Fintech companies are gaining more and more prominence. With the help of their cutting-edge solutions related to data storage as well as computing, they are producing more and more innovative products. They are revolutionizing the entire financial services sector. As a result, whether it comes to the robotic advisors or artificial intelligence or digital banking on the blockchain, they are dominating each and every field.
Ever since Fintech companies have become more famous, the big finance and banking companies have no other option but to tie up with them or use their products. With the help of their products, they offer better efficiency to the clients as well as better cost savings as well. As a result, it is becoming necessary for the major companies to tie up with them. However, this does not mean that they do not face any risk at all.
Risk faced by the Fintech companies:
There are quite a few risks which are faced by the Fintech companies as well. It is important to reduce those risks. Only when the Fintech companies are able to face those risks, they will be able to rise and they will be able to get new clients.
Credibility is one of the main issues which such companies are facing as well. Only when their reputation is stellar, most of the big finance and banking companies will be entertaining them.
Regulation is another risk which they are facing. For the Fintech companies, newer regulation is actually difficult to handle. Since they are constantly innovating, regulation can actually dampen their innovation. This is the reason why it needs to be tackled in advance as well. It is also up to the authorities to encourage innovation rather than to discourage innovation by introducing newer and newer regulations. As a result, it is important for the Fintech companies to opt for proper legal advice as well.
Another risk to the Fintech companies is that most of their systems are online. Therefore, there is always hacking risk involved as well. Only when they are able to tackle the service, they will be able to pitch their products in front of the prospective customers.
Thus, for the Fintech companies as well, there are quite a few do’s which are involved. Only once they are able to face these risks, they can go ahead and pitch their products to their customers. Up until that point of time, it will become very difficult for them to actually gain more business. Also, authorities need to provide them with the proper environment so that they are able to easily eliminate those risks. Keywords: fintech risks to banks, fintech risk assessment, fintech risk and compliance,credit risk fintech, fintech regulation, operational risk fintech, fintech regulatory issues, fintech pdf