Fintech or financial technology is the modern-age financial industry that regulates the major financial operations these days. All technological developments in the banking and finance sector are happening due to the fintech industry. Though the industry is rising and shining in each state, country, and continent. Some fintech challenges still push it back and resist customers to use it.
Thankfully, the fintech challenges have solutions so that they won’t be discouraged.
Big Fintech Challenges And Their Solutions
These suggestions may help you solve many fintech problems and make them your USP to attract more customers.
1. Data Security
The biggest challenge that the fintech industry faces is the assurance that its customer data is secured. Cybercriminals are setting new standards every day so it is really difficult to overcome the cyber security problems.
It is one of the biggest reasons why customers resist trusting fintech companies. Thus, it is imperative to keep your company data secured.
Solution:
The problem is big yet the solution is quite easy but may sound complex.
Add the following security bars to your website/application or web application so that the authorized person should only access the platform.
- Biometric authentication
- Two-factor authorization
- Data encryption and obfuscation
- Behavior analysis
- Real-time alerts and notifications
2. Lack Of Technical Experience And Expertise
The fintech industry is a technology-influenced financial industry where all the services are offered due to technological advancements. Traditional financing and fintech have a major difference in technology integration than fintech has.
However, not all customers are pro with the mobile operations to access fintech services. That means many people are not comfortable with mobile banking apps, P2P apps, and other ways of fintech transactions. The industry needs some easy-to-operate fintech solutions that everyone should be able to use to transact. Even the ones who are not too tech-savvy.
Solution:
For people who are not quite familiar and comfortable the with mobile functions, companies can offer:
- QR code for payments
- NFC chips in shops
- Automatic credit card scanning with a lens
- Fingerprint authentication
3. Government Regulations Hinder Global Market Access
The very first and most prominent advantage of having the internet in the business world is access to the global market. The fintech companies are still struggling to get global market access easily due to government regulations.
Almost all countries have different banking rules and regulations according to their economies. It becomes really difficult for a fintech company (especially a startup) to enter a new country as there are many government rules and regulations which a company will need to obey. It is a huge process and sometimes may affect the company policies and USPs.
Solution:
First of all, make the company successful in your home town. It will increase the company’s authentication. Secondly, hire a legal consultant from the country you are willing to enter. Understand the legalities, vitals, government rules, and feasibilities. If it sounds possible, then only proceed.
Or else, you can create an entire business model for countries that do not support your company policies.
4. Blockchain Integration
Blockchain is made up of data blocks that contain a sequence of connected transactions that are linked in a specific order. Blockchain is a great technology a fintech company can ever adopt. However, many companies do not find it trustworthy or authentic to be used for their customer data. But, there are no such security issues associated with Blockchain. It is more than a requirement of fintech companies.
Solution:
Do not panic! Blockchain is safe. Rather it is made to secure the customer data. Thus, you can trust blockchain technology and adopt it.
5. User Retention And User Experience
You must be aware that in the digital world, user experience and user retention both play an important role. No matter which industry you are from, you will have to offer a good user experience to get user retention.
However, in the fintech industry, you can not give a lot of leverage. You will have to be strict with your security measures. Thus, creating a healthy balance becomes a great challenge.
Solution:
Do not be disheartened! You can still enhance the user experience of your visitors. First of all, make this thing very clear in your mind that data security can not be compromised at any cost. Even your customers will love your services more if they are secured.
Hire a UX/UI designer who has experience in designing fintech apps/websites/web apps so that you get your portal designed by experienced hands who know how to get maximum user retention.
The Bottom Line
The fintech industry is a booming industry and going to acquire a great platform in the coming time. Possibly all banking and financing activities will be performed online, resulting in more transparency and less black money and other online speculations.
If you are also planning to create a fintech industry, then you need to overcome these fintech challenges.