However, there are many other key challenges we’ve come across through our studies and experiments that the fintech industry faces every day. Let’s discuss this:-
1) Inadequate knowledge of mobile technology
To keep the modern, tech-savvy customer base delighted, it is crucial for fintech companies to provide a seamless mobile experience. Users around the world prefer a smooth and comfortable experience, especially when it comes to something as personal and pressing as their finances.
The lack of a tech-first approach in fintech mobile development services leads to unusable apps that do not fully utilize mobile devices. Apps may not profit from NFC chips, geolocation, fingerprint unlocking, or other functionalities. With these features and technology, a fintech company can transform their customer experiences.
Solution:
To provide a end-to-end seamless mobile journey, fintech companies can leverage the following mobile functionalities::
- QR codes
- NFC chips
- Automatic credit card scanning via the lens
- Two-step authentication with fingerprint
2) Integration of Big Data and AI
Big Data and Artificial Intelligence have impacted every enterprise. Big data can be used by companies to acquire personal information on users, including their social status, financial activity, habits, and in-app interactions.
This information is critical for banks, particularly when it comes to providing credit ratings and other risk-based services. Artificial intelligence automates the entire process of detecting fraud, analyzing risks, and managing transactions efficiently.
However, using these technologies presents several obstacles for fintech businesses. They require a specific set of skills and constant monitoring.
Incorporating new technology into your current operations is not a piece of cake. Change management is a huge component in such scenarios and will require adoption internally as well as externally from your users.
Solution:
To merge AI with large data, you must first educate AI using machine learning. You will need a large amount of data to train your system. Most financial applications are unable to process and retrieve enormous amounts of data.
This can be resolved by using a one-shot learning model, which allows you to train your machine learning system with fewer quantities of data.
3) Blockchain Integration
You will find many fintech applications that are integrated with blockchain technology. Some companies don’t find blockchain a feasible solution, while others consider it a solution for better data exchange.
You can make the fintech industry more trustworthy by implementing a blockchain. It allows you to analyze and track all the phases of a transaction and prevent any changes to it so that you can always keep an eye on it. However, integrating a blockchain is quite a challenging task for many financial organizations.
Until now, banks and other traditional financial institutions have been slow to adopt the blockchain trend, while fintech startups have been making confident disruptions in the industry.
Solution:
As we know, it’s not easy to integrate blockchain technology. While implementing this technology, make sure you adhere to government guidelines and laws. Moreover, avoid any government restrictions concerning your mobile services, as they are still hesitant to allow massive blockchain adoption.
4) Customer Experience and Retention
Customer experience and retention are potentially two major concerns for the fintech sector.
Customers prioritize ease of usage, seamless communication, the privacy of their information and the security of their finances. To maintain customer satisfaction and trust, it’s essential for fintech firms to offer an easily accessible application, a user-friendly interface, seamless transactions, prompt customer support, and robust security measures.
Customer retention directly correlates with the quality of the customer experience. Thus, ensuring a positive experience is pivotal for retaining users.
Solution:
While developing a fintech app, you have to make sure that the UI/UX part is secure, there is consistent customer support in place, and the app is user-friendly.
Furthermore, users are ready to access an app with two-factor authentication. But asking for the details again and again for a login may frustrate them.
Additionally, you can analyze your competitors and observe what they are using to offer a seamless user experience.
5) Credibility issues
Getting a product or service onto the market may be easy, but gaining customer trust and loyalty takes a lot of work. This is even more relevant in the case of the finance industry. With money involved, it is natural for people to be skeptical about switching to something new, such as fintech, to make their financial operations simpler. As in the case of most new product launches, gaining customer confidence takes time and substantial effort.
Solution:
Educating customers about fintech is the only sustainable way to gain their confidence. Instead of aiming to sell your product, increasing awareness about the benefits of fintech and how secure it is will go a long way toward gaining a larger consumer base. Create compelling educational content through blogs, case studies, customer testimonials, and whitepapers, along with the use of infographics,to showcase how your platform is beneficial.
6) Data privacy and security issues
In today’s world, data privacy has become the talking point across industries. Traditional banking services are more physical. They are deemed highly secure by the general public, as they rely on vaults, security cameras, guards, and much more to keep customer assets safe.
But when we shift to the virtual world, things are not as straightforward. Mobile services, online banking, payment applications, and fintech are perceived as more vulnerable from both a financial and personal information point of view. This can restrict the high potential of the applications that FinTech platforms offer.
Solution:
In the same way that banks and financial institutions portray how secure they are, you will need to make your FinTech platforms highly secure and increase awareness about the same. Some ways of doing this include making sure the platform:
- Incorporates detailed documentation
- Has biometric and multiple-factor authentication
- Works on encrypted data technology
- Provides real-time alerts and is constantly updated
- It has been extensively tested to be secure against hacking
Showcasing all these features will put to rest the doubts that customers have regarding data privacy and security issues.
Conclusion
While fintech companies have revolutionized several issues that have plagued the finance industry for decades, there are still challenges that need to be addressed. Regulations and various government policies are a huge hurdle for fintech companies.
However, it could pay to strike a balance between the adoption of new technologies and compliance with the traditional system to disrupt the financial industry.
Although it’s not easy for traditional banking to adopt new trends and technologies, with time, mobile technologies will become even more common in the financial sector, as they’re impactful and convenient for people while helping banks work more efficiently.
