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Competitiveness is a key part of development in the field of digital technology, which includes the continuous improvement of existing processes. One of the main niches where this is relevant is fintech. By 2024, small companies and giant banks are actively implementing AI elements for processing operations. This is related to the rapid growth of artificial intelligence and the broad possibilities for adaptation to the needs in specific business domains. The goal of companies in the financial sector is to support the loyalty of existing customers and attract a new audience, including intercepting them from competitors. So, what are the main challenges awaiting the financial sector in 2025?
The financial sector concentrates the majority of finances, making this niche attractive to hackers (black hats). If a company is slack in taking the protection against the data leaks into the Darknet, the risk of theft of financial resources by a significant percentage is very high. According to Cybersecurity Ventures, the worldwide losses from cybercrime are projected to increase to $10.5 trillion annually by 2025. Large databases, weak security, and inadequate levels of cybersecurity, also human error, among other things are like the major factors that make it easy for hackers to infringe the system.
Cyber Threats to the Fintech:
In 2017, Equifax, the central spot in the credit standings industry, was a victim of a rollover in a data breach of the largest magnitude ever recorded. One of the outcomes was the personal data that leaked, which led to the breakup of 143 million accounts in the U.S. in which 200,000 credit card numbers got stolen, so the matter got more critical than ever before.
Key Details:The hackers used a bug vulnerability on the web portal of the company, which was still existing for more than a couple of months. Besides the encryption certificate issue, the company’s inaction was an additional factor that worsened the situation.
The takeaways from cases like the Equifax data breach underline the significance of security measures for financial companies to maintain their business. In 2025, the company's data will be protected through timely system updates, ongoing training for employees, as well as the implementation of multi-factor authentication, which will be the factors that guarantee the protection of the company’s data and its reputation.
Security and trustworthiness are crucial factors in the success of fintech institutions. Getting the initial audience fighting against the traditional banks that are well established through the ages could be the hardest goal. Although a survey of EY’s Global FinTech Adoption Index 2019 found that globally about 64% of consumers use fintech, the issues of inclusiveness, globalization, and the phenomenon of age still raise constraints to the fintech industry. The main issues that the fintech companies are facing are how to balance innovation, safety of personal data and customer trust. In order to bring in new users or to keep them in their ecosystem, companies invest their marketing, functionality development, and software very much. By the adoption of cutting-edge technology, companies can keep up with the drastic changes that are being observed globally and, consequently, are crucial to market share increase in a competitive arena shifting very fast.
Rapid modifications in the market can be coped up with the integration of new technologies and adaptation to them are strategies that the finance industry makes use of to succeed. Right from the word go, during the construction and development phase of the software, companies should design the system with the feature of easy institution of new platform, the usage of the current programming languages, and enabling the changing of the product as and when required.
From a study by Deloitte it is established that the clients prefer digital channels and especially online and mobile when banks guarantee a tight security system and quick real-time conflict resolution, allow regular processing of banking operations and do not require customers to make trips to the bank to deposit cash or request for customer service. The modern user is searching for new technologies and trends that will be used with these services.
A recent Galileo Financial study indicates that nearly nine out of ten consumers are happy with their chief financial institution services. But they also deal with almost as many other providers of financial services. This signifies a level of competition that is very high in this market.
According to Derek White, CEO of Galileo, financial institutions will need to create a digital, intelligent, and ultimately autonomous mode of operating to stay ahead and engage the consumers. The banks losing their regular customers to competitors who have adapted to novel consumer preferences is one of the most critical factors.
Among others, financial institutions come across various hurdles in the age of fast technological progress. Such important factors as data protection, adapta-tion to new consumer requirements, and quick integration of the latest solu-tions will define the 2025 success of finance companies. The companies in the financial industry should choose the partners who can give them a guarantee of flexibility and protection for their solutions.
Lab42 is powered by fintech and customizes products with the promise of achieving its goals and saving your operational costs. You may read more about our background in the fintech domain here: https://lab42.dev/why_choose_us/business_domain_in_the_fintech_sector
