Resiliency in Fintech : Know Everything Here

Resiliency in Fintech : Know Everything Here

Resiliency in Fintech :

With the spread of COVID-19 in 2019, fintech companies have had to deal with the effects of a global health disaster that has never been seen before. This has caused major changes in how finances are handled. 

To make sure customers can easily access products and services, banks are having to deal with a lot of stress. For example, they have to move employees to work from home and deal with a lot of extra demand on technology systems that haven’t been tried in this way before.

In this age of pandemics, one of the most important things you can do for your FinTech business is to make it robust. It has become very important for both people and operations. On the one hand, the sector has started to pay more attention to the health of its workers. On the other hand, it has begun to move toward digital change to make its operations more stable.

Fintech

In the next few parts, we’ll talk more about why fintech service providers need to be resilient and the different ways they can become or stay resilient. 

Table of Content

Why is it important to make your FinTech company strong?

Banks and other fintech companies now put a high value on operating efficiency because they see it as a key part of being financially stable. A lack of resilience puts at risk both the individual goals of the regulatory agencies and their shared task to keep the financial system stable. Let’s take a look at why fintech stability is important. 

Meet the needs of regulators

As financial systems get more complicated, financial officials have talked about how important it is to have rules that apply across the whole country. Government officials look at how resilient a fintech company is in a way that takes into account changes in both technology and the market.

Get ready for threats to your safety

Fintech companies are more likely to be attacked by hackers because they depend more on third-party service providers and digital tools. This means that the sector needs to be better prepared for security problems. Cyberattacks are much harder to find and stop than other types of risks until a resilience engineering system is put in place.

Get rid of the chances of outages

If you don’t make it a goal to make your FinTech business resilient, cyberattacks, pandemics, and changes in geopolitics can affect the most important parts of your business. By building resilience, fintech can see processes and important assets, which gets them ready for when fintech services or processes go down.

Strong Fintech Business

Protect yourself and your customers with data

A few months ago, when there was a pandemic going on, companies that were driven by data showed that they were stronger and more confident. It made sense for these kinds of organizations to count on their data as they moved into the next phase of uncertain events. Real-time data and insights are very important for giving the team power and helping them make smart choices. 

Now, businesses can make exact predictions and know where they want to go. By making their FinTech business more stable, they can also find new chances that will help them be more productive and improve how they run their business.

With durable control systems, businesses can also add data at every step to improve the customer experience and make real-time profiles of each customer. With these user accounts, teams like customer service, sales, marketing, and others will be able to give each user a personalized experience in real time.

Find a good balance between being responsible and making money.

Fintech companies depend on resilience engineering to help them find business models that balance making money and being a good corporate citizen in order to achieve long-term growth. Fintech companies have been able to get more satisfied and involved stakeholders thanks to the strong control systems. 

The biggest brands in the world think that data and technology can help make business models more resilient and open to everyone, especially those in the financial services industry. For example, many customers had trouble with cash flow during the height of the pandemic. But some banks used data to make their business operations more flexible by changing how they gave out loans. 

Customers would be able to easily handle their money matters, and financial companies would be able to help them with their loan repayment needs.

Now that we know why the fintech industry needs to be resilient, it’s important to look at the problems that are stopping it from becoming fully integrated. 

Problems that come up when trying to make a fintech business resilient

Let’s look at some of the most common problems that come up when you try to make your FinTech business strong:

Problems with Culture 

A business service can cover a wide range of third parties and tools. Also, when hacking and people are involved, it can be hard to gather the data and see how it fits with the business goals. 

In order to do this, the key cross-team business services need to identify who is responsible for what. Each team needs to put in some work into the evaluation and come up with a way to make their business areas better. 

Every one of these things needs a strong mindset of risk management in the way business is done.

An investment 

Depending on how old the fintech company is, it may have to spend a lot of money on resiliency. There will need to be money put behind – 

  • reviewing the practical risks they face with new regulations on a regular basis
  • Looking at the possible weaknesses
  • Putting in place the right defenses
  • Legacy systems are hard to understand

Financial institutions’ old systems can get very complicated and hard to handle and improve. To make operations more reliable, all of the old technology must be updated and checked to make sure it can keep working well.

When you think about why risk management is important for businesses and the problems that come with it, you should know how to make fintech software completely resilient.

How to Keep a Fintech Business Going?

There is a lot of unpredictability and market volatility because of many things, such as sudden changes in supply and demand, strict policies meant to fight inflation, and a lack of money for new projects. When it comes to technology, these things change how capital flows and how people spend. Here are some of the best ways to make your financial business strong. 

Focus on Your Customers

If a fintech service provider wants to be more customer-focused, they will be able to handle any system changes.

