Challenges Faced by Banks and FinTech Source: Financial Tech Review Fintech is transforming the way banks used to work. Payments and financial services are evolving with technological advancement. UPI is now one among the foremost preferred payment methods for both P2P and P2M transactions. Online commerce has become more convenient due to payment solution companies and their products. While all of those have benefited customers to an excellent extend, banks are still struggling to deal with the towering change that fintech has born to.
Let us check out some prominent challenges for banks and fintech to figure together: Impacting Consumers with a scarcity of Exposure to Technology These technical shifts may go wonders for tech-savvy consumers. But, there’s an out sized portion of the population without much exposure to technology. It’s utterly important to deal with those consumers who aren’t well-acquainted with technology. Several modes of everyday bank transactions could seem complicated to those consumers. Also, it’s not compulsory for banks consumers to open accounts as long as they need financial and technological knowledge. Therefore, fintech and banks may find this as a big challenge to figure together. Trust Issues Trust is some things that take tons of your time to create. Banks have won the trust of their consumers over the various years they need operated. When it involves finances, people are reluctant to undertake something new immediately after it gets introduced by the banks. It’s often a standard case that an answer provided by fintech isn’t instantly accepted by many. As an example, customers still prefer the old-school method of banking over UPI when doing larger value transactions.
Banks May Face Increased Tech Dependency Over the years, many manual works have shifted to automated processes. But manual processes still thrive at the core. Some processes, alongside legacy systems and their regulatory framework, make it difficult for banks to adopt new technologies. It’s going to require plenty of effort to implement changes. Fintech bodies are fully customer-driven. Their motto is to form it as easy as possible for a customer to perform all their financial activities. Therefore the partnership between customers and fintech can cause an entire transformation of how traditional banks work while increasing tech dependency for the banks.
Now let us check out the issues that fintech can solve: Security Concerns
People are now more concerned about their financial information than ever before. The safety measures like PINs that were wont to protect people’s data might not be so secure. For hackers, it’s not so difficult to guess the four or six-digit number. Fintech is stepping ahead to unravel security concerns by integrating biometric security measurements into certain programs. ATMs now can scan a person’s fingerprint rather than asking them for a PIN. Other sorts of biometric identification are biometric identification and voice recognition. Reaching people that can’t afford a checking account Few years back only a couple of people had bank accounts. Even now, a substantial portion of the population doesn’t have a bank account- the first reason being insufficient money. Fintech can solve this issue by broadening access to financial services and by expanding the range of monetary services available. As an example , instead of requiring a minimum account balance which may be unaffordable for somebody on a coffee income, a fintech app can help an individual open a bank account and save whatever they will afford, like $5 per month. Access to Investing Being Limited Fintech has helped people that were traditionally reluctant to take a position by expanding access to investing. Previously, investment firms wont to target male customers, ignoring women
who may need been curious about investing. Certain apps are designed to specialize in opening investment accounts and creating portfolios for patrons who may need been ignored by brokerages. News Source: How Fintech Can Solve Major Problems Facing the Financial Industry? Significant Challenges Preventing Banks and Fintech to Work Together