At the time of the pandemic, when all other industries faced a massive slump in their growth, one industry that experienced a boom was the Fintech sector. Because of the curtailed physical movement due to COVID-based restrictions, there were encouraged contactless transactions. A combination of improved digitalization, the pandemic-induced inclination for digital services, and the affordability of smartphones have resulted in a great acceptance of Fintech applications across the globe. Services like investment advisory, real-time payments, peer-to-peer lending, disbursal of loans, insurance advisory, and many others have now switched from the traditional handling by human capital to the digital-native Fintech landscape.
In this guide, we will discuss how one can build a successful fintech application by following some of the crucial steps. Let’s begin:
Reasons Behind Launching a Fintech App
With fintech applications, there have been a revolutionary change in the world of finance and banking as new technologies are coming and many start-ups are entering this sector. Following are the reasons behind launching a Fintech app right now:
1. Increased Customer Base
An extended base of customers is seeking the benefits of fintech applications. These apps have increased user engagement as customers prefer making investments and performing transactions through AI-enabled apps rather than visiting branches for every small work or financial transaction. These apps offer 24*7 banking options and thus the fintech customer base is increasing day by day with an upsurge rate.
People are keen to get knowledge about fintech applications because of their vast popularity and growing demand. As a result, several people have opted for fintech application development as their career choice because of their tech-savvy nature and interest in finance. Thus, it becomes easy to get good fintech application developers that can provide scalable solutions.
3. Rapid Adoption
Fintech applications are currently on boom and businesses are looking forward to earning huge revenues with these apps. Presently, almost every smartphone has at least one fintech application for day-to-day usage. Financial institutions are widely using such apps to automate business processes and target the potential audience. The demand for digital wallets and mobile banking apps is at its peak as even the customers also want simple and fast financial transactions rather than waiting for days for a single banking operation.
4. Corporate Demand
It has been seen that the corporate sector has a huge demand for fintech development services as these fintech apps help to convert more potential users to loyal customers. Even many businesses analyse the benefits gained by the competitors with fintech applications and thus they are even inclined towards building apps that can help them earn a competitive edge.
5. Advanced Technologies
More and more advanced technologies are conquering the market of mobile application development. Technologies such as Robotics, AI, ML, Bigdata, Blockchain, and IoT have brought a boom in the use of fintech applications across the globe. If you are also learning how to create a fintech app, the first step should be gaining knowledge of these technologies so that you build a scalable and responsive fintech app based on any of these technologies.
6. Development Possibilities
The spectrum of developing fintech applications is widening as there is N number of applications that can be developed in this sector to provide services to the users. May it be simple banking transactions or AI-enabled financial planning activities all are done through these fintech applications. Therefore, analyzing the current market trends and with improved digitalization, there have been so many fintech app development possibilities present right now.
Why Fintech App is in Demand?
With the occurrence of the COVID 19 pandemic, there has been a massive impact on the finance and banking sector, and it had drastically changed the way how financial institutions operate. And as a result, there has arrived a huge demand for fintech apps across the globe.
As per the data, there was approximately a 132% hike globally in application downloads in the past two years. Out of which, the U.S. market stands alone at a 110% rise. This surge in the number of app installations included payment apps, banking apps, and investment apps at the top.
Type of Fintech Apps
Before looking for how to build a fintech app, it is vital to understand the different types of fintech apps so that you can choose which type of fintech app you should build for scaling your business. Let’s check the different types of fintech applications:
|Type of Fintech Application||Example|
|Investment||CNBC, Acorns, Robinhood|
|Consumer Finance||Finch, Mint, MoneyLion|
|Lending||ZestFinance, Brigit, Dave|
Top Features of a Fintech App
Whenever you read a guide to fintech application development, the most crucial segments are the development process and the features of the fintech application. In this section, we have highlighted some of the most significant features that are essential to be a part of the fintech app to fetch the attention of the users and make the application more responsive and functioning; Let’s check the features:
People use a fintech application to perform several confidential banking and financial transactions. Thus, taking care of the security and safety of the users’ data is the primary responsibility of any fintech application. For this, the fintech app developers implement aspects like two-factor authentication, blockchain, biometrics, encryption, and many other security measures to protect the data from any unauthorized access.
To simplify the use of a fintech application and make all the functions easily accessible by the users, there must be a feature that allows them to have a tour of the entire application explaining the key functionalities and capabilities of the fintech app. This needs to be short and meaningful that can help users get a customer-friendly experience comprising even those who are new to the finance world.
