5 major payment challenges of banks, PSPs, and financial institutions
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5 major payment challenges of banks, PSPs, and financial institutions

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The financial service industry has become increasingly complex with various challenges and opportunities. In particular, payment processing has become an increasingly important part of the financial services sector, yet it is also one of the most challenging aspects. With new technologies, increased security requirements, and ever-evolving customer experience expectations, it’s no surprise that banks, PSPs, and other financial institutions might face a number of payment industry challenges.

In this article, we'll discuss today's five biggest payment challenges financial service companies face and how to overcome them.

5 key challenges facing the financial service industry in 2023

Data security & cyber incidents

As data breaches become prevalent, the security of customers’ payment data and transaction processing becomes one of the major concerns worldwide. Traditional banks implement reliable safety measures offline – safe vaults, security guards, bulletproof doors, etc. But with virtual security, things are more complicated. Virtual threats jeopardise not only money but clients’ personal data as well.

What can be done?

To cope with this challenge, banks, PSPs, and financial institutions should pay attention to the implementation of the following measures:

  • Two-factor authorisation
  • Biometric authentication
  • Data encryption
  • Real-time alerts and notifications
  • Behaviour analysis

Regulatory compliance & changes in legislation

Being one of the most regulated, the financial sector requires strict compliance with various governmental regulations. Financial institutions, banks, and payment service providers must comply with the standards and regulations to securely deliver customer services. This challenge becomes acute when expanding to new countries.

What can be done?

Make sure the software and applications you are up to utilise are legally compliant. You may hire legal counsellors to help you solve such issues but be sure they know the latest rules and policies to implement them immediately. Also, you can partner with a payment platform that complies with all industry standards – PCI DSS, for instance – and offer payment services to your clients via a white label payment gateway.

Cross-border payments

Providing smooth cross-border payment services is a challenge for both banks and PSPs. And the reasons lie in the number of intermediaries and fees they all charge for their services and currency conversion while processing a transaction. As a result, cross-border payments might be slow and expensive.

What can be done?

Good news – you can transform this challenge into a potential for your business expansion. All you need is partnering up with a payment gateway that processes payments utilising smart routing and dynamic currency conversion. It will increase the efficiency of each transaction and broaden your audience.

Mobile & tech expertise

More and more users are becoming digital-savvy, displaying a shift in payment preferences to online methods. Moreover, they don’t want just an opportunity to use digital payment services; they look for a seamless and secure user experience. As a counterbalance, some banks and financial companies can still not offer convenient, user-friendly mobile banking services. Non-user-friendly apps and services result in lost clients and profit.

What can be done?

Hire a team of experienced developers to create a high-end solution to meet the customers’ needs. Or you can rely on ready-made solutions maintained by their creators and provided for you to use under a white label business model.

Personalisation of services

This aspect is of core value for banking services. Modern personalised banking service is like a personal financial wellness coach who interacts with you when you need it via the channel you want and offers solutions that meet your individual needs. Convenience – that is what people are demanding from modern product and service providers.

Modern fintech solutions provide a range of essential features for one client and, simultaneously, unnecessary for another. Personalisation helps to customise everything according to each client's personal needs.

What can be done?

The only thing that can help you implement personalisation is understanding your customers' behaviour and trends. You can make use of payment reconciliation and transactional data analysis to get deeper insights into your audience's habits and preferences. Such tools allow you to sneak a peek into users' preferred payment methods, time for payment, etc.

Digital transformation is attainable for every financial services company – bank, PSP, or financial institution in case of sufficient time and resources. Some businesses want to be in charge of everything, but such a path is quite rocky and time-consuming.

There is a way to save you tons of time, manual effort, and financial resources. Corefy's payment orchestration platform offers a set of smart tools that help to overcome the majority of challenges that appear in the modern fickle payments landscape. Partnering with us, merchants get the ability to hassle-freely process payments and payouts via 650+ payment service providers and 400+ payment methods. Moreover, you'll be able to perform payment management and reconciliation via a convenient payment dashboard.

Check our solution with your very eyes on a live demo of our product. Contact us to learn more and see how your business can benefit from Corefy.

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