The world is at our fingertips now – more people seek quick, easy, and seamless solutions. Covid-19 presented an urgent digital revolution and highlighted the urgency for digitised financial payments.
The FinTech sector has revolutionized and made monetary transactions effortless with more and more companies getting into FinTech app development. Gone are the days when one had to physically go to a bank to get a loan, make a bank transfer or open an account – it can all be done at the tip of your fingertips with the rise of the Financial Technology sector – FinTech.
- What is Financial Technology?
- Types of FinTech Software
- Why you should Develop a FinTech App
- Where financial technology is essential and in-demand
- FinTech Trends
- FinTech Challenges and risks
- Steps to create a FinTech App
What Is Financial Technology?
Financial Technology software [What Is Fintech Software And Why You Should Invest In It?] or FinTech software is now one of the fastest-growing sectors. The term Fintech is an umbrella term for any technology or software that has something to do with finances.
It includes everything from virtual cards, withdrawing cash from an ATM, making a payment via a smartphone and using budgeting apps.
FinTech has become an essential part of our lives as we make several transactions and payments on a daily basis using various apps. Customers now want the options to be able to pick their preferred mode of payment (card, internet banking, upi etc).
All businesses now have to incorporate these modes of payments to ensure their customers get the experience they are looking for and can make payments at ease, whether it’s for a service or product.
A few examples of the applications of Fintech technology include:
- Wealth management
- Online payments
- Personal finance
- Money transferring
- Trading solutions
Types Of FinTech Software
Before you start your FinTech mobile app development, you need to consider what you are trying to solve and how you will solve it and understand what technology may work best for your business and invest in developing a FinTech App that corresponds to your business needs.
1. Digital Payment Apps
According to Statista, the value of digital transactions worldwide will reach $8 billion by 2024, growing at a CAGR of 17% between 2020 and 2024 – making it one of the biggest categories in the FinTech Sector.
Digital payments have made monetary transactions quicker and easier than ever. Even a local coconut vendor now has a QR code for you to scan and pay!
Digital payments have given rise to the era of cashless payments and created an avenue for cashless payment apps. As a business, you can integrate payment processors for quick checkouts and make your customer experience smoother.
Popular digital payment apps:
2. Mobile Banking Apps
Many traditional banks are now offering mobile applications, but few of those apps live up to customers’ expectations. Great mobile banks are present mostly in mobile-first countries, where traditional banks are flexible and users adopt convenient banking with enthusiasm
There was a time when a bank had to have a luxury feel for customers to feel satisfied with the service they were getting with their bank. However, now, customers want ease of use and accessibility.
Many traditional banks are now slowly transitioning into providing their services via a mobile application.
A range of services for customers allows banks to be more competitive and promote additional services, creating new sources of revenue.
Mobile banks usually offer these features:
- Faster money transfers
- Access to 27*7 customer service
- Secure authentication
- Spending trackers and statistics
- ATM and branch locator
- QR code payments
Other services that mobile apps enable are like things like the ability to buy plane or train tickets, order delivery and redeem loyalty points.
By creating a banking app, banking services are more convenient for customers. Always having to visit a branch for every small task can be tedious and time consuming, an app allows customers to reach them at any time and from any place.
3. Digital Lending Apps
Digital lending apps enable customers to loan money via an app. The lenders enabling the loan use digitized data to make decisions on the legitimacy of the borrower. They review a customer’s credit history and based on that lend a particular amount.
Popular Digital Lending Apps in India:
While the above mentioned Apps enable bigger loans to be taken, apps like LazyPay and Simpl are used on a daily basis to make digital transactions for payments on other service based apps like Dunzo, Rapido and Book My Show.
4. Investment Apps
Investment applications provide users with insights into the stock market and enable them to buy or sell shares.
Apps like HDFC Securities, Kotak Securities, Edelweiss, 5paisa, Axis Securities and Zerodha are all great examples of investment apps where you as an investor can build and track your portfolio.
An emerging app in this sector is smallcase – where an investor does not invest in individual stocks, but rather a portfolio of stocks that have been split into themes. For example: if you wish to invest in ‘Rising Rural Demand’, you will get a ready made portfolio.
These portfolios are reviewed and rebalanced every quarter to ensure you get the best returns.
5. Insurtech Apps
India’s share in the global insurance market is estimated at 1.7%, and it is expected to grow to 2.3% by 2030 (Swiss Re).
Insurance applications have made life much simpler – customers no longer have to speak to an agent but can simply place a claim through an app.
