Today, FinTech startups are globally widespread becoming an industry that helps drive countries. Many believe that with a boost, FinTech startups can change the world. FinTech in countries such as the UK, China, Singapore, Hong Kong, and Thailand are not only supported by the private sector but the government is involved and provide beneficial policies. They seek to enhance development to the next level, therefore, substantial steps shall be taken to help FinTech grow and advance further.
World-class Tech conference in Lisbon, Portugal mentioned 5 challenges that will efficiently bring FinTech to a larger crowd. The session is “Financial Inclusion: Collaboration is key” by Mastercard’s Ann Cairns, Accion’s Michael Schleien, WorldRemit’s Ismail Ahmed, and Quartz’s Eshe Nelson.
1st challenge – Trust comes first.
Trust in the first challenge because security is the first factor considered by users when deciding to use financial services. Today, e-payment services or online payment welcomes an increasing number of users and has completely disrupted traditional types of payment services. The next step is reaching out to users who have not moved to online services as they still don’t trust online transactions and doubt online identity systems. Service providers must demonstrate credibility with preventive measures for cybersecurity as well as roadmaps on how to resolve and alleviate problems.
2nd challenge – Aim for alliances, not competitors.
It may seem that FinTech poses a threat to banks when actually they can fill each other’s missing gap. Banks seek ideas and innovation to improve their business while FinTech startups need funds or customer base to advance and develop their innovation. Therefore, collaboration is beneficial and becomes a booster for the financial industry. Also, this partnership can surely bring about higher quality outcomes as banks possess profound experience so they know the flaws and solutions for common problems. When combined with ideas from FinTech startups, the result is competent innovation.
3rd challenge – Services for new generations that includes the previous one.
Although more users are switching to digital financial services, yet traditional processes are still utilized by large groups of users. One main reason is that technology’s quick change exceeds some people’s usual pace. Therefore, in order to gain new users, financial institutions or banks must agree to build new systems alongside existing ones. Then, users can personally experience the benefits such as convenience, lower fees, and time saved. Afterward, they can decide whether to utilize the new system.
4th challenge – Promote financial Inclusion.
Unbanked individuals exist around the world and FinTech, as a new tool in the industry, needs to help lessen the unbanked and embrace financial inclusion. Today, FinTech startups seize the opportunity and launched services such as credit scoring services that give additional credit scores added to the usual scores from financial institutions. This becomes an opportunity for those who risk failing the usual scores and a second chance for those who have never passed previous evaluations. Find out more about Financial Inclusion and Credit Scoring here. In short, one of FinTech startups’ core duty is to deliver innovation that best assists the unbanked.
5th challenge – Game-changing innovation.
Another challenge for FinTech is to create technology that will change the financial industry. An example is how Apple was the game changer for communication technology. Apple introduces a phone that changed normal mobile phones to smartphones. The benefit of such change gave users a gadget that made life easier. If the financial industry has a game changer, it will tremendously change the way of life.