processes and contests, which have required my full attention. Thus, I believe that I have the ability to contribute towards the welfare of my organization. Furthermore, I am physically very active and exercise regularly which makes me capable enough to give in long hours for the work that is required to build my enterprise. I have done my post graduate degree in business management which has provided me with enough knowledge with reference to how a person should manage his business enterprise.
Thus, I believe I have the adequate skills to manage my organization and will be able to cope with the emotional, physical and intellectual demands that are present in order to start my new venture.
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Political |
· Political environment in the South East Asian regions is favorable and positive. · However, there are various legal and regulatory issues regarding the online financial services. · Due to the emergence of different issues in the recent past, regulations are becoming more stringent for the online financial services. |
|
Economical |
· Economical environment is favorable due to less cost associated with the customers. · However, there are already branded players such as PayPal are operating in the market along with different regional players. · Cost of maintaining the online infrastructure is huge. Thus, it may get difficult for Money Ply to upgrade their services at par of the competition. |
|
Social |
· There are still social concerns regarding the safety and security of the online financial services. · Majority of the probable customers wants to opt for renowned services over the new ones (Yen and Wu 2016). · Credibility and concerns of breach of privacy are also the challenges for Money Ply. |
|
Technological |
· Rapid up gradation of the technology is important for Money Ply to survive in the market. · Technology should be secured enough to prevent any breach of privacy. Thus, it is important for Money Ply to invest more in securing their technologies. |
In terms of the demographic segmentation, Money Ply will target both male and female customers due to the fact that both of them are active in the financial market. In terms of the geographic segmentation, the countries in the South East Asian region will be targeted. In terms of the psychographic segmentation, customers who are updated and are open to new technologies and new lifestyles will be targeted with the innovative offerings.
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Threat of new entrants |
· Threat of new entrants is low due to the act that huge investment is required. · Complex legal regulations also prevent entry of new players in the market. |
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Threat of substitutes |
· Threat of substitute is high due to the presence of number of competitors. · All the competitors are having similar service offerings. |
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Bargaining power of customers |
· Bargaining power of customers is moderate. · They are having good number of options. · However, switching cost is high due to the presence of banking regulations. |
|
Bargaining power of suppliers |
· Bargaining power of suppliers is low. · Less dependency on the suppliers. |
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Competitive rivalry |
· Competition is high due to the presence of number of players. · Various offers and strategies are being initiated in order to stay ahead in the competition. |
|
Product |
· They will have diverse offerings including mobile apps, banking transactions and online shopping. · Will cater to diverse requirements of the customers. |
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Price |
· Using the service is free for the customers. · They will only pay for huge financial transaction. · Revenue will get generated from the commission from banks. |
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Place |
· Online presence will ensure availability of the services in every place. · Service will be able with all the major banks. |
|
Promotion |
· Social media marketing will be initiated in order to reach out to more number of customers. · Pay per click and online based marketing will also be initiated. |
The requirements for the business have been given as follows:
The business owner aims to raise the fiancé of the business in the following manner:
The various Star-up Costs are as follows:
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START-UP REQUIREMENTS |
|
|
Start-up Expenses |
|
|
Legal |
$50,000.00 |
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Labor |
$20,005.00 |
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Brochures |
$15,070.00 |
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Consultants |
$10,090.00 |
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Insurance |
|
|
Rent |
$600,089.00 |
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Research and Development |
$12,008.00 |
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Expensed Equipment |
$52,000.00 |
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Other |
|
|
TOTAL START-UP EXPENSES |
$759,262.00 |
|
Start-up Assets |
$20,000.00 |
|
Cash Required |
$10,000.00 |
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Other Current Assets |
|
|
Long-term Assets |
$33,215.00 |
|
TOTAL ASSETS |
$63,215.00 |
|
Total Requirements |
$822,477.00 |
|
Table 2 |
|
|
START-UP FUNDING |
|
|
Start-up Expenses to Fund |
$759,262.00 |
|
Start-up Assets to Fund |
$63,215.00 |
|
TOTAL FUNDING REQUIRED |
$822,477.00 |
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Assets |
|
|
Non-cash Assets from Start-up |
$20,000.00 |
|
Cash Requirements from Start-up |
$10,000.00 |
|
Additional Cash Raised |
$33,215.00 |
|
Cash Balance on Starting Date |
$10,000.00 |
|
TOTAL ASSETS |
$63,215.00 |
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Liabilities and Capital |
|
|