Primarily in most of the fintech apps, the data received by the users related to their incomes, expenses, and day-to-day transactions were delivered in a brief format. But one of the features that can help your fintech application gain a competitive edge is data visualization. With this, there will be a visual representation of all the aspects may it be stock charts, payment history, or spending. Therefore, it tends to be one of the mandated features when it comes to building a fintech application.
Voice assistant is the demand of the hour and so in the fintech apps. With the help of voice assistants, there is the surfacing of the most important and widely used features of the fintech applications. Voice assistants like Google Assistant, Siri, etc. help customers to use the application without the need to open it.
Payment Gateway Integration
The maximum of the fintech applications involve payment gateways and to enable such functionality, these applications integrate with other payment gateway services like PayPal, Stripe, etc. Thus, having a secure and seamless payment gateway is one of the significant features of a fintech application.
Fintech App Trends for 2022
There are some of the most prominent fintech app trends that are yielding popularity worldwide. Businesses following these trends by building applications are likely to gain a competitive edge. If you are also looking to build a fintech application, you can check these trends to make your solution much more responsive, reliable, and user-friendly.
AI and ML
With the use of Artificial Intelligence (AI) and Machine Learning (ML), it is forecasted that financial institutions would be able to reduce costs by a huge percentage. The market of applications integrating AI is experiencing a snowball effect and the existing players are seeking benefits like improved security, effective risk assessment, financial assistance, cost reduction, identity management, market forecasting, and many more. With all these advantages, businesses by integrating AI and ML can provide better services to users.
In the finance sector, one of the most prevailing technology trends is Blockchain. To make the fintech apps more effective and secure, financial institutions are widely using blockchain. The popularity of blockchain is increasing because of many reasons such as it enables cheaper and rapid transactions, improved compatibility with modern financial systems, smart contracts, and high demand for cryptocurrency and ICOs i.e., Initial Coin Offerings. But still using this trend is challenging and businesses need to hire expert mobile app developers for implementing blockchain technology in fintech applications.
Chatbots are used widely in almost all industries and retail is the first on the list with its extensive usage. With time, the fintech applications integrate this technology because of the vast benefits it holds. To speed up the transactions and to provide the customers with 24*7 assistance, companies providing fintech app development services have their emphasis on chatbot integration. Not only the modern businesses but the traditional ones and start-ups all are in the queue to follow such trends while building a fintech application.
Biometric authentication is one of the latest fintech app trends that had made financial products too much secure and safe to use. To prevent any sort of identity theft, biometric authentication is the necessity of modern fintech applications. Compared to the earlier security measures, biometric authentication comprising fingerprint, face, and, voice recognition is much more reliable to use.
Development Process of a Fintech App
Understanding the development process of a fintech application is a tough task but to make things easier, we have come up with a detailed and sorted list comprising the necessary steps involved in the development process. Have a look below:
Step 1: Niche Selection
Before you commence with the fintech app development process, there is a need to find a niche. It might take time and effort to research, but it is essential to select the right niche as it will help you to keep the process streamlined and to create a highly scalable fintech application. In the niche selection, one needs to finalize the type of fintech app, how
to build a fintech app, and the focused area. You should analyse what is the purpose of the application, such as whether it is for mobile banking, managing finances, crowdfunding, or something else. Once you are done with finding the purpose, the next part is to find the target audience and their requirements. All this research will help to make the entire development process smooth and seamless.
Step 2: Competitor Analysis
This step of the development process focuses on competitor analysis, and you should make sure that the fintech mobile app development company you hire develops an application that can win over the competitors. For performing a competitor analysis, it is required to do detailed market research of the existing applications and to find out their pros and cons. By finding out the glitches in the competitors’ fintech app design, you can build an app that resolves all those issues and can give the users a more rich and seamless experience. It will help in getting an edge over the competitors and having an extended customer base.
For example, eCommerce is an extremely broad spectrum, and to fetch the attention of the users, you can strengthen your fintech software development process by focusing on the quality improvement of the existing features that can make the application more responsive, fast, and seamless.
Step 3: Taking Care of the Compliances
When it is about the fintech application development then compliance is much deeper than in comparison with other application development. In this case, taking care of the publishing guidelines for the Apple App Store and Google Play store is not enough. Based on the target market selection, it is required to conduct proper compliance research for the identification of the potential abiding laws, restrictions, and legal hurdles. After the identification of all such legal factors, the development process should be adjusted accordingly. It is essential to know what is allowed to be performed as per the laws and regulations in the domain.
