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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 ever-changing competitive landscape of financial services and international businesses imposes a range of payment challenges on banks and payment service providers. Evolving customers’ demands also play a significant role in this process.

Let’s investigate the major payment challenges that banks and PSPs may face and ways to overcome them.

Data security

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

Being one of the most regulated, the financial sector requires strict compliance with various governmental regulations. Financial institutions, banks, and payment service providers have to comply with the standards and regulations to deliver their services to customers securely. 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 consultants to help you solve this type of questions but be sure they are aware of 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 payments 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?

You can transform this challenge into a potential for expansion. All you need is a payment gateway that processes payments utilising smart routing and dynamic currency conversion that increase the efficiency of each transaction.

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 are still unable to 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.

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 customer behaviour and trends. To get these insights, you can utilise payments reconciliations and transactional data analysis. Such tools allow you to sneak a peek into users' preferred payment methods, time for payment, etc.

Digital transformation is attainable for every 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 efforts, and financial resources. Corefy offers a set of tools that helps to overcome the majority of challenges that appear in the modern fickle payments landscape. You can check this with your very eyes on a live demo of our product. Contact us to find out more.

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