Regulation Technology

For many years, Fintech has been invisible from the scrutinizing eyes of governments. But that is about to change as regulators are pushing steps to make the industry more transparent with the help of Regulation Technology.

Regulation Technology or RegTech is a compliance measure that manages regulatory processes within the financial industry using a mix of IT, AI, and Big Data. On the outset of fintech, there has been a rise in money laundering, identity theft, and other types of cyberattacks. Regtech is seeking to combat these by implementing tools that will automatically monitor online transactions in real time basis to mitigate irregularities that might arise.

Data Privacy and Cybersecurity

Data Privacy and cybersecurity are two factors that contribute to why regulators are pushing for stringent compliance protocols in fintech. Above all else, the sensitive consumer and corporate financial data are to be protected the most. But as many entities get connected, the cyber threats in fintech become more vivid that hampers true financial innovation.

For this reason, fintech companies are now adopting the best practices in cybersecurity. Many are now switching to cloud technology for an agile business model and swift banking process. Using cloud technology and cloud computing, fintech companies are given an avenue to manage user data in a secure and trusted infrastructure.

ICO Frauds

We are no strangers to ICO frauds. Due to the anonymous nature of cryptocurrency, it is susceptible to frauds that can cost millions of dollars. Time and time again, we hear news about cryptocurrency scams and the common reason why people fall for it is its quick return on investment. Some scammers create intensive publicity to gain investments on ICOs that fraudsters already own. Some people use ICO for money laundering, while others are using a pyramiding tactic to encourage more investors before they go untraced.

Due to the illicit activities involving cryptocurrency, some countries have already warned about joining ICOs if not banning it at all. If you are interested in participating in ICOs, here’s an ultimate cryptocurrency guide to getting you started.

Innovation and User Experience

User experience drives innovation and that is true in banking and the financial industry in general. Now more than ever, traditional banks must be able to step up and harness the potential of technology in their business. Even in the digital era, many people are still either unbanked or underbanked; the same segment that has the highest share in the use of mobile devices. This is where alternative financial providers find their opportunity.

The widespread use of mobile devices even in the most impoverished corner of the world has allowed neo-banks to flourish. With user experience in mind, neo-banks and fintech startups have utilized mobile devices to bring financial services closer to people through mobile payment apps, P2P lending, and other innovative means. People switching to banking alternatives is the greatest threat to incumbent institutions. Unless they follow the new paradigm set by fintech, century-old entities will remain at the brink of obsolescence.