As blockchain financial technology is comparatively new, there are limited blockchain experts on the market. To develop and sustain a blockchain-based system, organizations will need to find, hire, and keep their own blockchain development team.
FREMONT, CA: Although FinTech is bound for success, specialists admit there are impediments to reaching its full potential — for instance, government restrictions and safety concerns. Nevertheless, these are not the only hurdles before the owners of FinTech banking applications and other FinTech software. Below are a few challenges.
Security Issues and Lack of Trust
Security is by far the main concern for mobile banking, payment applications, and FinTech in general. Conventional banks have security guards, vaults, cameras, and heavy bulletproof doors to keep their assets safe. When it comes to virtual protection, things get more rigid: vulnerabilities are much more discreet. They have potentially more effect on users, as their money is at stake and their personal data.
Big Data and Artificial Intelligence (AI) Integration
According to a survey, 82% of U.S. bankers and 79% of bankers worldwide believe that AI will transform the way banks gather data and interact with customers. Big data and AI are two necessary technologies for any new banking software. Big data permits businesses to collect and organize information about a user, from their name, social status, and family members to financial behavior, in-app activity, and habits.
All this data is vital to a bank, particularly when it comes to credit ratings and providing other high-risk banking services. Coupled with big data, AI can help businesses automatically detect fraud, perform a risk analysis, and administer transactions efficiently. Still, these technologies are challenging to implement as they need exceptional engineering skills and constant maintenance.
Blockchain Integration
Many FinTech applications are built on the blockchain. Some believe that the blockchain has not lived up to its prospects, while others are certain it is the future of all data exchange on the internet. With blockchain technology, firms can make the FinTech software more trustworthy, as it facilitates tracking all stages of the transaction and prevent any changes to it so that they can always see what has happened to the money. However, integrating a blockchain is a challenge for many financial institutions. Because blockchain financial technology is comparatively new, there are limited blockchain experts on the market. To develop and sustain a blockchain-based system, organizations will need to find, hire, and keep their own blockchain development team.
Compliance With Government Regulations
Finance is one of the most structured sectors. Government regulations will be the concern even if a firm has more traditional FinTech software that does not use a blockchain and other yet-to-be-proven technologies.
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