5 Challenges Entrepreneur Face While Running a Fintech Company There are obstacles to overcome but if fintech manoeuvre through these challenges, the take-off would be brilliant.

Fintech startups have seen significant growth over the last three years. With the Government taking an active role in pursuing Digital – through India stack, Startup India, Jan DhanYojana, and supporting payment infrastructure through NPCI, Fintech companies are having an easier ride than expected. However, they still have many challenges ahead of them – that could curtail this early growth

1. Cash driven economy – While Digital has proliferated across the country and we are seeing an increased number of digital transactions year on year, India still is a cash-driven economy. Demonetization pushed people to adopt digital mediums due to cash crunch. However, there has been a significant decline in digital transactions once cash was available. Fintech's growth primarily was achieved by moving digital savvy people away from banks. True growth for fintech will happen only when we are able to move people away from cash transactions. This requires significant work by fintech in collaboration with government and financial institutions

2. Low Trust – Over the years, people's trust level in institutions has declined and fintech has to deal with trust issues as they launch their products. Since we are dealing with money, people are more skeptical about a new fintech firm or product. Fintech has to work extra hard (compared to other startups) to gain the trust of the customer. They need to devise new ways of approaching customer to build trust.

3. Data Security & Privacy – Recent Facebook scrutiny & enquiries have definitely heightened people awareness levels of data Security and data privacy. Every company will now be questioned around these topics and more so fintech, as they have access to sensitive financial information of the customers. People would be more hesitant in terms of data that they share and as in the previous point, Fintech has to work extra hard to articulate their position on data security and make visible their controls to the customer. Also, the current focus is on data Security issues in online mode. It is important for Fintech to articulate data security issues that exist in offline mode too, and how the online model could have effective controls over offline. It is extremely critical for fintech to be fully transparent about customer's data and what they are sharing with third parties if any.

4. Emerging Regulations – As more and more fintech companies are emerging & being successful in attracting a large number of customers, regulators are revisiting regulations in the context of digital streams. Since most regulations tend to come post fintech companies being operational & servicing customers, they have to change their business model & mechanisms to get their businesses to comply with new regulations. This is challenging for fintech companies as they have to re-align/comply without hampering service to customers. In certain cases, the new regulations make it unfeasible for some companies to offer their services – thus creating chaos and larger trust issues for customers to embrace these digital platforms

5. Product v/s Solution Approach – Financial Services Industry has predominantly been product focused (products being lending, investments, payments etc). Customers have to build their own solutions across these products. Fintech has adopted the same approach – they are also product focused and expect customers to connect the dots across the platforms/products. This does not allow many customers (who are not financially knowledgeable) to achieve their overall needs and keeps many people away from financial inclusion. It's high time fintech start focusing on delivering end-to-end solutions for customers

Fintech journey is still at the beginning of a runway. People are still anxious about money and their future. There are obstacles to overcome but if Fintech manoeuvre through these challenges, the take-off would be brilliant.