In recent years, Ghana has witnessed a rapid rise in fintech companies, both domestically and internationally, with an estimated 70 fintechs operating in the country.
The companies have now firmly entrenched themselves in Ghana, simplifying payments and financial transactions for locals. With the country pursuing more financial digitalization, these fintech companies are looking at even more growth over the coming years.
However, the fintech sector also faces several key challenges that fintechs need to navigate through, if they are to establish a compelling business.
Data Security
According to reports, in 2021, there were 1,862 data breaches in Ghana, with each incident costing an average of $4.24 million. This record-high number has heightened concerns about cybersecurity in the banking sector.
Companies must recognize that a breach can result in both financial loss and damage to their reputation. To mitigate this risk, developing a fintech app with features such as two-factor authentication and biometric authentication is essential.
Regulatory Compliance
Navigating the extensive government regulations that come with the high-risk industry is yet another challenge faced by fintechs. Companies must comply with various laws, including:
- GDPR (General Data Protection Regulation)
- GLBA (Gramm-Leach-Bliley Act)
- the Wiretap Act
- the Money Laundering Control Act, among others
Lack of Technical Expertise
Many banks and financial institutions rely on outdated software and face challenges in innovating within the mobile banking sphere. This is a major concern because their apps often lack user-friendliness and intuitive design.
While there is an ongoing shift towards enhancing user experience, the progress remains slow.
User Retention And Experience
Keeping users engaged in the fintech space remains yet another challenge for the Ghanaian market. Low retention rates lead to fewer users, and consequently, reduced income.
You can observe the strategies employed by your competitors to understand their impact on user experience. Analyzing these different methods will help you select the best options for your startup.
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