The fintech app development company must have a good legal understanding as with the change in the geographical location of the business these legalities also get changed depending upon the financial safeguarding systems and compliances. Some of the key examples comprise digital signature certificates, Anti-Money Laundering (AML), Know Your Customer (KYC), and many others. Make sure that this step is performed carefully so that there are no non-compliances.
Step 4: Develop a Team/Partnering with the Vendor
There are two major aspects in the process of how to make a fintech app i.e., technology and finance. And there is a need to hire a mobile app development company that has the right mix of both things to get a scalable and reliable app solution. If there is no internal team of developers who can deliver a fintech app then you must hire a fintech development company that has a team of experts and is capable to build a responsive fintech application. Hence, there must be a development team with the following members:
- Backend and Frontend developers
- Project Manager
- Product Manager
- Business Analyst
- Quality Assurance Specialist
The team size is moreover dependent upon your budget, project requirements, and the expected time to market the fintech application. In case there is both iOS app development and Android app development then there will be a required 2 frontend developers. The fintech app can be developed by an in-house team too, but it may increase the expenses and the second way could be outsourcing to a professional fintech development company.
Step 5: Selection of Technology Stack
For building a successful fintech application, it is essential to get a proper tech stack. Based on the type of the application and the features integrated, there is a need for a different set of tools and technologies for the front end and the back end. Each fintech project is different and unique, thus, there is a need for a different technology stack to meet the specific project requirements and goals.
If you choose the correct technology stack, then it also serves as a strategy to reduce the overall fintech app development cost and accelerate the application time to market. There are a few most significant technologies that are used for fintech application development such as Kotlin, Swift, Ruby, C#, Python, C++, and Java. Out of this, for iOS, Swift or Objective C can be used and for Android, you can use Kotlin and Java.
Step 6: Create a Monetization Model
Before the integration of the features in a fintech app, it is essential to check what can be the source of revenue generation. For this, there is a need to create a monetization model comprising the few most appropriate streams that help to generate high revenue and there is a need to identify new opportunities at the same time for the future.
Step 7: Define MVP features
Once the competitor analysis and market research are done, the next part is to find the true purpose of your fintech application and the features that are to be added to the app. There is no need to add too many features rather there must be the ones that are crucial and significant and can make the application more cost-effective, user-friendly, and faster.
The features like two-factor authentication, chatbot, cross-platform functionality, log-in through OTP, and many more should be shortlisted so that the fintech app can serve its purpose. Once the market research related to your product field is done, you need to clarify what all features will be included in the MVP. For this purpose, you can use the Pain and gain map, Prioritization matrix, and many others. Once the MVP version is launched it is necessary to take the feedback from the target audience so that their behavior can be analyzed and based upon their reviews, changes can be made to the fintech application.
Step 8: Cost Estimation
Budget issues that appeared in the later stages can bring unnecessary delays in the application development process. For determining the cost to develop a fintech app, several factors need to be considered such as the tech stack, integration of features, platform selection, maintenance, design, project size, testing, and many more. It is good if the estimation is done before initiating the development process of a fintech application as it will help you to keep things under your budget and meet the deadlines for building a fintech app.
In many places, the cost of development is calculated based on the hourly development rate of the fintech app developers. Outsourcing the fintech app development project is one of the best ways to get access to experienced developers, advanced technologies, and scalable solutions.
Step 9: Launch & Make Improvements
Once a fintech application is developed that does not mean that there is nothing onto worked on. Instead, the development process keeps going on as there is always a need for maintenance and support. Once the app is in the testing phase, the customer reviews are checked and as per the suggestions and the feedback, changes are done in the functionality and design of the fintech application to provide the potential users with a better and improved experience. With time and change in technology, there must be an up-gradation of the processes and features of the application. There must be a quick resolution of all the issues and problems faced by the users while using the application.
Following are the key steps involved in the support and maintenance of the application:
- To regularly update the application to the latest version of the operating system
- To update the third-party services and the libraries that are visible in the application
- To check upon the existing updates and undergo all security checks
- To fix the errors and bugs
- To restructure the existing code but not change the original functionality
Over the past few years, the banking and the financial sector have been buzzing about the fintech-caused disruptions by offering users better alternatives to traditional banking options. The stats stated above shows how the tide is turning and even the traditional and long-established businesses are realizing the huge potential and need for these new technologies. To stay afloat, financial institutions must offer a service that can help users in attaining a seamless digital experience for handling their funds.
SemiDot Infotech offers a perfect balance of quality and price in all its projects. With a diverse portfolio of handling both international and national clients, the company aims to provide scalable and reliable solutions to its clients from all niches. There is a team of expert developers that offers efficient fintech development services to help clients build their dream projects.