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Challenges faced by Fintech companies

Though technology and technological inventions unfurled immense employment opportunities alongside making payment and business a simple affair, technological advancements like Fintech are encountering myriad problems. Many of the strategies employed by these companies to attract an audience proved to be futile frequently. The capital these companies invest in an enterprise becomes a huge loss. Therefore, in order to derive profit from any new endeavour, retailers should employ sustainable strategies which last for long. The following are a few challenges encountered by Fintech companies of late.

  • Trouble in maintaining confidentiality: Companies gather a lot of data which is expected to remain confidential. Since most of these companies provide online billing and credit card billing facilities, lots of personal formation is transferred from the customers to the retailers. Minor neglect or intentional breaches can result in the leaking of various confidential personal information. Therefore the security of the consumers is at stake. In order to rectify this drawback, companies are employing multiple security applications. At this juncture, people also contemplate diligently cyber security. Security experts propose not to install applications randomly. They insist on probing and analysing every application prior to installing them in the device.
  • Errors committed by the customers: The lack of authentic knowledge about technology and the applications result in the customers’ committing errors which can lead to immense loss to the customers and producers. This inadequate awareness regarding Fintech makes the tech world a safe haven for cybercriminals. Cybercriminals take advantage of the consumers’ ignorance, and this ultimately results in the scam of online transactions. To rectify this trouble, the companies have ventured forth to spread awareness among the customers regarding this matter. Besides, they have also employed various tutorials in order to reduce the errors committed by the customers.
  • Government interference: Since capital or Finance affects the nation’s development, it is highly controlled and managed by the government. Even if the company uses essential software, the government might try to verify the authenticity and credibility of the software. The companies would only be able to perform activities after rigorous verification. This can cause delays in the company’s transactions. Therefore, companies should know every legal law about their realm before undertaking any endeavour. They should also take prior permission for their activities.
  • Blockchain integration: Since Fintech involves cumbersome data, many companies consider blockchain integration the best mode to exchange data. Nevertheless, a few companies are sceptical about the reliability of this technology. Blockchain technology permits the company to have an idea regarding its transactions. The retailers could keep track of all of their business proceedings. The credibility associated with conventional banking and the risks involved in blockchain integration poses major threats to employing this mode of Banking.

Though employing technology in the banking sector can be challenging, strategies like spreading awareness, utilising rigorous security apps, using encrypted data, and taking prior government permission can help in the smooth functioning of technology-integrated banking.

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