Finance technology is definitely not an easy field to either cover or understand. Mainly because every piece of innovation applied to finance scares the “big players” and also given the fact that the actual implementation of such tools within the field is extremely delicate, every minor detail should be considered when it comes to analysing this rapidly evolving yet extremely complex field. With this in mind, let’s try to break down why the fintech industry is committing these 5 major errors.
Number One: Cloud-Based Rejection
When it comes to fintech apps or software, there is an extreme refusal for what concerns cloud-based apps. This is, generally, related to the fact that cloud-based applications are still associated with data leaks and breaches. By all means, this is still possible, but so is drop-hacking via web into solid state hard drives. The point, generally, is: if some hacker wants your data, then he can definitely get them. It’s extremely simple to understand and therefore having cloud-based data won’t be much different from having it physically stored.
Number Two: An Overall Antique Approach
In order to better understand the fintech sector, we should analyse how many companies are actively developing tools, infrastructures and software. It’s easy to extrapolate the fact that this matter is very much startup-related and, with this, there’s a defined business structure normally associated to the matter: a startup won’t definitely be able to provide a mass of dedicated tools to thousands of clients and, generally, the maintenance side of things will definitely be blocked by the company’s dimensions. With this in mind, it will be quite easy to understand how this will block the implementation of such “risky” (from an architectural point of view) tools within major players’ companies like banks, for example. Therefore, the overall fintech realm is stagnating to his oldest roots.
Number Three: Costs
Fintech tools aren’t cheap and, therefore, are not related to every single financial company worldwide. With an average cost of $20k p/tool, it’s safe to say that fintech software are probably the most expensive ones within the whole technology development field. It’s almost impossible to lower down such costs since the requirements for what concerns the development side of things is definitely extremely high.
Number Four: Loans
Since 2015, we’ve seen a net increase in financial applications approaching the fintech realm. A massive example would be related to Paypal Finance, but this also applies to open bridging loans and everything in between. It’s quite easy to understand how this sector is moving towards a far more technologically advanced approach, but at the same time, this generated a far higher request in terms of warranties and credit checks, given the fact that they’re now (if done with such tools) completely automated.
Number Five: The Investors
Fintech as a whole is at an extremely embryonic stage. This is definitely related to the fact that many fintech-based tools have to adapt to old setups and mostly because the technology hasn’t reached the right speed yet. With this in mind, there are tons of investors who think that fintech as a whole has reached a futuristic level in which everything is perfectly working and every tool can be easily tailored onto their projections and architecture.