Did you know that fintech makes it possible to conduct most of the tools and actions used to handle online transactions? From shopping to lending and more, fintech solutions like data encryption, biometric scanning, and blockchain computing are helping to prevent cyber security risk in 2021.
However, these innovative technologies don't come without their fair share of pitfalls. Take a look at some of the most common challenges lenders, banks, retailers, and financial institutions are experiencing in the current tech sphere.
Cyber security is one of the most, if not THE most, critical aspects of the online economy. As cyber attackers get smarter and smarter, financial institutions and tech service providers are using artificial intelligence to keep up.
Not only can AI help software identify potential threats, it can study each event's behavior to ensure that these threats don't repeat themselves.
Systems that use artificial intelligence are able to apply the benefits of machine learning toward communication networks, websites, and other digital activity.
Many financial organizations use fintech solutions to accurately and easily automate recurring payments. This service provides a high amount of convenience and transparency for consumers and brands alike, but it has caused some tension during the ongoing economic downturn.
Many consumers have been struggling with bills, rent payments, and fluctuations in employment and/or income. But, one of the outcomes of using efficient data management methods like blockchain technology is the creation of redundancies.
For general consumers, recurring payments can be problematic when a sudden shift in economic circumstances occurs.
Those who are actively managing auto title loans, car payments, or other expenses can risk forgetting to cancel a recurring payment before the funds are withdrawn. If that money is necessary for a high-priority expense, this can cause a snowball effect.
With the growth of smart home technology and wearables that are always listening, younger consumers have become increasingly dependent on voice-based technology. Consequently, voice payments have grown in popularity - especially during the COVID-19 pandemic.
This feature is a convenient way to streamline banking and budgeting processes, but it can open financial systems up for online security risk.
Eliminating the multiple lines of verification present in standard internet transactions can make it easy for people to get a hold of a consumer's credit card - or their favorite online marketplace account. The possibilities are endless, and cyber criminals in fintech are already infiltrating this growing technology.
Voice-enabled payments and digital commands continue to be a controversial feature that is creating negative and positive buzz in the industry.
Staff and Salary Cuts
Fintech is one of the driving forces behind automation and streamlining financial transactions in the modern marketplace. But, reducing redundancies often leads to a reduction in the need for staff.
Employees can experience cuts in theri salaries or even weekly scheduled hours as a result, which can be detrimental to companies who rely on retention and low turnover.
Additionally, getting rid of jobs can have an impact on the economy as a whole. When it comes to task automation, business owners have to decide between operating as usual or reducing costs - and the amount of staff they have on hand.
Fintech is one of the most important and influential technologies on the commercial market today, and it helps us to do everything we do online with the highest level of cybersecurity and threat management. Additionally, it's driving growth and innovation across the financial services, banking, technology, consumer goods, and even marketing industries.
But, it's important to understand its limitations and possible consequences before initiating any fintech program into your organization. These are the top problems to avoid, or be aware of, when using fintech online.