Tech startups are popping up everywhere in our lives at an increasing pace; the financial industry is no exception. Millennials are at the forefront of transforming the financial technology (fintech) industry. Fintech is a rapidly growing field, as startups insert their products in between you and the big banks. The diversified choice of services has taken a sizable bite out of traditional bank commerce, leaving the big banks in the dust.

Let’s be honest, it’s hard finding that many people willing to shed a tear for big banks. Confidence in banks is at an all-time low, in the wake of crisis after crisis, and hack after hack. Banks have proven to be inefficient and inflexible in dealing with the online environment, their fixed costs are high and bite into every transaction you make, and people generally see them as the villain. They are also high-profile targets for sophisticated (and sometimes way less than sophisticated) hacking operations. About the only things they have going for them are the goodwill based on their long, hallowed histories, and their “too-big-to-fail” size.

The fintech startups that are elbowing their way into the industry aren’t going toe-to-toe with the big banks, but are targeting individual services and products traditionally provided by banks. Examples of services available and in development include online currencies, p2p lending, mobile wallets, and banking that connects to social networking platforms. Successful fintech ventures work when they increase customer access to information, improve the customer experience, and lower transaction fees, through swift reflexes that large banks are incapable of.

The main weakness of fintech startups is that most are still unproven. Innovators aren’t sure to what extent they should cooperate with conventional banks, but at the same time whether they can really be independent. The startling increase in investments shows that confidence is growing, but fintech products can remain in the imagination and development phrases for years before debuting to the public. From the start, dependability and trustworthiness are paramount: if a bank website is hacked and goes down for the afternoon, or if strange charges eat into our bank balances, we grit our teeth and wait for the irritation to go away, but with a new and unfamiliarfintech company, even the smallest error could irreparably damage customer trust. Thus, fintech companies trying to prove themselves must be conscientious, which means focusing directly on security.

The best known fintech victim of hacking so far has been Clinkle, a startup rumored to be working on a mobile payment system using ultrasound frequencies. But in the development phase they neglected security, enabling a hacker to access their network through a private API and steal the personal information of 33 internal test accounts, including an embarrassing picture of the CEO. He posted the stolen information online with phone numbers masked as a courtesy, admonishing Clinkle for its carelessness. The breach hurt public trust in the young company, which one day hopes to control your mobile financial transactions.

Fintechs that want a setting at the big financial table face a myriad of regulations to prove their code of conduct, their ability to handle vital financial information, and compliance with the law. The industry is merciless, and a fintech that can’t take care of its own information won’t be missed by anyone.

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