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3 key barriers to the Fintech industry

Fintech is the latest industry that is seeing a steep rise in many places around the world. Turkish fintech companies grew by 175% in 2016, showing that there is a market for the sector and also a way to achieve market capitalization. The Turkish fintech industry is estimated to be worth a cool $15 billion. Indeed, the success of fintech companies the world over helped power forward other areas of the industry to show that the limits were few and the scale was large for the sector. But, there are still potential barriers to the development of the sector’s growth, despite some of the rosy figures that have come from various areas within the sector.

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Technological limitations are a dampener for fintech growth. As most of the territory covered is new, understanding which tech would be beneficial and which won’t work is critical to move the company forward. Online trading, such as through the IG platform, has taken a key barrier to their industry – the time needed to trade – and removed it by allowing people to easily access their portfolio on their phone or computer. As most fintech companies are operating in previously uncharted territories, trial and error of technological solutions needs to be undertaken, which could be a barrier to some companies.

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Another such barrier affecting the Turkish fintech industry is that the existing regulations aren’t conducive for the growth of an industry that is largely new. While regulations are imperative to protect companies and consumers alike, difficulties in regulating areas such as cryptocurrency in terms of tax and insurance could lead to downshift in the industry. While the regulations are ultimately there for protection, they do incur some slowing down of key processes. A solution could be to revolutionize the regulation to be friendly to fintech growth while also serving its purpose of protecting those who operate within the fintech sphere.


Tech barriers can be even worse than anticipated, especially when this is compounded with the need for funds, which can also impede some fintech companies. The best goal for most fintech companies is to attract Silicon Valley investment. Top investors may be reticent to invest in emerging markets, which is what fintech is based within, while developing countries may struggle to find any investment at all. Some cite this bias, which has resulted in Silicon Valley money being pumped into duplicate projects, while innovative ideas south of the border have been overlooked due to the market they operate in. A fairer and more robust system of finding funding and allocating it could help break this barrier.

While the fintech industry continues to boom, it will still be mired with the same barriers. Despite work being undertaken to slowly overcome them, there will still be genius ideas falling by the wayside as a result of arbitrary biases in the industry. Regulations will change over time to allow greater scope, technological implications will be easier to overcome with more industry research, and capital investment will be attracted when existing fintech companies showcase great returns. But, all three will take time.