Fintech companies are on a path of enhancing their growth and building a reputation in the industry. Financial technology is improving and automating the process and services within organizations. However, these challenges push our imagination in new ways and encourage unparalleled growth. Still, there’s room for improvement with a few challenges they come face to face during the course of transformation and adaptation.
Challenges the Indian Fintech Sector Faces
Regulatory and Compliance Laws
Compliance laws act as massive barriers for new Fintech entrants. There is an extensive list of formalities that Fintech start-ups need to fulfil before they even start operations.
Unbanked and Under-banked Population
To begin with, Fintechs had staggered growth because of poor infrastructures like low internet penetration and literacy levels in India, especially in remote and rural areas.
Trust in Cash
Due to financial illiteracy, several Indians fail to see the utility that Fintechs offer through their innovative products and service.
Cyberthreats
The technology that offers convenience also opens up people’s online accounts to fraudsters looking to steal their assets. As a result, Fintechs need to fortify themselves against any challenge posed by hackers.
Industry-Related Complexities
Fintechs are designed to work with a sophisticated working model. This makes it difficult for them to maintain a smooth relationship with other financial institutions like banks. But on the other hand, banks fear working with Fintechs and risking reputation loss.
Thanks to the robust structure, Fintechs enjoy a unique, seamless loan management system that allows all stakeholders to examine customer data and make more informed decisions during lending. Moreover, with the help of brilliant analytical capabilities, like credit analytics, bank statement analysis, and GST analytics, borrowing has become a high-profiteering business for Fintechs.