Fintech has significantly impacted the global Financial Services industry over the last decade. More fintech use cases-led businesses are developing, and more investors are backing these businesses. It is anticipated regulators will continue pushing the digital agenda.
Following technology trends are shaping the fintech industry so far :
- Innovation is happening in wealth tech to serve a new class of investors; new asset classes, NFTs, and Cryptos will continue to drive more investor interest.
- Due to the adoption of ISO20022 financial messaging standards, more regulation technology solutions are coming up in the market to streamline processes and reduce costs.
- Buy Now Pay Later has become mainstream and is on an accelerated growth trajectory, emerging strong not only in B2C but also B2B payments space.
- With the advancement of blockchain technology in financial services and the growing adoption of cryptocurrencies, Governments are taking initiatives for Central Bank Digital Currency (CBDC)
- New technologies are simplifying writing and underwriting life insurance policies
- Digital Banks and Open Banking (Open APIs) are enhancing customer experience, reducing costs, and providing more value to customers.
Future of Fintech Product Engineering
Fintech platforms can expect future technology breakthroughs to propel the expansion of the market even further and revolutionize the manufacturing, delivery, and consumption of financial products and services in the coming years
- Fintechs are becoming a replacement for many proprietary legacy systems. More co-development and joint ventures are expected in multiple sectors and industries where there are some historical inefficiencies and expenses. Fintech platforms are lowering the cost of sale in back-office solutions and ancillary services to non-traditional financial services participants.
- Due to emerging technology, changing cultural trends, and a favorable regulatory landscape, fintech has been growing beyond boundaries. Fintech has become a horizontal across industries such as Retail, Health, Agri, Real estate, etc.
- industry leaders will continue to acquire crucial proprietary tech companies, blurring industry lines and cutting costs.
- Smaller companies are realizing the power of joining together. By working together, fintech product companies can offer more of the consumer life cycle with relevant products and services.
- Regulators are actively encouraging innovation through regulatory sandboxes, new distribution models, and the launch of innovative products.
Current Challenges of Fintech Product Companies
Fintech companies, which use cutting-edge, innovative technology to improve and automate financial services, have faced several challenges in the current economic climate.
The Pandemic Effect
One of the primary fintech industry challenges is the uncertainty caused by the Covid-19 pandemic. In addition, the sudden and severe economic downturn has led to declining consumer spending and increased uncertainty for businesses, making it difficult for fintech companies to predict and plan for future growth and ventures.
Regulatory Challenges
Another challenge for fintech companies is the increased regulatory scrutiny. As these companies become more mainstream and disrupt traditional financial institutions, regulators have begun to look closer at their operations to ensure they comply with fintech laws and regulations. These stringent regulation and compliance requirements can lead to added costs and delays for fintech companies, making it difficult to compete with established financial institutions
Market Saturation
Fintech product companies also face intense competition from traditional financial institutions, which have embarked on a similar path by adopting similar technologies and business models to stay competitive, including a higher focus on custom fintech software development. As a result, it is making it difficult for fintech companies to differentiate themselves in the crowded fintech market to attract and acquire customers.
Cyber Security
Additionally, fintech companies also face challenges related to cybersecurity and data privacy. They are at a higher risk of cyber-attacks and data breaches as they collect and store sensitive financial data. Such adversaries can lead to reputational damage, legal liabilities, and financial losses if they fail to protect their customers’ data.
Despite these challenges, many fintech companies have been able to adapt and continue to grow. Some have taken advantage of the increased demand for digital financial services during the pandemic, while others have shifted their focus to digital payments and lending.
However, for fintech product companies to succeed in the current economic climate, they must be able to navigate these challenges and find ways to stay competitive.
Unlock Your Company’s Potential with Techwave’s Product and Platform Engineering Expertise
Techwave helps fintech companies use cutting-edge, innovative technologies and adopt low-code/no-code platforms to improve financial products and services or fintech applications with a platform-centric approach.
An added advantage is Techwave’s expertise in Cloud Native technologies, Cybersecurity, ISO 20022 standards, Payments, Wealth Management, Banking, Healthcare, Retail, and the ERP domain.
Techwave Product and Platform Engineering services include:
- Accelerate product development through co-development
- Product implementation and improve on-time delivery of the projects to the clients
- Product integration with surrounding systems for regulatory compliance, partners, and clients
- Product L1/L2 support and maintenance
Techwave is committed to helping businesses of all sizes simplify their journey, achieve their goals, and drive growth. So if you are looking to take your business to the next level, look no further than Techwave for all your product and platform engineering needs.