According to an article on India Insurtech by MEDCICI: “India has over 110 InsurTech players spread across different subsegments, such as aggregators, claims management, digital-first insurers, software white label and infrastructure APIs, and IoT. InsurTechs are solving the affordability challenge by innovating small-ticket and low-duration insurance products. ‘Bite-size’ insurance, also termed as ‘sachet’ insurance, is growing fast”
6. Consumer Finance Apps
Consumer Finance applications don’t usually provide payment processing services, but rather allow users to manage their finances, plan their budgets and track expenses.
A consumer Fintech App may be built to enable users to synchronize their bank accounts and other payment apps such as PayPal, Google Pay and Phone Pe.
One popular example of a financial tracking app is Splitwise. It allows users to track personal finances, divide their expenses into themes and also allows them to make groups to split expenses if there’s one person paying for a group of people.
Why You Should Consider FinTech Mobile App Development
A report by Insurtech states: India’s insurance sector is expected to reach a market size of $280 billion by 2020 and in the fiscal year ending March 2020, India’s life insurance companies clocked 11.36% growth in their collective premium income at $684 billion.
This creates a great and enormous opportunity to get into this sector.
If your service is in the Fintech sector and you feel like your company’s processes could be optimized, FinTech software is a great investment and an urgent one! You do not want to fall behind your competitors in this fast-paced growth of the industry.
Where Financial Technology Is Essential And In-demand
1. Bank Transformation:
More and more traditional banks are now eager to enter the FinTech sector so as not to fall behind their competition.
A decade ago, customers used to find trust, reliability and security by physically visiting their bank, but in today’s fast paced world where every service is at the tip of a users fingers, the banking sector has no option but to keep up.
FinTech App development essentially solves for 3 (not limited to) key areas:
- Better service: Customers can manage their services online and get 24*7 customer support.
- Branding: The mobile app can be personalized and banks can target their audience better by using various marketing tools.
- Lower prices: A mobile app covers most of customers’ needs, a bank can save money on support and provide more competitive prices.
2. Develop Financial Literacy
The younger generation is now more invested in investing in themselves and planning their future. By venturing into creating an educational FinTech app, you can create value for users by helping them understand, save and grow their capital by providing them with convenient mobile investment solutions, for example, FinTech savings apps.
3. Provide New Financial Services
Though the market may seem saturated – there are still immense opportunities to be explored.
You can explore opportunities in creating FinTech solutions for individuals without credit history, rural India and the unorganised sectors of India where there is little knowledge on such advances in the financial sector and they still turn to the traditional methods of banking.
1. Chatbot banking
Chatbots are a great feature to consider while thinking about building your FinTech mobile app development. The rise of chatbots started with mainly the retail sector, but has spread across to all sectors due it it’s obvious benefits.
Chatbots are beneficial as they provide faster instant answers to customer queries. This instant response is essential in today’s digital world as consumers want services on demand.
2. Biometric authentication
Mobile technology has evolved exponentially and new technologies like Biometrics have been pivotal in introducing a new level of security for users. Users can now use their fingerprint to login to apps and avoid using pins and passwords – making it more convenient.
Biometric authentication is one of the most reliable methods for a person to login – other secure reliable authentication includes voice and face.
3. Machine learning (ML) and Artificial Intelligence (AI)
“Current revenue projections estimate global AI revenue to be at almost US$126 billion in 2025.” Artificial Intelligence (AI) can be used to optimise from the most simplest repetitive task to more complex processes coupled with Machine Learning.
AI and ML can be used for various things like:
- Chatbot support
- Data analysis
- Market research and insights
- Risk Management
By 2024, blockchain technology will become a $20 billion industry!
Though blockchain is one of the fastest-growing sectors with a projected growth to $6,700 million by 2023, growing at a CAGR of 75.2% – there is still a lot of speculation in adopting this technology.
There are several challenges surrounding blockchain technology with respect to regulatory requirements and lack of use cases. As it is still an emerging technology, many countries have no regulations to monitor the sector.
Blockchains in FinTech are great for:
- Clearance and settlements
- Smart contracts
- Identity management and protection
FinTech Challenges And Risks
One of the biggest challenges with going online and sharing bank details is security. Security is one of the most important aspects of FinTech mobile app development – as it involves mainly monetary transactions.
A FinTech app may be great and solve for all your needs, but if it’s not secure and protected from potential breaches – no one will trust your brand, as all it would take is one security breach to kill the trust a user has in your business.
This makes security by far the most important aspect to keep in mind when developing a great financial technology app.
Threats to FinTech software:
- Malware attacks
- Data breaches
- Security vulnerabilities
- Identity theft
Potential Causes Of Security Breaches
- Regulatory compliance
When you start your FinTech app development, you have to ensure you maintain, update and carry out periodic security audits.
