Every fintech founder we’ve worked with at Speqto has heard the MVP gospel at least once: ship fast, test cheap, iterate later. It’s solid advice for a lot of software categories. But if you’re building in BFSI — lending, insurance, wealth, payments — we’ve seen this advice backfire more than once, and investors have gotten noticeably pickier about which version of “minimum” they’re willing to fund.
So let’s talk about the real difference between a Minimum Viable Product and a Minimum Lovable Product, and why we’re increasingly telling our fintech clients to lean toward the latter before they walk into a pitch room.
The MVP Trap in Regulated Products
An MVP is built to answer one question: does this solve a real problem? For a photo-sharing app, that’s fine — ship something clunky, get users, fix it. For a lending or insurance product, the stakes are different. Your “minimum” version still has to handle KYC, deal with sensitive financial data, and not break trust the first time a user tries to repay an EMI or file a claim.
We had a client, a digital lending startup targeting gig workers, who came to us after building a bare-bones MVP with a freelance team. It technically worked — users could apply for loans and get disbursed. But the onboarding flow was so rough that drop-off at KYC was over 60%. When they went to raise their seed round, one investor’s comment stuck with us: “Your product works, but would you trust it with your own salary account?” That question killed the round.
What Investors Are Actually Evaluating
In our experience pitching alongside founders and sitting in on investor feedback sessions, BFSI and fintech investors today are looking past the “does it work” question. They’re asking:
- Trust signals — Does the UX feel secure and compliant, even in version one?
- Retention over acquisition — Are users coming back, or did they try it once because of a referral bonus?
- Unit economics with real usage — Not projected CAC/LTV, but numbers from actual repeat transactions.
- Regulatory readiness — Can this scale without a legal fire drill at Series A?
None of these are things a stripped-down MVP demonstrates well. They’re exactly what a Minimum Lovable Product is designed to show.
A Case Where MLP Won the Round
We built the first version of a neobanking product for SME owners with a client in Bangalore. Instead of rushing a bare transaction dashboard, we spent the first six weeks on something most teams skip at MVP stage: a genuinely smooth invoice-to-payment reconciliation flow, because that was the single biggest pain point SME owners mentioned in every interview. It wasn’t “minimum” in the traditional sense — it took longer to build and cost more upfront.
But when the founder pitched to investors three months later, the product had an 8-week retention rate north of 70%, and users were spontaneously recommending it in WhatsApp business groups. The round closed in under five weeks. The investor feedback was blunt: “This already feels like something people love, not something you’re hoping they’ll tolerate.”
So How Do You Decide What’s “Lovable” in BFSI?
This is where most teams get stuck — they assume lovable means more features. It almost never does. In our work, the lovable layer usually comes down to three things:
- One moment of friction removed completely. For the lending client mentioned earlier, we rebuilt just the KYC flow using a video-based verification instead of document uploads. Drop-off went from 60% to 22% in six weeks.
- Visible trust cues. RBI/NBFC registration details, clear fee breakdowns, a human-sounding support option — small things that cost little engineering effort but change how safe a product feels.
- Speed in the one action users care about most. For a payments client, that was transaction confirmation time. We optimized it from 4 seconds to under 1, and NPS moved more than any new feature had.
None of this required building a “complete” product. It required being deliberate about which minimum you were optimizing for.
What We Tell Our Clients Before a Raise
At Speqto, when we’re building a first version for a fintech client with a raise coming up in 6-9 months, we push back on feature lists and instead ask: what’s the one interaction that, if it feels bad, makes a user never come back? That interaction gets the MLP treatment. Everything else can stay genuinely minimal.
Investors in this space have seen enough MVPs that “function correctly” no longer impresses anyone. What they’re funding is evidence that users already trust and prefer your product over the alternative — even a rough one. That’s a lovability signal, not a viability one.
The Bottom Line
Building lean is still the right instinct. But in BFSI and fintech, lean shouldn’t mean cutting corners on trust, speed, or the one flow your users care about most. If you’re six months out from a raise, the question worth asking isn’t “what’s the fastest version we can ship” — it’s “what’s the smallest version someone would genuinely recommend to a friend.” That’s the product investors are writing checks for right now.
