It’s safe to say that fintech is one of the hottest technology sectors today — people interact daily with various fintech applications, from eCommerce apps to cryptocurrency trading platforms. In the digital payments segment solely, the number of users is predicted to grow to a whopping 5,480.33 million by 2027.
Since fintech is such a thriving sector, it is a popular choice with many startups. However, creating a viable fintech app can be a challenging endeavor. Besides hiring a full cycle software development company to build a solution, there are some extra steps to take. In this guide, we’re taking a deeper look into fintech app development.
What is fintech?
Fintech (abbreviated from financial technology) is the use of technology to improve financial services. Fintech encompasses a variety of technologies, such as artificial intelligence and blockchain, to make financial operations faster, more accessible, and more secure.
Types of fintech applications
There are many types of fintech apps, so it’s essential to decide on which exactly you want to develop.
Mobile banking
As the name suggests, mobile banking apps enable users to manage their bank accounts directly from their smartphones. Such an app offers the majority of services you can get at a physical bank branch — opening an account, checking the balance, reviewing the transaction history, transferring funds, making payments, etc., everything on a 24/7 access basis.
Digital payments
A digital payment app allows users to transfer funds to an individual or organization via a mobile device in real-time. It enables instant payments by removing the need to enter credit card details every time a user makes a purchase online.
Insurtech applications
Insurtech apps help users manage their insurance more effectively by providing insights into how to leverage their plans. Insurance apps also help automate some processes for better customer experiences.
Investment applications
These are platforms for independently investing your money, with no need for an intermediary. Such solutions allow users to trade stocks easily and conveniently, monitoring the market in real time.
Digital lending
Lending platforms allow users to efficiently manage loan requests and are used both by independent consumers and financial institutions. A lending app typically includes a loan calculator and credit score and loan application matching features.
Regtech
Finance belongs to one of the most heavily regulated sectors, making compliance costly and lengthy. Regtech platforms use the Software-as-a-Service approach to financial compliance. Such applications utilize Data Science and AI to help users identify abnormal patterns signifying fraudulent behavior. They use innovative technologies to automate KYB, KYC, AML, and other compliance checks, tackle regulatory issues, and help financial services companies monitor ongoing processes.
Why fintech?
Fintech is a popular choice with startups since the fintech market is thriving and isn’t likely to slow down. The number of consumers using digital payments is growing exponentially, more investments are made into fintech solutions, and the regulatory landscape is changing in favor of fintech. Given that, the market is sure to grow.
How to build a successful fintech app
It might be challenging to build a fintech app that will survive in this intensely competitive market; still, this is quite achievable if you take a diligent approach. Here are some steps to help you.
1. Select your niche
For starters, you need to decide on your target market and choose what type of fintech app you will create — digital payment, insurance, trading, etc. Remember that there can be other startups with the same concept, so stay clear of being too straightforward. Instead, focus on a more complex solution, and think of fresh ideas to help your app stand out from the crowd.
2. Make sure you comply with regulations
As already mentioned, the fintech sector is heavily regulated, so before building your app, make sure it complies with the regulations. Significantly, these regulations differ across different geographies, so it’s imperative to check your concept against the regulatory standards of the country your app is intended to work in.
3. Do market research
Market research will help you outline a clear vision of your app, prioritize features, and discover features you might have overlooked. Market research provides a deeper look into your competition, allowing you to create a better solution and thus get a competitive advantage. In addition, it can help you discover unresolved pain points and tailor a solution to address them effectively.
4. Define the features
Once you’ve carried out market research and defined your project goals, it’s high time to select features for your fintech application. A word of advice: your app doesn’t need to be jam-packed with plenty of features. Instead, focus on several ones that will make your solution user-friendly, innovative, fast, and secure.
When defining the features, make sure you also include two-factor authentication and chatbot besides the features that will directly reflect your app’s goals.
5. Find a team with relevant expertise
Building fintech applications call for a team with expertise in technology and finance, so make sure you choose a partner that meets this requirement. For this, research, explore case studies and reviews, and interview different teams to make an informed choice.
If you want to be involved in the development process as much as possible, give preference to a software development team that uses the Agile methodology. The Agile approach enables the development of the product faster while minimizing risks and helps ensure higher quality due to the continuous feedback loop. To find out more about Agile, read the Agile development lifecycle explained.
6. Build and improve
Working on your fintech app shouldn’t stop once it goes live. To secure its smooth performance and users’ loyalty, you must constantly improve it by adding new features and fixing issues.
Parting thoughts
There is no doubt that building a functional fintech app like Tableau Shopify creates tremendous opportunities for a startup. Although developing a fintech solution is associated with some challenges, they can be easily solved with the right team by your side.