FinTech App Development: How Are The Fintech Companies Overcoming The COVID-19 Pandemic?

Do you know that the fastest-growing sector across the globe is FinTech? Still puzzled? Then go through the latest report from NASSCOM that has revealed a mind-blowing fact about FinTech application development. According to it, the given FinTech industry will soon touch profit worth $45 billion at an annual growth rate of 7.1%. But thanks to the COVID-19 crisis, all the good work has boomeranged. Every industry is facing a survival crisis, and even FinTech has to bite to the dust. Now, the world is shifting its strategy from ‘recovery’ to ‘resurrect’ to overcome the challenges arising from the given pandemic. In such a scenario, the FinTech industry is not far behind. Be it searching for investors for funding, adopting new innovative ideas, or going towards local or global expansion, every new and old FinTech app Development Company is struggling to stay afloat during the given crisis. Furthermore, the most vital aspect of the given industry is providing the highest priority to the security of their customer’s data that is haunting them to a great extent. So, let’s have a look at some of the major challenges that are currently being faced by the genetic app Development Company and how they are overcoming them convincingly.

1. Challenges Associated with Data Privacy & Application Security

To the credit of FinTech enterprises, they can hold a large volume of highly delicate user-related data (that includes income & investment, credit card details, social security number, etc.). What’s more, online financial (and banking) services have a penetration that always puts user’s data at high risk. Many surveys have pointed to the fact that about 50% of the global financial businesses have suffered at least one case of a data breach since shifting their work from the office to remote working conditions. So what does it imply? According to it, restrictions due to COVID-19 have made IT infrastructure in remote condition easier to breach for the hackers. Even shifting to cloud computing technologies is also not safe from vulnerabilities. To protect the financial system from such loopholes, FinTech application development companies have come up with novel ideas. What are they? They were incorporating security tools (such as data aliasing) in their system to identify such vulnerabilities (cross-site scripting, system misconfiguration, etc.) and mitigate them as fast as possible. 2. Challenges Associated with Effective Management of Remote Working With the widespread devastation due to the ongoing pandemic, most of the enterprises have resorted to remote working. As per the government orders, work from home (WFH) is the new norm until the pandemic ceases to exist. Though the FinTech industry has shown exceptional caliber to get adapted to the given crisis by adopting the new WFH norm, it is still facing numerous challenges in the proper management of their employees and efficiency. With the imposing of social distancing norms of the government, managing the entire workforce has become a quite daunting task even from using technology. Likewise, the safety of the financial data of the customers becomes a case of concern as any misuse will result in loss of business. Although remote working has its drawbacks, still some opportunities are waiting for FinTech industries to tap and enhance their business fortune. With the given pandemic, customers have closer to use digital financial services for fast-tracking financial transactions. Moreover, banks are collaborating with FinTech firms to offer better digital banking solutions to their customers. Besides, they are also encouraging people to opt for cashless payments or transactions to protect them from contaminated cash transactions at the banks or other financial institutions. 3. Weak Investment Climate Resulting in Low Funding Before the pandemic, global funding for various FinTech enterprises and startups was at a record level. But now, most of the investors are wary of funding FinTech companies due to an increase in economic instability. Result? Many companies become bankrupt within a few months of the beginning of the pandemic. Moreover, some even sold out their business to pay their debt. With such severe consequences, many FinTech companies move towards less risky ventures so to sustain their growth with no chance of positive cash flows. Such low funding even prompted many enterprises to tighten their lending standards to ward off loans to small companies. It has a disastrous impact on the economy as the stock market crashed, and various entrepreneurs have now come to the ground. To overcome the shortage of funding and to create a favorable investment environment, many companies are now restricting funding to those FinTech enterprises that have strong business returns and are more established in their respective region. Even bigger companies such as Google have created a strong investment pool of $200 million to support FinTech institutions to helps small companies well. Due to them, the confidence among the investors to invest more in FinTech enterprises has increased manifold. Besides, it has made them bold enough to expand their business in new areas. 4. Challenge in Preserving the Human Touch Due to the coronavirus crisis, there has been a significant impact on the personal relationship of FinTech companies with their customers severely. Despite having an opportunity to showcase digital features of their FinTech software solution, lack of personal touch is hindering the creation of loyalty among the customers. These are uncertain times where people are more concerned about their jobs resulting in a far greater capital crunch. In such a scenario, what the people want is a personal interaction with their financial advisors. But, it is the fact that with digital technology, the human touch is obsolete that renders customers in agony. How to overcome it? The simple answer is opting for organizing video seminars, sending personal messages, and even doing check-in calls to remain in touch with the customers. Moreover, many companies are using Robo-advisors to offer advisory options to their customers online, thus maintaining a personal relation with them easily. 5. Challenges Arising due to Compliance & Regulation Disasters FinTech companies come under sensitive service provider that requires regular surveillance (like legal obligations compliances and regular requirements, etc.) from government body such as General Data Protection Regulation (GDPR) for protecting the consumer’s interest. The finance research proceedings have already shown that more than 60% of FinTechs finding it harder to pass GPDR norms and guidelines. What does it reveal? It signifies that during a pandemic, meeting regulatory expectations is becoming a headache for FinTech sectors as not tuning with them will lead to fines and penalties. Though FinTech companies are aloof from a technical point of view, they are at backfoot when implementing regulatory practices. In contrast to it, the traditional banking system comes with streamlined regulatory procedures that make them more suitable to do business when compared with digital FinTech solutions. How to mitigate such a challenge? The answer is that the onus lies on relaxing some rules by the regulatory bodies. One such body, FCA (Financial Conduct Authority), has relaxed some of its rules like easing requirements for financial reporting and extending financial report submission deadlines much to the delight of financial companies. Wrapping Up Though the current pandemic has made FinTech companies come closer to their customers, yet they are facing some challenges that might hinder their growth. Admirably, these challenges cannot deter the rising of FinTechs across the markets, even in such challenging times. With the COVID-19 pandemic not going away sooner, FinTech companies will give priority to digitize their business operations. What’s more, they are ready to offer great FinTech solutions to replace the traditional way of conducting financial business successfully.

Originally published at- https://medium.com/emorphis-technologies/fintech-app-development-challenges-for-fintech-companies-in-the-pandemic-2c33280f6551