Biggest Risks Facing Fintech Companies When Launching New Products and Services

Legal and ethical failures are two of the biggest risks financial companies face when launching new products and services. 

Assured Thought says it is seeing a growing trend of even the largest, most well established financial organisations running into problems by putting out products that aren’t yet ready, or that haven’t been tested thoroughly enough. 

Immature, or inefficient quality assurance (QA) processes can lead to software glitches and deficiencies in products that are released to customers, with severe consequences. Across the financial services sector it is estimated that £2.45 billion is lost each year through a lack of rigour in testing.  

Daniel Dore, CEO, Assured Thought comments, “Many financial companies face huge operational challenges as they head into 2023.  Established financial organisations have problems with business agility and moving away from legacy infrastructure.” 

Without having efficient QA processes in place, businesses run the following five risks when bringing products to market:

Firstly is the legal risk.  Missed regulatory and compliance requirements can lead to fines and lasting reputational damage for the company. 

Next is the ethical risk. Unmet commitments and promises made to clients, employees and shareholders can lead to integrity loss and, again, reputational damage.

System failures in a product that is live and being used by customers erodes trust and costs time and money to fix. Delays are also risk throughout the process. Projects overrunning and, in some cases being abandoned, waste a huge amount of time, leading to financial losses, opportunity cost, frustrated staff and write-offs. 

Finally financial losses with product launches or updates that fail to deliver for the business are likely to deliver a negative return on investment.

Daniel Dore, CEO, Assured Thought adds “Newer financial services businesses can overlook the importance of investing in QA personnel, processes and technology. In both scenarios, we have seen the detrimental impact this can have first-hand, the risks posed by rushing new software through the development process without rigorous testing are very real and can set the whole business back.” 

Taking affirmative action to ensure all technical aspects of a new product reach the high standards necessary to be successful in the financial services market is crucial. Having robust and efficient QA processes in place as early-on in the business’s growth cycle as possible sets fintechs on the road to success.