• Olha Zhydik, Content Marketing Manager at ELEKS


• 17.11.2021 07:00 pm
custom software development , Olha Zhydik is a Content Marketing Manager at ELEKS, a global custom software development company. Olha has been working in the IT industry for over 10 years, including 6 years in marketing. Thanks to her diverse experience, her writing offers a fresh perspective on how technology can help businesses not only innovatively solve problems but also gain a competitive edge. You can connect with Olha on Linkedin or Facebook.

Many businesses deal with fintech daily – from streamlining transactions between friends to processing sophisticated financial information. According to KPMG's Pulse of Fintech H2’20 report, the fintech sector saw unprecedented investments levels reaching $105.3 billion in 2020.

With the start of the pandemic, many companies have encountered disruptions, and the financial industry was no exception. Many organisations had to learn how to operate under the social distancing restrictions and turned to fintech software development companies for help. Advanced technologies helped organisations across industries to address challenges and untapped new business opportunities. 

The most common challenges financial companies must overcome

The financial industry has been growing, but there are still some challenges to overcome. By understanding key obstacles, companies can address them with technological solutions and improve the quality of their services. Here are some of them and how fintech helps companies to tackle them:

• Legacy systems. Even though pandemic has accelerated the adoption of innovative technologies, the majority of traditional financial sector players rely on obsolete technologies and business models. Digital transformation and adoption of new financial technologies are pretty time-consuming processes, but companies that want to stay ahead of the competition should speed themselves.
• Keeping up with the regulations. With the rising number of technologies that help streamline financial operations, the number of rules also increases. Anti-money laundering act, general data protection regulation (GDPR), the revised payment services directive (PSD 2) are among many other legislations that regulate how financial companies should operate. It’s challenging to keep track of all the changes throughout multiple regulations, and here’s when fintech come in handy. For example, an AI-powered tool can send a company notification once a new law or an amendment is made.
• Ensuring data security. In 2020, we saw an unprecedented amount of high-profile cyber-attacks, including Solar Winds and Colonial Pipeline. Financial institutions collect massive amounts of data about their customers, such as passwords, credit cards numbers and other sensitive information. Therefore, it is of utmost importance for financial companies to ensure the secure storage of user data. Cloud computing, blockchain and other innovative technologies add the security levels and help mitigate the risks of a data leak.

Top business opportunities for fintech adopters

Fintech software development expands the range of available financial services, streamlines operations, boosts economic growth, and creates new revenue streams. Most innovative technologies can help businesses to overcome legacy systems related and other challenges. Let’s go through the main opportunities presented by fintech:

• Mobile banking. With the global shift to digital services, it is no surprise that mobile banking has gained momentum. Mobile banking allows customers to access financial services without visiting a physical bank branch and help organisations to win new clients. For example, Monese, a UK-based company offering mobile-only services, has introduced mobile banking tools that deliver financial services for customers with any address or credit history.
• Digital payments. The low-touch economy spurred by the pandemic has increased the number of online payments. In 2021, 82% of US consumers used digital payments, including in-app online purchases, person-to-person payments and other operations where users used to use cash. Launching a digital payment processing service sets a company to meet customers’ expectations, enhances the security level of transactions and open new business opportunities.
• Smart digital investments. Digital investment platform poses a great potential for attracting customer and gaining profits. Usually, such platforms have lower fees than traditional financial institutions. Moreover, the company can develop a robo-advisor powered by AI and machine learning algorithms to help customers make data-driven investment decisions.
• Personal finance. Businesses can use fintech to help their customers manage personal finances. Developing a program or mobile app that allow customers to handle their budget, navigate savings, set up regular payments and minimise mistakes can bring a company many benefits. While a product helps users manage expenses and save their time, companies will receive payments for the services provided.
• Lending and microfinancing. Fintech can help to set up virtual lending platforms alternative to traditional banks. By using AI-powered tools, companies are able to analyse applicants and establish their creditworthiness within minutes. Moreover, such platforms are far more user-friendly and charge lower fees, which attracts more customers.
• Support regulatory compliance. The burden of regulations often falls on financial institutions and increases the costs and complexity of ensuring regulatory compliance. Regulatory technologies, or regtech, encompass a wide range of solutions powered by big data, AI, machine learning that help companies to abide by the rules of regulatory bodies successfully.

Final thoughts

Fintech transformed traditional financial operations and presented solutions that allowed companies to work under social distancing restrictions. And while the world is slowly moving back to normal, digital solutions are likely to stay. There are many other business opportunities presented by fintech that businesses can use to their advantage. Do not lose them and unleash your potential.