• Ruth Hoffmann, at Brainwave


• 23.12.2018 08:00 am
tax filing , Fintech

In the eyes of many, fintech is a progressive field unhindered by pretty much anything in the long run. And while many of the companies operating in this area do indeed progress quite easily and in large leaps and bounds, there are still some challenges faced by the sector as a whole which can’t be ignored. It doesn’t matter what kind of service one offers – even if they’re the best online tax filing company on the market, it’s still entirely possible to get swept up by some unpleasant developments.

Innovation Is Not Moving in the Right Direction

There’s a peculiar link between regulation and innovation, and many seem to agree that neither is moving in the right direction at the moment, at least with regards to their effect on most fintech start-ups. There have been some attempts to steer things the right way, but so far, it looks like people involved in the fintech market have to actively battle against certain negative impacts of its own progression.

The Choking Effect of Strict Regulation

Which brings us to the next important point – regulation is occasionally too strict for the good of businesses of this type, and the effects of this are probably going to stack up in the long run, too. It will be interesting to see how some businesses manage to overcome the issues posed by excessive government control, and we’ve already seen some creative attempts so far.

Poor Standardization of the Field

As progressive as fintech is, it also unfortunately suffers from the issue of lacking any good degree of standardization of its operations. Many companies involved in this line of work have to constantly adapt their moves to the way others are acting without any good arbiter in between. The final result is a mess on the communications level, and marginal success at best when it comes to major cooperative ventures. And this is not an ideal situation for the long-run growth of the sector.

Centralized Currencies

Currency is a particular problem that stems from the tight grip governments have on the field. For the most part, governments are still in control of the tools we use to execute transactions, and this has some worried for our current outlook for the future. Technologies like Bitcoin have sprung up in an attempt to counter the situation and provide a viable alternative for those who want to avoid the strict level of regulation imposed by governments on the financial sector. But still, we’re a long way to go until there is enough freedom for everyone involved in the field.

The Impact of Technology

Fintech is based on technology, and yet it’s strange to observe how it has had a questionable impact on its growth lately. There are many ways in which technology has actually hindered the potential progress of fintech, usually by making it easier for certain entities (not limited to governments either) to exert their power. Thankfully, it looks like many skilled developers on the market have a vested interest in the progress and success of fintech, and have been putting their efforts into that field accordingly.

All in all, it’s hard to tell where we will end up with regards to the growth of fintech and its potential for the future. The sector needs to overcome some real challenges imposed by the way laws work at the moment before it can see any real development, and hopefully it won’t take too long for these factors to arrive to the scene. Because in the end, we’re highly dependent on the development of fintech in many different ways, and it will have an impact on pretty much all sectors of society.