There are a growing number of financial technology companies starting up across the globe in an effort to find ways to harness technology to reach underserved or unserved customers. While financial inclusion presents both a development and a business opportunity, there are challenges that constrain the ability of this cadre of entrepreneurs.

  1. The regulatory environment: Regulations often hamper the fintech industry, which has to abide by financial rules and often other sectoral rules as well if the company sells a product such as insurance, for example.
  2. Funding: The perennial challenge for any entrepreneur, funding can be especially challenging for innovative fintech companies who are still developing their product and identifying their market.
  3. Technology: Figuring out the right technology, both for the customers and for the company, can be tricky for some fintechs, and will often evolve as the company develops its product and responds to consumer needs.
  4. The human element: Technology alone is often not enough. Some of the companies in the Catalyst Fund have found that having a human element, perhaps at the sales point, or elsewhere in the process is critical to customer acquisition and retention Briggs said.
  5. Building trust: When banking and financial services relied on a relationship with a physical institution, it was easier to build trust with customers, but fintech companies often struggle to build trust and loyalty through a digital platform, Briggs said.

Read the full article on fintech by Adva Saldinger at Devex International Development