FinTech’s Biggest Concerns in 2017
With the FinTech market being on an all-time rise, the industry needs to now look at how it can work on improving regulatory frameworks, risk management, and fraud management.
Currently, there are no globally accepted standards for regulatory frameworks of the Fintech Credit market. Most governments have designed the regulations by modifying the existing financial frameworks or by developing a new system altogether.
The primary concerns of the market are to protect the interest of all stakeholders. The current idea is to bring up a fair market where all participants are aware of possible risks and benefits of Fintech Credit.
What are Fintech’s Biggest Concerns?
Policy makers across time zones have duly realized the power and the prowess of Fintech credit market, especially after the financial turmoil of 2008. To facilitate the growth of Fintech market, China, France, and the UK have introduced tax incentives. Many countries are backing innovation facilitators like innovation hubs, business incubators, and accelerators that staunchly promote Fintech credit. They also have regulatory sandboxes, where they pilot program new Fintech technologies. With the Fintech Credit market constantly growing, a need for regulation should be a primary concern.
Fintech credit market is usually a high return and high-risk investment. Therefore, it is vital for policy makers to introduce instruments that will optimize the possible risks. Most of the countries demand the intermediary fintech platform to duly declare the underlying risk of investing to avoid corporate misconduct. In France, the lenders are expected to report the investors about the potential risks and benefits of the project before in hand. In Spain, the intermediary platforms are responsible for verifying the information supplied by the investors. Many countries like Spain and China have introduced lending restrictions.
Fintech Credit is more like a democratic way of financing, where the investors independently decide where to invest without much interference of any third party. In the absence of stricter regulations and policy watchdogs, scammers can readily manipulate investors by using unfair means. Additionally, due to heavy dependence of Fintech Credit on technology, there will always be a risk of cyber frauds. All of this can cause huge financial setback and loss of trust in the budding institution.
The Fintech market has yet to develop a foolproof plan on how to tackle potential cyber fraud.