With the tremendous growth in the financial services industry with the boom of fintech start-ups and companies after the coronavirus pandemic, there have been some key challenges faced by the industry in dealing with the trends in innovation, consumer experience, and globalization.
With the constant disruption of trends and innovation of financial products, companies are faced with the challenges to constantly pave the way for new trends and with the influx of new tech in the market, banks and traditional financial institutions struggle to keep up.
Trends like Machine learning and Artificial Intelligence are getting integrated within banking systems, wealth management and system personalization-making it difficult for banks to keep up with the trends and balance human personnel with technology.
However, there are still a large amount of the population who still prefer a human interface to deal with their personal finances. The evolving ways of customer service is changing the way businesses are creating their models.
Regulation across the Globe
As fintech is expanding to all areas of the world, companies are faced with the risk of implementing regulation and compliance. When dealing with finances and large transactions of finances without a third intermediary, ensuring high resilience and security measures to prevent hackers, company malpractice, and cyber attacks is a number one priority. Considering a strong framework for regulations is necessary for the foolproofing of fintech business, which can be viewed as a struggle within the initial stages.
With financial tech institutions on the rise, greater software products revolving around cryptocurrency and financial acquisition, there comes a steady incline of competitors within the industry.
Building trust with customers is crucial for fintech firm success as stated by several CEO’s and CFO’s of top Fintech firms. With firms increasing the number of offers and provisions available to customers, usage of automated financial payments is still relatively new. This may cause customers to not be well equipped with the knowledge of fintech causing heightened worry for the trust of the service. This is why Fintech firms focus on being as transparent as possible and communicative with every level of the process to remove any preconceived notions customers have held regarding lack of trust with decentralized financial methods of payment.
As fintech gets deeper and deeper integrated into the financial institutions of asia pacific regions, the US, UK, and so on, there comes a need to overcome enormous barriers of expansion. This is often typically related to reliance on traditional bank systems and relying on them to find banking solutions that can account for the countries or states they wish to reach.
Fintech needs to be regulated among all 50 states in the US in order for tech solutions to be offered among customers which can be a costly and time consuming process for listening and regulation. The goal would be for ultra transparency and trust among partnerships for international payments to be the future foreign transactions.