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In 2020, the use of financial technology in Europe increased by 72 percent, accompanied by massive Fintech investments. However, such an improvement may result in unintended consequences, the most serious of which are new security concerns.
Fremont, CA: Fintech has brought about significant change in recent years, disrupting many business verticals, particularly the financial industry. It has improved many aspects of finance, including lending, payment processing, insurance, and others. This switch has led to a seamless and one-of-a-kind experience for users, allowing them to easily understand and embrace fintech.
However, the majority of customers continue to prefer more traditional financial institutions. fintech, while undergoing a technological revolution, faces some issues and challenges. Some of the more serious issues are a lack of trust, a lack of transparency, security breaches, and certain customer habits. In this article, let us look at these issues in-depth and try to figure out how to solve them.
Given are major challenges facing the fintech industry in 2021
In 2020, the use of financial technology in Europe increased by 72 percent, accompanied by massive fintech investments. However, such an improvement may result in unintended consequences, the most serious of which are new security concerns. Cybercrime is on the rise, with a new attack being launched every 39 seconds. Regrettably, fintech firms are one of the most common targets for hackers.
It should come as no surprise that as people rely more and more on digital money, fintech companies now have more valuable data to protect than ever before. As a result, even large reputable institutions like national credit bureaus and leading Forex brokers may experience data leaks. That was the case with Pepperstone, a leading Australian brokerage whose customer data was compromised in August 2020.
Using Modern Technologies
According to a survey conducted in 2019, more than half of financial services CIOs believe that most businesses will operate through digital channels and also that digital initiatives will generate more revenue and value, highlighting the importance of fintech trends in the future.
Organizations that use outdated business management applications or disparate systems, on the other hand, will be unable to keep up with a world that is increasingly focused on digital technologies.
In other words, digital transformation isn't just a good idea; it's a necessity.
Cloud computing, big data, artificial intelligence, and machine learning are just a few of the technologies that can help businesses cut costs. At the same time, they increase customer satisfaction and wallet share. However, the initial transition to such technology incurs additional costs and risks.
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