The last few years have been characterized by the rapid development of Fintech organizations. Still, there are many unresolved problems in the industry. Let’s look at the issues that are relevant to most Fintech companies.
Data Security Provision
Traditional security practices do not operate in the virtual space. The potential impact of this threat to users is very strong, as it is a loss of money and personal data. The decision may include using biometric authentication, data encryption, two-factor authorization, and others.
Government Regulations Compliance
The financial sphere is one of the most regulated in any country. Even if a company uses traditional software only, the government will always try to interfere and control its activity. Before starting any Fintech project, it is necessary to make sure that the technologies and software used in it comply with the laws and regulations of that country. To avoid possible errors, it would make sense to hire a lawyer specializing in the field.
Lack of Experience in Creating Mobile Applications and Services
Not every financial company can offer its clients convenient mobile applications. More often, they try to copy their websites, which results in completely inconvenient services for users. When creating an application, it’s necessary to remember that it has to unlock the full potential of a mobile device and support things familiar to every modern person: fingerprint unlocking, NFC chips, and QR-codes, as well as automatic credit card scanning for payments, geolocation, and other features.
Introduction of AI and Big Data Into Business Processes
The use of big data helps financial organizations accumulate personal information about clients, which is very important for banks. With the help of big data, AI automatically carries out the processes of detection of fraudulent actions, performs risk analysis, and effectively manages transactions.
Combining AI and big data is possible through machine learning. Still, it will require a large amount of data that most banking applications cannot process. A one-shot learning model that teaches a machine learning system with a smaller amount of data will help.
Integration of Blockchain Technologies
It is possible to significantly increase the reliability of the Fintech industry by introducing blockchain technologies that track all phases of transactions. However, government authorities and traditional banks are suspicious of it, so implementing this technology is difficult. The solution could be to comply strictly with laws and government regulations and to avoid violating government-imposed restrictions on the use of mobile services.
User Experience and Client Retention
Making the interface secure yet user-friendly can handle these problems. Although it’s vital to care about data security, avoiding making an interface too complicated is also important. For instance, two-factor authentication should be provided. Still, it should be easy to recover in case a password is lost. It is also useful to analyze the competitors’ actions to see how they solve these problems.
Ineffective Marketing Tactics
Fintech companies often suffer from a lack of understanding of their specialization, target audience, and strategies. It is important to define the advantages of the company, develop an effective marketing strategy (including advertising and cooperation with other companies), and invest a large amount of money, effort, and human resources into the services.
Lack of Personalization
Today the individual approach is to offer the client an effective solution to his problems conveniently and at the right time. For this purpose, it is necessary to accumulate the personal data of clients. The only way to do that is to develop a trusting relationship with them and prevent the loss of personal data.
Is There a Future for the Fintech Industry?
Fintech companies are in a lot of trouble right now. These include excessive government regulation and the suspicion with which traditional banks and financial institutions view it. But, because of their convenience to people, their share in the financial sector will only grow.