Because of the pandemic, companies are now more focused on their customers than ever before. In fact, some experts think that hyper-personalization will be a big part of the future of financial services. The truth is that companies that put people first will do very well these days. 

Cybersecurity needs to be the main focus.

Because of the quick shift to digitalization, there are more financial frauds and risks. If things keep going the way they are, payment theft will rise by about 130% by 2024. 

On a country level, this worry is seen and talked about. One country that has called the rise in cyberattacks a “national security threat” is the UK. To make their cyber-resilience stronger, fintech companies will need to use AI or other cutting-edge technologies.

Experts from Appic Softwares worked with Bajaj Finserv, a major fintech company, and used their cybersecurity intelligence services to create a digital platform that uses cutting-edge technologies to stop theft.

Productivity Increased by RPA

Given the rise in mass personalization and fraud attempts, putting efficiency first around these factors can give fintech companies an edge over their competitors in their field. 

FinTech companies are using software to make robots do low-skilled, repetitive jobs. This is called robotic process automation, and it helps FinTech companies become more resilient.

Know and manage your cash flow.

A simple cash flow analysis will help you find the problems by comparing the amount of money you still owe on purchases to the amount of money you owe on sales at the end of each month. 

If the amount of unpaid sales is higher than the amount of sales that are still due, you should figure out where you might need to cut costs, where you’ll need to step up your sales efforts, or which of your customers are slow payers.

Plan your loans and investments. 

Keeping an eye on your budget can help you make business choices that will allow you to be flexible. It can also help you figure out where your money might run short and how to fix that problem before it happens. 

A lot of small businesses think they won’t be able to get financing, but recent research shows that 88% of businesses that apply for expansion financing are approved.

Find new ways to make money.

Companies that are doing well financially look for ways to cut costs while also looking for new ways to make money. Like any other business choice, adding a new source of income needs to be done in a smart way if it’s to be successful.

Diversification helps businesses grow and handle unexpected market changes by making better use of their resources and improving the lifetime value of each customer.

But for businesses to be successful, they need to take steps to lower the risks that come with variety. You should look at your current business resources and market needs to pick a good or service that you can sell for a low marginal cost.

Finding the Important Assets

Disruption can happen at any time. Operational resilience is more than just managing business risks or coming up with risk management strategies to figure out how big the risks are. This is because new technologies and changes in the market can’t be expected. It should be the plan for saving the most important companies. 

Finding the most important assets and key business tasks should be done with the goal of keeping the operations and assets safe, no matter where the disruption comes from. A fintech company that is operationally resilient will have policies, processes, and practices in place to help them deal with any problems that come up.

Check the plans ahead of time

Building resilient control systems is an ongoing process that needs to be reviewed, tested, and audited on a regular basis. These plans should change along with the processes and systems. 

External and internal audits are used all the time to check how well the resilience efforts are working. This keeps the plan up to date, finds problems caused by changes in policy and procedure, and supports a culture of resilience and risk management across the whole company. As new infrastructure and technologies are put in place, you should try and go over your FinTech business’s plan for making it resilient.

Come up with a plan for managing operational risk

You need resilience engineering software to figure out and control the risks that come from people, internal systems, third parties, and threats from the outside. But this can’t be done in a separate room. For operational and business risk management to work well, the business units, senior management, and the internal or external audit role need to be able to work together. 

A cross-functional model helps find, reduce, and solve operating risks, including third-party risks, in a strategic way.

What to do about operational resilience and when to do it?

resilience

Don’t think of operational resilience as a one-time thing. Instead, see it as a set of values and behaviors that are deeply embedded in the culture and DNA of the fintech company. Because organizational resilience is linked to change, financial institutions should always be looking at things and changing to deal with new threats and put new solutions in place.

Financial services companies should look at the most effective ways to spend time and money on growth on a regular basis, as well as the most common reasons why operations are interrupted. A variety of business risk management tools can be used to test a company’s ability to spot, stop, react to, and recover from cyber disasters. With this kind of framework, it’s easier for technical teams and business partners to talk to each other.

It is helpful for a company to understand how to manage cybersecurity risks for systems, people, assets, data, and capabilities. It works the same way for both cyber-resilience and practical resilience.

You can speed up your journey to operational resilience by following these steps:

From an organizational point of view, make sure that the team knows enough about practical resilience. Senior management should set up the right KPIs for execution and control, and success should be shown in a way that can be measured.

Make sure everyone shares the same attitude. To improve how things are done in areas like people, process, governance, and technology, use a multidimensional operational resilience framework.

Look for a neutral, outside view of the market. To add to what you already know, find other, unbiased opinions from related groups and nearby industries.

