Organizations providing financial services exist in an ever-evolving and highly competitive environment. Aside from that, they also face a wide array of challenges created by factors like the changing consumer demand, national and global regulations, tech innovation, and beyond.
In this overview, we’ll take a closer look at the five main challenges currently faced by banks, payment service providers, and financial institutions and uncover effective ways of overcoming them.
Below is the list of the biggest difficulties organizations in the financial sector deal with on a regular basis:
While the fact that FinTech is developing fast and an increasing number of users is becoming digital-savvy is a great thing, it’s also one of the biggest challenges for financial service providers.
This is due to the fact that the majority of consumers shift their payment preferences to online methods and expect state-of-the-art and faultless experiences. However, many financial institutions don’t have the resources to update their software and hardware timely, which results in a poor user experience and loss of profits.
Financial technology is advancing at an unprecedented speed, and so does the intricacy of fraudulent activity. With data breaches becoming more and more common, it’s safe to say that cyber fraud is one of the biggest challenges banks and PSPs are dealing with nowadays. This is especially true, taking into account that virtual threats jeopardize not only the people’s funds but also their sensitive payment information.
Stay up-to-date with the latest news in the cyber security sphere and implement the latest protection measures, such as:
The financial sector is one of the most strictly regulated ones out there, so the banks, financial institutions, and PSPs have to comply with a lot of governmental rules. This can be a challenge for organizations, as the regulations get updated continuously, and it can be overwhelming to keep track of all the latest versions. Besides, compliance with the guidelines can be time-consuming and require a lot of resources.
Ensure that the software you are using is compliant with the regulations and policies in force. Remember that timely action is key to avoiding unwanted fees and penalties. Outsourcing legal consultants can be helpful, especially if you are a new player in the financial market.
Dealing with local regulations can be tough, so imagine the challenges encountered by PSPs and banks processing cross-border transactions. This is mainly due to such factors as:
Thus, cross-border money transfers often turn out to be slow and costly.
Trying to accommodate the needs of every single user with one financial solution will lead to general dissatisfaction since the services that are essential for one person can be unnecessary for the other.
Hence, a modern payment experience is unimaginable without the possibility of service personalization. For instance, it’s extremely important for banks to provide their clients with the information they require, exactly when they need it, and through the channels they prefer, in order to meet their individual expectations.
This is often challenging to execute, as it requires a clear understanding of your audience, its expectations, preferences, and behavior.
Knowing the main difficulties that banks, financial institutions, and PSPs face makes it possible to be prepared and overcome them efficiently. Are you ready to embark on the rocky journey of tackling the challenges mentioned above on your own? Keep in mind that it will be time-consuming and require a lot of resources.
Luckily, there’s another way to deal with this - to partner with Payneteasy, the leading payment platform provider. We offer tailor-made solutions that match all the legal requirements, customer preferences, security standards, and global guidelines to deliver the best possible experience to both you and your audience.
Share your project details with us now, and let us do all the hard work while you focus on expanding your business in the financial sector!