One way to ensure your system’s security is with penetration testing. Penetration testing helps you analyze how a hacker would approach your software and what you can do to prevent breaches and protect the entry points to your system.
- Cloud-based threats
Cloud based services are generally considered secure, however, that does not make them immune to breaches and vulnerabilities.
It’s essential that you ensure that you pick a cloud service provider who has a history of being reliable and secure.
- Legacy systems
If you intend to use legacy software – it can lead to many vulnerabilities. It’s important to carry out regular code refactoring, get rid of parts of software that no longer works for your business and release updates.
Steps To Create a FinTech App
1. Choose Your Niche
When developing an app for any sector, one must consider their target audience and what they are solving for, and what their digital strategy will be – as this will depend essentially on your target market and niche.
Ideally, a thorough market research should be done to find out what the gaps in the market are and if the FinTech solution you want to launch adds value to users. For example, there are several budgeting apps, if you decide to launch another one, what will set you apart?
In a country like India with a fairly large rural population, you can explore how you can build something unique to enter those markets with something relevant to a particular problem and need.
2. Comply With Local Regulations
Legal requirements are different in every country or even state or region within a country. When you start your FinTech App development, you have to ensure that you abide by all legal requirements and have a legal advisor on board to ensure your app is in compliance with the law.
In India, there is no specific regulatory body responsible for the FinTech sector, however, the Insurance Regulatory and Development Authority of India (IRDAI) regulates all FinTech companies on a case by case basis.
3. Shape The Concept And Define Feature Set
The first stage of building when developing any app is to establish a vision and goal. You need to know clearly, what are the features you are looking to incorporate into the app and how they will solve for users.
You will also get insights into this by revisiting your market research that would have given you an idea of what the market gaps are.
4. Create Or Outsource To A Development Team
FinTech app development will need a team of experts to make your app a successful FinTech application. By outsourcing, you will have a great team of experts to build you a successful app. The number of people you have on each team will depend on what technologies you want to use, how big the project is and what timeline you’ve for its completion.
You will need:
- Frontend developer
- Backend developer
- Project manager
- Business analyst
- Quality assurance specialist
- Product manager
While hiring your own in-house has its benefits, it will cost you more money and time. As you will first need to recruit the right talent, integrate them into the team and then get them started on the project.
Outsourcing [7 Reasons to Outsource Software Development] your project to a professional development team will solve this for you. By outsourcing, you no longer have the burden of recruitment and can choose a company that already has a team of experts who are on ‘get set go’.
The company you choose will be able to not only work on your FinTech mobile app development from scratch but also maintain it for you.
Hiring your own in-house team of engineers has its advantages, but it will cost you more in terms of both time and money. The recruitment process can be long and tiresome, and local specialists may be more expensive than offshore FinTech developers.
That’s why many FinTech companies end up outsourcing development to professional teams that can create a project from scratch and maintain it after the release.
5. Create a great UI/UX
Creating a great user experience is one of the most important factors when developing an application.
When you start your FinTech mobile app development, you should make sure you have a clear insight on who your core audience is, user roles and build features around your users needs.
It goes without saying that creating a smooth, friendly and easy to navigate experience on your app will improve your user engagement and retention.
6. Build A Minimum Viable Product (MVP) And Test It Live
Develop your MVP and pick a small sector of the target market or even trusted people within your organisation to see how the prototype performs when being used.
Ideally, it is advisable to only release the MVP to a limited number of users and have just some basic features available for the testing.
The main agenda of doing this step to get feedback for your app. A user will be able to give you feedback on errors or bugs that they came across while using the app. Based on this, you can fix those things and polish up the app for release.
7. Ongoing Development, Releases And Support
The development of your app is an ongoing process even after the app is launched. You have to ensure you keep upgrading whenever you get valuable feedback.
When it comes to a FinTech application, you have to make sure you do carry out regular audits, use the latest security softwares to protect your data and ensure your app has no breaches.
Mobile app maintenance also includes keeping your operating systems updated to latest versions, updating libraries and third-party services that you use in your app and updating the legacy parts of your app.
The FinTech sector has taken the world by storm and has created immense opportunities for successful and profitable business.
If you are looking to explore building a Financial Technology Application you have to take into consideration some of the points we’ve explored in this article and try to gage: how to make a FinTech app that will withstand the market competition? What will be unique about your FinTech app, what problem are you trying to address and so on.
By venturing into this sector now, you will have a competitive edge over other players.
Getafix has a team of experts that will help you with your FinTech app development.