Challenges for the FinTech industry

Fintech is a relatively new industry in India, but it is expanding quickly because to a sizable market, a startup ecosystem that values innovation, and kind government rules and regulations.

This young and vibrant industry is populated by a number of startups, while non-banking financial organisations (NBFCs) and conventional banking institutions are still catching up.

What is FinTech?

Any new technology that aspires to enhance and automate the usage of financial services is referred to as “fintech,” or financial technology.

Challenges for the FinTech industry

1) Data Security

Whether it’s mobile banking, payment applications, or Fintech in general, data security has emerged as one of the top issues in the online world. As we all know, conventional banking institutions are confident in their ability to keep their data safe and secure with security guards, CCTVs, vaults, and massive bulletproof doors.

Overcome Points:

You can establish a high-level security app with the help of the Fintech app development company. The app may consist of the following factors to make it more secure:

Two-factor authorization
Biometric authentication
Data encryption and obfuscation
Real-time alerts and notifications
Behavior analysis

2) Compliance with Government Regulations

One of the industries that is highly regulated is finance. Even if you utilise conventional Fintech software that omits blockchain and other essential technologies, there will always be government intervention.

Solution
Make careful to verify that the software is compliant with the law before using it or developing an application. Additionally, if necessary, you may employ a legal adviser to walk you through all the fundamental guidelines and policies. Make sure your legal staff is informed of the most recent government regulations before you hit the market so you can make the necessary changes right away.

3) Lack of Mobile and Tech Expertise

Some banks or financial organisations in the fintech sector lack adequate or practical mobile banking capabilities. Although some banks attempt to mimic websites, nobody would choose a mobile application in today’s digital environment. Every user seeks a simple and practical alternative.

Solution

Your mobile must have the following features to enable users with fintech app development services:

QR-code for Payments in public transport
NFC chip in shops
Automatic scanning of a credit card number with a lense
Two-factor authentication with a finger-print.

4) Big Data and AI Integration

Accenture reports that 82% of US bankers and 79% of bankers worldwide think AI will transform the way banks get data and communicate with consumers.

Big data and artificial intelligence, as we all know, have an effect on every firm. Organizations may gather personal data about consumers, from social status to financial conduct, habits, and in-app activity, using big data.

For banks, this information is crucial, particularly when it comes to providing high-risk banking services and credit ratings. Big data enables AI to fully automate the process of identifying fraud, doing a risk analysis, and efficiently managing transactions.

Solution

Machine learning will be used to train AI in order to mix it with huge data. To train your system for this, you will need a lot of data. The majority of banking applications can’t parse and retrieve several different data sets. Therefore, by using a one-shot learning model that enables you to train your machine learning system on less quantities of data, you may tackle this issue.

5) Blockchain Integration

There are several fintech applications that include blockchain technology. While some businesses don’t think blockchain is a workable answer, others see it as a way to improve data interchange.

By utilising a blockchain, you may increase the credibility of the Fintech sector. Because it enables you to monitor and evaluate each stage of a transaction and stop any modifications from occurring so that you can always keep an eye on it. For many financial firms, implementing a blockchain is a difficult undertaking.

Solution

As is well known, integrating blockchain technology is difficult. Make sure you follow all rules and regulations set out by the government when you put this into practise. Additionally, stay away from any limits placed on your mobile services by the government since they are still unwilling to permit widespread blockchain implementation.

6) User Retention and User Experience

User experience and retention are two of the top problems for the fintech industry. A financial app should, however, strike a balance between security and user experience.

For instance, you should provide a mobile banking solution that is neither too difficult to use nor simple to breach.

Solution

Making ensuring the UI/UX component of a financial software is safe and user-friendly is essential. Users are also prepared to utilise two-factor authentication to access an app. However, having to repeatedly enter their login information may irritate them.

You may also research your rivals and see what methods they use to provide a flawless customer experience.

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