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The factors that contribute to the success of Fintech firms are the availability of funding, the ability to identify commercially viable innovative ideas(entrepreneurship), developing supporting software and hardware to convert the ideas to solutions(technology), demand for Fintech products from consumers (B2C) or from other businesses (B2B) and policy framework which regulates the Fintech market (Deloitte, 2017).
Regarding the growth constraints, new Fintech is always confronted with challenges in raising adequate funds (Beck et al.,2008; OECD,2006). Vulnerable capital structures often hamper the growth of Fintech firms (Magnuson,2018), and hence raising of equity capital as a permanent source of finance has a significant role in the growth path of a startup(Colombo &Grill,2010).Due to the shortage of equity capital, a major percentage of startups in their early-stage face difficulty in meeting their operational cost and thus often fail in their business (Berger & Udell,1998; Nguyen,2019). Hence an eco-system to mobilize the initial equity capital is a pre-requisite for the development of the Fintech market.
Along with ownership capital, regulatory compliance can promote a high degree of standardization in financial services and can ensure service stability and consumer protection (Romanova et al., 2018; Rory, 2018). Fintech is exposed to cyber-security threats or amplifying third-party risks (Schindler, 2017). The hurdles faced by regulators include consumer protection and keeping a level playing field that strikes the right balance between fostering innovation and preserving financial stability (Xavier, 2019). Buchak et al. (2018) emphasize the need for regulatory measures to control Fintech firms, the absence of which will lead to shadow banking which in turn may lead to financial crises.