Fintech industry challenges: The issues and answers

How Fintech Businesses are acquiring customers more easily whilst concurrently reducing fraud.

For today’s digital-first consumer, quick, secure, and personalised mobile marketing solutions are top of the list. The result has been a boom in financial technology (fintech) firms that are now common-place in the market and offering a range of mobile (digital) financial solutions.

However, difficulties have grown in overcoming obstacles that prevent the delivery of seamless mobile services. Here, we discuss some of the typical fintech issues that businesses are currently facing and how the appropriate digital-first technology may provide a better customer experience.

Fintech issues to be tackled

Fintechs are renowned for providing quick, secure solutions for routine banking tasks. However, as the world becomes more mobile due to global events, consumers are seeking for even faster, more secure options, and businesses are finding it difficult to keep up.

As a result, fintechs working to provide the best conversational banking experience continue to run across operational and security issues, such as:

  • How can you make onboarding as quick and simple as possible after user acquisition?
  • How can you guarantee that doing your banking online is a simple process rather than a frustrating one?
  • Costs: Will there be an increase in expenses if your security is upgraded?
  • How can you stop hackers from accessing accounts or devices? Fraud and account takeover.

However, speed and transaction volume are more important indicators of fintech success than income. Additionally, due to the hurdle of being heavily regulated, fintechs hoping to advance must have effective authentication procedures in place if they want to boost conversion rates and cut costs.

The hardest element for most fintech companies is integrating increased security without negatively affecting the user experience, which is one of their main advantages over traditional banks.

Solutions to common fintech issues

Most of these fintech issues might be resolved with the appropriate digital-first technologies.

Most of the client difficulties we listed above can be simplified with the help of these quick, covert solutions, which prioritise fraud protection and keep costs down. This is how:

1. Higher user acquisition

Business Insider estimates that in 2020, 63% of European consumers will have given up on the process of installing a digital banking app. Consumers’ shift to digital solutions as a result of the pandemic is mostly to blame for this 25% rise compared to 2019, yet online banking technology is still lagging behind customers’ expectations.

You may assist your clients have an uninterrupted onboarding experience by using silent mobile verification. Silent mobile verification authenticates your app users in less than 5 seconds without requiring further action, as opposed to waiting for an email or SMS to arrive with a 5-digit number.

However, since the worst-case situation is that your consumer doesn’t finish the transaction at all, SMS is still a viable failover alternative. But by making the onboarding process for app users shorter, you give them less time to drop the app, which increases the likelihood that they’ll become a devoted customer.

2.Improved customer experience

The customer experience is a crucial competitive advantage for fintechs over traditional banks. With the value proposition of enabling customers to do standard banking transactions in the palm of their hands rather than going to a branch or calling a contact centre, fintechs entered the industry.

However, the danger of sacrificing your customer experience increases as you add additional levels of security to your customer journey. Customers don’t want to use your app, check their SMS, and then return to it to enter a confirmation code. All customers have to do is open your app, sign in, and wait a short while (less than 5 seconds, to be precise) before continuing to finish their transaction because silent mobile verification takes care of this for them.

3. Prevention of fraud and account takeover

No matter what security measures you have put in place, it appears like hackers are constantly coming up with new ways to break the code. According to the US Federal Bureau of Investigation, SIM switching assaults cost Americans more than $68 million in 2021.

SIM Swap checks, on the other hand, aid in the verification of transactions when money is transferred to a new account, when the transaction amount is more than usual, or when a new device is discovered. In this situation, the transaction will be rejected if it is determined that a SIM has been switched.

To avoid fraud and account takeover, check with the mobile network operator for the following important account details:

  • Date of activation of the SIM card
  • If unconditional call forward is on or deactivated
  • The phone number has been assigned to a new user
  • The phone has been reported missing or stolen
  • When was the SIM card last replaced?

4. Lower expenses

The fact that fraud protection is a high priority for fintech companies is why security solution vendors charge so much for their products. However, there aren’t many additional setup fees or continuing expenses because SIM switch checks and silent mobile verification rely on already-existing data and technology.

Silent mobile verification verifies a user’s details with the mobile network operator (MNO) when they sign into their account. The user is logged into their account if the MNO verifies that the information fits. It takes less than five seconds to finish and doesn’t involve any other forms of identification, such usernames or passwords.

In the long term, setting up quick, silent user authentication reduces costs associated with client acquisition, human security intervention, and financial loss due to fraud.

Fix typical financial issues with Mobile Identity

In today’s digital environment, it is crucial to prioritise user authentication and financial app security. Adding security layers without sacrificing customer experience might become a competitive advantage as cybercrime increases.

Sim swap checks and silent mobile verification are two strategies that help stop typical fraudulent operations. As our technology provider, Infobip’s Mobile Identity feature is designed to assist you in resolving common fintech issues and seizing new opportunities. It was built on the foundation of collaborating with more than 300 banks and financial institutions and being connected to more than 700 mobile network operators.

 

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