5 tech challenges for the FinTech in 2020

A lot of tax payrolls

Digital innovations have started shaking the FinTech industry for the best over two decades ago. During this time both technologies and customer expectations have been changing. To stop on top, companies had to introduce the tech solutions that facilitated their business and maintained customer satisfaction.

As it would seem, all tech challenges that confronted financial companies before should be solved, but even today companies are facing lots of challenges that are yet to be resolved.

The PwC report named the Blockchain, cybersecurity issues, digitization among the top challenges in the 2020s and sets up the best approaches to moving forward.  

Top Challenges

Challenge #1: Cyber-security

FinTech has disrupted all aspects of the industry – banking operations, lending, investments, insurance, payments, etc. While FinTech led to the company growth and thus facilitation of the way of service delivery, it raises concerns over customer data privacy.

Personal data protection is of the utmost importance to every financial service. With the emergence of FinTech, more data is now available in digital formats, which makes it easier to analyze information, but also makes data more susceptible to security breaches. Protecting such data and providing it securely becomes a real challenge for institutions. 

Cybercriminals become more and more shifty. And although organizations do a lot to protect themselves, it becomes harder to keep the data safe. Such attacks cost companies millions and the implementation of solutions that ensure complete security is crucial as never.  

The Blockchain that is also known as Distributed Ledger Technology (DLT) is an answer. Having emerged several years ago, it becomes an integral part of the financial industry bringing the era of “smart” contract to the table. Blockchain increases data security by making the records saved in the blockchain transparent and immutable that is achieved through the redundant and distributed storage of each record at multiple nodes throughout a large network.

Challenge #2: Blockchain

Security is not the only challenge blockchain can counter. Another point of its importance is that it makes every transaction transparent and traceable. 

The true value of Blockchain is covered by two points:

  • It’s decentralized

The digital ledger is being distributed to different nodes which removes the need of the third party to store and process the transaction data. At the same time, it keeps all your data secure and makes it impossible to be attacked. 

  • It’s unchangeable 

Once recorded into a ledger, the blocks can’t be altered. The information is being sent to a ledger as a transaction by a node. Once transactions are added, the block is mined. Through this process, an immutable ledger is created. 

The list of benefits of the Blockchain is growing as long as financial institutions feel much safer using secured transactions without third-party being involved.

Challenge #3: Poor UI / UX

A user-friendly interface isn’t a buzzword. And sometimes UI / UX is overcomplicated. The key point in designing the app is not only how it looks but also how it works. Creating a seamless, intuitive experience for the user, whether they are a consumer or an enterprise customer, is critical in today’s environment.

All UI / UX requirements can be interpreted into three main principles:

  • Easy-to-understand

When creating an app, we have to notice who is going to use the product and keep in mind their background. Most users don’t understand the financial-related terms and certain data meaning. 

  • Simple flow

Use gradual structure even it is related to complicated processes. At this point, overwhelming users with lots and data and functions can distract them thus making dissatisfied with the product. 

  • Adaptability

All the important information the user expects to get should be comfortably placed on any screen size.

Challenge #4: Cloud

With the evolution of technologies, financial institutions started to implement Cloud-based innovations. Although this technology can provide immense support to every financial institution, many of them don’t even know the way it could benefit their business. 

Cloud tech offers storage space thus streamlining the workforce. Cloud implementation makes respond to changing customer and market requirements quicker. 

The use of cloud services doesn’t require any upfront investments and you pay for what you use. 

At the same time, it provides better security. Public clouds have already in-built tools needed to keep data secure and confidential, which is not available on local services.

Challenge #5: Old-aged technology

Most large companies have begun their development several decades ago. As the technologies change, it’s harder to scale and processes become more complex.  Now, these companies are likely to face trouble trying to migrate their legacy systems to new technologies.

Two options are available to improve the things:

  • Make a quick-fix by launching a front-end application for customers

This can be just a temporary solution as it provides an easy and user-friendly interface

  • Develop a whole new system

Development from scratch is a radical solution but the result is crucial for future company growth and scaling. It’s not a quick and cheap process anyway, nonetheless, it overhauls the entire business operations making them faster and transparent.

Conclusion

Challenges are an inevitable part of our lives. Some of them are more complicated than other ones. At the same time, challenges are what drive the FinTech industry to constant development. 

The implementation of digital innovations – be it Cloud services or Blockchain – makes your business operation smooth and transparent thus providing a convenient solution to customers. 

The only point is finding a dedicated team of experts with a solid experience in the development of the above-mentioned services to make your cooperation reliable and professional.