Liabilities |
|
|
Current Borrowing |
|
|
Long-term Liabilities |
400,000.00 |
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Accounts Payable (Outstanding Bills) |
|
|
Other Current Liabilities (interest-free) |
|
|
TOTAL LIABILITIES |
|
|
Capital |
|
|
Planned Investment |
|
|
Investor 1 |
$422,477.00 |
|
Investor 2 |
|
|
Other |
|
|
Additional Investment Requirement |
|
|
TOTAL PLANNED INVESTMENT |
$822,477.00 |
|
Loss at Start-up (Start-up Expenses) |
$759,262.00 |
|
TOTAL CAPITAL |
$63,215.00 |
|
TOTAL CAPITAL AND LIABILITIES |
$63,215.00 |
|
Total Funding |
$822,477.00 |
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Performa p and l |
|||
|
Year 1 |
Year 2 |
Year 3 |
|
|
Sales |
$ 20,50,600.00 |
$ 35,00,000.00 |
$ 90,00,000.00 |
|
Direct Costs of sales |
$ 2,56,450.00 |
$ 5,00,000.00 |
$ 6,00,000.00 |
|
Gross Margin |
$ 17,94,150.00 |
$ 30,00,000.00 |
$ 84,00,000.00 |
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Gross Margin percentage |
87.49390422 |
85.71428571 |
93.33333333 |
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Expenses |
|||
|
Payroll |
$ 1,20,000.00 |
$ 1,50,000.00 |
$ 1,60,000.00 |
|
Marketing |
$ 20,000.00 |
$ 15,000.00 |
$ 14,260.00 |
|
Rent |
$ 10,000.00 |
$ 10,000.00 |
$ 10,000.00 |
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Taxes |
|||
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Depreciation |
|||
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Others |
$ 12,534.00 |
$ 16,666.00 |
$ 1,75,280.00 |
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Total |
$ 1,62,534.00 |
$ 1,91,666.00 |
$ 3,59,540.00 |
|
EBIDTA |
$ 16,31,616.00 |
$ 28,08,334.00 |
$ 80,40,460.00 |
|
Net profit |
$ 16,31,616.00 |
$ 28,08,334.00 |
$ 80,40,460.00 |
|
% |
79.56773627 |
80.23811429 |
89.33844444 |
The given business enterprise, has a great plan with a look of the future. All the countries around the globe are becoming digitalized and therefore, they will be requiring such payment portals to ensure that they are able to digitalize successfully (Haddad and Hornuf 2016). Therefore, the business is scalable and if the company receives enough funs, it will be able to expand its operations to various countries around the globe. At present, the company plans to exercise its operations in the host country. If it is able to achieve success there, it plans to increase its operations and expand its operations in other parts of the globe. Hence, if the business plans to expand its operations, it needs to search out for new investors and technological support so that it becomes a global name in the FinTech industry.
Conclusion
Thus, it can be concluded that Money Ply is having positive potentiality and opportunity in the market due to their innovative offerings. This report discussed about the market, business and financial feasibility of Money Ply and it can be concluded that proper allocation of the resources will help them to create their market share in the highly competitive market. It is expected that the financial plan along with the What-If analysis done in this report will help Money Ply to have the ideal financial and operational forecast for their further business operation.
Reference
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage Learning.
https://onlinelibrary.wiley.com/doi/10.1111/2057-1615.12059/full
Casadesus?Masanell, R. and Zhu, F., 2013. Business model innovation and competitive imitation: The case of sponsor?based business models. Strategic management journal, 34(4), pp.464-482.
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Chiu, I.H., 2016. Fintech and Disruptive Business Models in Financial Products, Intermediation and Markets-Policy Implications for Financial Regulators. J. Tech. L. & Pol’y, 21, p.55.
https://www.sciencedirect.com/science/article/pii/S0747563216305829
Haddad, C. and Hornuf, L., 2016. The emergence of the global fintech market: Economic and technological determinants. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2830124
https://books.google.co.in/books?hl=en&lr=&id=dKk9wU3M-KoC&oi=fnd&pg=PR3&dq=financial+management&ots=yYGUD9EMZP&sig=FyL7Yl17KtDMXs3KbvrYWMTvkrk#v=onepage&q=financial%20management&f=false
Mackenzie, A., 2015. The fintech revolution. London Business School Review, 26(3), pp.50-53.
https://dash.harvard.edu/bitstream/handle/1/13212599/casadesus-masanell,zhu_business-model-innovation_R2.pdf?sequence=1
Mohan, D., 2016. How banks and FinTech startups are partnering for faster innovation. Journal of Digital Banking, 1(1), pp.13-21.
https://www.ingentaconnect.com/content/hsp/jdb001/2016/00000001/00000001/art00003
Robb, C.A., Babiarz, P., Woodyard, A. and Seay, M.C., 2015. Bounded rationality and use of alternative financial services. Journal of Consumer Affairs, 49(2), pp.407-435.
https://www.journaloftechlaw.org/uploads/7/5/6/8/75689741/21.2jtlpfinalchiu.pdf
Scott, W.R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.
https://journals.sagepub.com/doi/abs/10.1177/1476127013510466
Terpstra, M. and Verbeeten, F.H., 2014. Customer satisfaction: cost driver or value driver? Empirical evidence from the financial services industry. European Management Journal, 32(3), pp.499-508.
https://www.sciencedirect.com/science/article/pii/S0263237313000881
Yen, Y.S. and Wu, F.S., 2016. Predicting the adoption of mobile financial services: The impacts of perceived mobility and personal habit. Computers in Human Behavior, 65, pp.31-42.
https://s3.amazonaws.com/academia.edu.documents/7538884/badm4250hleamanw09.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1522848898&Signature=CEpO6AInyPNnMpGTvBDmq0vBpd8%3D&response-content-disposition=inline%3B%20filename%3DFinancial_accounting_theory.pdf
Zott, C. and Amit, R., 2013. The business model: A theoretically anchored robust construct for strategic analysis. Strategic Organization, 11(4), pp.403-411.
https://repository.upenn.edu/cgi/viewcontent.cgi?article=1103&context=mgmt_papers
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