What Are The Fintech Challenges And Solutions In 2023?

fintech industry challenges

Different types of apps like mobile banking, insurance, equity financing, international money transfers, financial education, fintech loan app, stock trading, retail banking, and more are involved in FinTech app development. Such digital trends and innovation in the fintech industry are revolutionizing banks, people, and financial organizations to manage their finances.

Many drastic changes have been observed in the fintech industry with the integration of modern technology in the last five years. It has been identified that fintech companies are looking for a way to develop a good reputation in their respective field and boost their growth. The new fintech industry solutions have aimed to automate and enhance the services and processes within the organizations.

Research shows that the FinTech market is expected to grow nearly a CAGR of 6% and generate a market value of $26.5 trillion by the end of 2022. The fintech industry is seeing growth in demand due to growing investor interest and the rising requirement for insurance and loans. In addition, the sudden growth of the fintech business has been observed because of the growth of different sectors and their requirement for effective financial strategies. Therefore, it has been predicted that the fintech industry will generate more market revenue and grow efficiently.

The Challenges Faced By The Fintech Industry And Their Appropriate Solutions

The fintech firms experience many common problems like increasing losses, missed out targets, long-fund raising cycles, etc. These common issues occur because of mismanaging the leading lifecycle. However, the fintech industry regularly faces many challenges, which are explained below.

1. Blockchain Integration

Many fintech applications integrate blockchain technology as a better data exchange solution. Blockchain technology can make your fintech business more trustworthy because it allows you to track and analyze all transactions and prevent modifications. However, many financial companies need help in integrating blockchain technology.

You can take the help of the fintech app development services to integrate blockchain technology within your fintech business. In addition, these services can help you to understand government laws and guidelines and help to implement blockchain technology.

2. Data Security

The major concern in the digital world is data security for fintech app development services. If looking into the traditional banking systems, it is confident with CCTVs, security guards, heavy bulletproof doors, and vaults to keep the data secure and safe. But, when you compare it with virtual security, it has more impact on users, and the vulnerabilities are discreet as their finance is at stake with their personal information.

Therefore, the app developer needs to focus on the right fintech industry solutions that offer a high level of security. Developing a high-level security app may include biometric authentication, two-factor authorization, behavior analysis, real-time notifications and alerts, data obfuscation, and data encryption to create a more secure app.

3. Lack Of Tech And Mobile Expertise

It has been identified that all the finance banks or companies in the fintech industry need convenient or proper mobile banking services. It is because every user prefers to use a convenient and seamless option. In such a scenario, the lack of expertise in fintech app development services can lead to ineffective mobile applications that do not involve full potential to use in mobile devices.

If you want to enable your users with the best fintech app development services, then you must have some important features on your mobile. It may include NFC chips in shops, QR-code payments, two-factor authentication, automatic scanning with a lens, and others.

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4. Government Regulations

The finance sector is a more regulated sector where government interference is always seen. Government regulation will be the biggest interference even if you use traditional Fintech software that does not involve any crucial technologies and blockchain technology.

In such a scenario, you need the help of a professional fintech app development company that can help you with legal compliance before utilizing the software or building an application. Also, you can hire a legal consultant to understand all the policies and basic details. You must know the current government policies before entering the fintech industry.

5. User Experience And User Retention

One of the major challenges for the fintech industry is user experience and retention. However, the fintech app needs to manage a balance between security and user experience.

You can hire a professional fintech app development company to develop your fintech app. These professionals will ensure the UI/UX part is user-friendly and secure. In addition, they will integrate two-factor authentication to provide a seamless user experience by analyzing the competitors in the industry.

6. The Integration Of AI And Big Data

Research shows that 79% of global and 82% of US bankers believe that will revolutionize the interaction process and the fetching of banks’ data with a customer with the integration of artificial intelligence. When an organization integrates big data in its fintech business, it will be easy to gather the user’s in-app activity, personal information, and social status relating to financial habits and behavior.

The finance bank or companies need these data to proceed when providing high-risk banking services and credit ratings. In addition, big data helps automate the process with AI to manage effective transactions, perform a risk analysis, and detect fraud. However, fintech businesses cannot implement these advanced technologies, which is why they face major challenges.

You must look for fintech industry solutions by combining big data and AI through machine learning. It would be best if you utilized a one-shot learning model to solve this challenge that can allow you to fetch more data sets and train your potential machine learning system on smaller data.

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The fintech industry is going through many challenges, like AI and big data integration, user experience and retention, government regulations, data security, blockchain integration, lack of tech and mobile expertise, and many others. Therefore, it would be best to balance the new compliance and modern technology with the traditional system to disrupt the financial business. However, with the help of Mobiosolution’s expertise, we can address these challenges through innovative solutions such as implementing advanced technologies, adopting certain data management practices, and compliance with industry regulations. Mobio Solutions is a leading Fintech app development company in UK has the expertise to provide these solutions and help the fintech industry overcome its challenges in 2023, allowing it to continue its growth and success.

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