What are the biggest challenges for the Fintech Industry?

Considered one of the most innovative & demanded industries internationally, the fintech industry has offered modern financial solutions through technology and digital tools for the last decade.  

Understood as a combination of the terms “financial” and “technology,” refers to businesses that use technology to enhance or automate financial services and processes. 

With a value of USD 112.5 Billion in the year 2021, is expected to grow around USD 332.5 Billion by the year 2028, following a Compound Annual Growth Rate (CAGR) of 19.8% over the forecast period, according to data presented by Vantage Market Research. 

Finding venture capital & the right investors.  

Although this is certainly a process more related to the startup phase of a fintech, due to its natural vision to grow and go worldwide, fintech’s usually rely heavily on considerable capital and investors.  

But this could become a challenge if the business doesn’t have a clear list of objectives or goal alignment between the investors.  

That is why it is so important to have a clear purpose and determine the list of factors venture investors are going to consider for the project.  

Whether you are in the development phase or even full-on operations, epam anywhere shares the following questions you must follow:  

• What are the problems solved by the product? 
•  Where are the potential risks to the business? 
•  How big is the market opportunity?  
• What makes the founders think the product will be successful?  
• How will the investment capital be used to achieve the product’s goals 

Competition in the fintech industry.  

Yeah, there are a lot of fintech’s offering great financial services, and a lot of them are already huge, but hey, they are not the same.  

Feeling confident about your product or service will be of great significance to know your value proposal once you determine to go B2B or B2C.  

Once you have that confidence and full knowledge of what your product offers, you will detect the business opportunities and the problems it could fix.  

Besides, there are a lot of areas fintech can attend from insurance, digital wallets, investments and more. The opportunities? A lot.  

Industry regulation.  

A very important subject that is constantly discussed, especially lately among experts and public figures.  

Finance, being one of the most regulated sectors, naturally, because of the very sensitive data and transactions it holds, raises a lot of standards and processes to secure safety and good practices.  

But in the fintech industry, many questions have been made about its safety and even legality, criticizing some practices as not very different from casinos.   

Although we could make another article explaining more in depth the whole processes involving regulation, for the moment, we are just going to point out fintech’s need to stay in touch, more than ever, about all the necessary policies and relevant information to share with the user.  

This could be in a specific section in the webpage or app, talking about general concerns and even financial education, in the format you prefer. Whether video, blog or even a certificate!  

Users also consult this type of information in different omnichannel media, like phone service, live chat or email.

Something achievable by specialized nearshore services providers.  

Data security.  

As mentioned, users appreciate some privacy in their finances.   

Securing that their money or transactions are safely secure from bad practices is imperative.  

Why? Cybersecurity company appsealing shares that the most preferred methods like one-time passwords, fingerprint, codes, although effective, are not invulnerable to cyberattacks.  

Recommendations to attend this area go from establishing an internal IT department, capable of processing and comply with the required cybersecurity certificates and constant supervision for compliance.  

User experience. 

For many years, we were subjected to not so cool customer attention from traditional financial institutions. Well, fintech’s could be credited with enhancing CX through real care and attention.  

Therefore, consumers have higher standards on how to receive attention and resolve a problem, and with that comes more demand within the different attention channels available for clients.  

The business may be going well, but you are receiving a lot of customer inquiries. Well, that is the moment to determine not only how you can obtain new clients, but also retain and ensure loyalty.   

But with all the rising costs and economic uncertainty, having alternatives to take care of your CX operations can be possible through a nearshore call center, lowering costs and securing efficient market reach and attention. 

Conclusion.  

We are in an exciting time where technology has brought us amazing tools and possibilities to improve or even satisfy our financial needs.   

FinTech’s will continue growing at a fantastic rate, which will also bring benefits for both the consumer and the company, but these challenges must be considered to thrive and adapt.   

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