Having a process in place is also very important when it comes to making fintech solutions more adaptable. These tips are very important.

How to Make Fintech Products That Can Handle Failure

How to Make Fintech Products That Can Handle Failure

The only way for the fintech business to gain trust from both customers and regulators is to keep upgrading and maintaining its resilience. To make sure of this, they have to take a set of steps. 

1. The Report

Making smart choices about resilience depends on how well the KRIs and KPIs are reported.

2. Checking out

The business’s ability to bounce back from problems should be checked and rechecked often through reports and tests. 

3. Science and technology

For the fintech goods to be safe from cyber threats and delays caused by technology that is no longer supported, the technology stack needs to be kept up to date. 

4. Being tolerant

It is important to keep looking over the effect tolerances as business strategies change, customer expectations shift, technologies improve, and rules change. 

5. Other People

It is important to keep an eye on resilience for all third-party contracts. Making sure that a business is resilient involves more than just checking the organizations inside the business. It also involves checking with everyone that the business deals with. 

6. Change the shows

Before IT or business process projects are changed and given the go-ahead, the resilience criteria should be looked at. 

7. The Conversation

It is important to keep internal and external contact lines open and working well. At every step of resilience, the goal should be to reduce any backlog that is specific to resilience over time. 

8. Recovery from Disaster

Plans for dealing with disasters should not only describe the effects of the problem, but also how to fix it. A crisis management team should be set up to handle the problems. 

9. Changes in Culture

Once the practical resilience part is taken care of, you can move on to the cultural part. For workers to understand the resilience framework, their part in it, and how important business continuity is, there needs to be a change in the way things are done.

10.  Taking ownership

The operational resilience framework needs clear ownership of the key roles and tasks to make sure the process goes smoothly and people know what their duties are.

How can Appic Softwares help your fintech company be more stable? 

We are fintech software development service providers who can help you make your fintech business strong so that it can handle all risks, both inside and outside the company.

We know what it takes to get a fintech company ready to work in a world that is always changing. With the help of cutting-edge technologies like Blockchain, AI, and IoT, we have helped many financial companies around the world stay open during the pandemic. 

We can also help you make your financial services business run more smoothly. Getting in touch with our Fintech team right now.

FAQs

  • Q:What does “resilience” mean in the fintech business?

In the past, resilience meant making sure that businesses could keep running after a cyber-breach or a service delay caused by an IT outage for financial services firms. That being said, this meaning has changed since the pandemic.

  • How can you make your banking business more stable?

In order to make their business more financially stable, fintech companies can do the following:

  • Having more control over security

As the financial industry digitizes more and more, cybersecurity has become more important. People who work in the fintech business have a hard time keeping private and sensitive data safe.

Because of this, fintech companies need strong security, which can only be achieved by making software. This way, they can give a safe protocol. With a custom app, it’s easy to keep your business safe from threats and control its security level.

  • Keeping transactions safe

There are a lot more identity checks, financial scams, and security holes than there used to be. Fintech companies are investing in new technologies that improve security so that payments can be encrypted, authenticated, and verified securely from beginning to end.

  • Lets you have a personalized experience

Banks and other financial companies are now using faster digital transformation strategies to make sure they don’t become obsolete. So, right now, financial institutions are replacing or improving their old systems with brand-new ones that allow for more creativity.

  • Use cutting-edge technologies

Modern technologies like blockchain, AI, ML, and IoT are now being used by these banks to keep the financial process running smoothly. Custom software can give each customer an experience that is perfectly suited to their needs by creating advanced dashboards, personalized portals, automated workflows, CRM software, and chatbots that are driven by AI. In turn, this can help banks and other financial companies run their businesses more efficiently.

  • Get customers to stay with you longer.

People expect to be able to get anything they want since on-demand came out. They’re smarter and more tech-savvy. They expect you to give them more streamlined and personalized banking choices.

When you use cutting-edge robotics, blockchain, AI, and analytics technology in custom software solutions, you can give them a useful experience. This is something you can do to make your business better and meet customer needs.

  • Why is investing in the creation of fintech software a good idea?

There are a lot of good reasons for business owners to put money into making their own financial tools. Let’s write them down.

  1. Digital money is coming out.
  2. The huge amount of app room
  3. Not as many people are going to banks.
  4. More new ideas and options
  • How do you handle risks in business?

Risk management is the process of finding, evaluating, and controlling the things that could hurt the financial security of your business. 

The main idea behind that statement is that a company will look at all the possible areas for problems, figure out the best ways to handle a tough situation, and then set up controls to help lower that risk as much as possible. 

It also means handling a tough situation when it comes up. Risk management in a business is important to make sure that the company and its leaders are aware of possible problems, help them find answers, and lower their risk.

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