How FinTech entrepreneurs in the US are creating awareness on financial products and minimizing risks and fraud?
This is over the third era of FinTech innovation, which turned out of the result from the 2008 global financial crunch and the appearance of the smartphone. With the records of investment flowing into the FinTech sector again, this innovative journey does not show any signs of slowing. However, in the last few years, it has spun the wheel and began to splatter in some exciting new paths.
As the financial sector across the world is growing, it has also faced significant hurdles from non-performing assets, cyber threats, money laundering, etc. The lack of financial awareness among the working population of youngsters is another important matter of concern. They believe that investing is a complex process meant for finance expert.
There is only one solution to these problems. That is technology. In today’s world, technology plays a vital role in the financial sector right from mobile banking, cybersecurity solutions, to online investment platforms, everything is based on technology.
The alliance of digital technology and financial services has given rise interesting new developments in the financial sector. There is a birth of an entirely new industry vertical which is called the FinTech industry. The startups operating in this sector are extending and allowing a scale of innovative solutions which are fundamentally impacting our lives by enhancing the versatility and scope of managing financial transactions.
Technology has stimulated the expansion of financial services to the underserved and unbanked masses. It is also one of the principal reasons why the FinTech sector has grown from $7.3 billion in 2014-15 to $14.5 billion in 2015-16. The FinTech industry still continues to rise at a tremendous rate. However, the industry and its accelerated growth presently face a major challenge called cybersecurity.
FinTech entrepreneurs are using innovative technology to improve and solve the two of the most prevalent obstacles in the FinTech sector namely money laundering and investment awareness.
Even though the brokers have adopted the high-end trading systems, the backend systems were disbanded. There was no centralization. However, the end-investor was completely dependent on the sub-broker service levels. In order to make investing transparent for investors, it was crucial to have powerful docile operations and risk management through robust systems.
The entrepreneurs in the FinTech industry in the US had a focus on producing and developing systems to facilitate broking industry operations, risk management, and agreement. The FinTech startups came up with the idea of offering quality compliance, risk management, and automation services for their clients.
The Fintech industry was aware of the financial meltdowns which the investors had faced due to heavy losses because of scams.
There were no customized products which could help the brokers track market manipulation and money laundering transactions. The products which existed were either too preliminary or the broking industry was forced with the bank-based systems. To minimize such risks, the entrepreneurs in the US came up with a customized system that disrupted the whole industry. This system provided a set of effective tools that efficiently reduced such risks.
The clients who use finance products were assured about their safety as the system facilitated productive client screening and prioritized alerts over various situations of market manipulation and money laundering patterns.
The technology landscape across the world has changed in the last decade. The digital disruption is making financial markets more transparent, convenient, comprehensive and valuable. Besides, the regulators can obtain a more realistic understanding of the risks. The FinTech startups believe in a technology-driven strategy to compete with their global counterparts. They are continuously working on improving their tech stack. The FinTech entrepreneurs in the US intend to transition their prevailing system to an AI-powered irregularity detection system. They also wish to move the backend of a few products from on-premises to the cloud.
In order to speed up client result delivery, the FinTech startups are exploring with a few in-memory OLAP (online analytical processing) databases. The US-based entrepreneurs believe that educating the new generations about the surveillance and AML risk management is essential. At the same time, getting them to learn that it is not just a regulatory obligation, but an indispensable part of business risk management and investor safety.
Discipline is a vital factor in managing your finance. As there are a lot of products available in the market, it becomes difficult to check which one is suitable depending on the investor’s prevailing situation. This helps to educate the clients regarding various ways to invest and create a proper financial plan for them.
Money is not the sole focus for a business. There are several other parts that are involved and need to fall into place. Focus on the customer is important rather than just thinking about money. If your customer is happy, you can get more and more references. However, if you ignore the customer, your startup might not work even for two years. Taking proper care of the FinTech startup in order to make it thrive is very important.
According to a study, more than 90 percent of any business spreads through word of mouth. Just proving a financial product is not enough, providing a service is important for your customers to make better financial decisions.
At present, there are very few FinTech apps and startups that have appropriately invested in developing their cybersecurity frameworks. These frameworks ensure safer and more reliable digital payments for customers. Many startups in the FinTech sector do not opt for lobbying servers, monitoring systems, or back-up systems. But adopting these measures are recommended to minimize the risks of a data breach and decreasing the impact in case one does occur.
Cost of developing a FinTech app for your startup
» Coruscate can help you in developing the apps that are safe and secure for your clients. Learn more about our Fintech App Development solution here.
» Here is the table showing the cost of development of FinTech apps with basic features.
If you are a startup and are interested to know more about the business models and the features that can be included in your customized FinTech app, do not hesitate to connect with us to reserve a free consultation session.