Investing in Developing a Fintech Software – When, Why & How

Introduction

Technology has transformed the way we do things – our daily activities, workout apps, smart watches, smart appliances and so on. Technology has become an essential part of how we function as humans. The age of mobile phones has peaked, compared to before – a larger part of our population now has access to smartphones. 

Ola, Uber, Swiggy and Dunzo services all need the working class to understand how a smartphone functions and how monetary transactions work for these services that are used on a daily basis. 

One major technological advancement has been in the financial sector. Financial technology/Fintech software has reached a large part of our population. Today, even a local coconut vendor or a florist around the corner of the street has a printed sticker with ‘Google Pay’, ‘PhonePe’ or Paytm’ written on it with a giant QR code. [Features That Make Payment Apps Like Paytm & PayPal Successful]

Contents

  1. Growth And Need Of Financial Technology Software (Fintech Software)
  2. Businesses That Should Consider FinTech Software Development
    • Personal Finance
    • Insurance
    • Trading Platforms
    • Online Banking 
    • Money Transfer
    • Equity Crowdfunding 
    • Regtech
  3. Advantages Of Investing In Fintech Software Development
    • Price
    • Faster Services 
    • Accessibility
    • Personalization and Customization
    • Improved Efficiency
    • Scalability
  4. Why You Should Consider Outsourcing To A Fintech Software Development Company
    • Access To Technology
    • Focus On Core Business
    • Cost Reduction
    • Time Optimization
    • No Acquisition Of Tools And Development Licenses
    • Experienced People On Board

Growth And Need Of Financial Technology Software (Fintech Software)

The FinTech sector in India is expected to increase at a CAGR of 20.2% during 2017-21 to reach $92 bn.

According to Invest India – “In 2020, online transactions grew by 80% in India as compared to 2019 and India will contribute 2.2% to the world’s digital payments market by 2023, and the value of such transactions is expected to reach $12.4 tn globally by 2025”

In the new era of (almost) post Covid-19, the world has become contactless. Customer engagement is now more digital than ever. Face-to-face or touch point interactions have been restricted, forcing the world into a whirlwind of digital transformation.[Digitize Your Fintech Services | The 4 Important Rules]

Banks and other financial institutions have had to pull their socks up and adapt to strategically incroperating FinTech software for their business to make sure they don’t fall behind their competition. 

Other than banks, another sector that is accelerating the urgency of innovative FinTech software solutions are MSME’s. In India, MSME’s are a key player in economic development and creating employment opportunities. 

The International Finance Corporation (IFC) estimates that 65 million firms, or 40% of formal micro, small and medium enterprises (MSMEs) in developing countries, have an unmet financing need of UDS 5,200 billion every year, which is equivalent to 1.4 times the current level of the global MSME lending”. 

MSME’s to a large extent depend on Non-Banking Financial Company (NBFCs) services powered by FinTech to meet their credit needs. This creates a huge potential to get into the FinTech software development services sector.  

Businesses That Should Consider FinTech Software Development

Personal Finance

Personal Finance apps like Walnut, Monefy — Expense Tracker and Goodbudget (Budget App) are popular personal financial management apps that allow users to track their monthly expenditure and keep check on their personal finances. 

These apps come built in with a variety of customizations like multi-currency support, built-in calculator, synchronization, widgets and reports/graphs. 

So, if you are a start-up looking to venture into the personal finance sector, you need to turn your attention to FinTech software that will help you build a product that makes tracking personal financing simple and hassle free. 

Source: Statista

Insurance 

Getting insurance for anything sounds tedious, sounds like paperwork and standing in long lines. But it no longer is the case with the rise of the potential of Fintech software to close this gap. 

More and more people want complex things like getting insurance made simple and easy. If you are an insurance company then we would say getting on top of the FinTech game should be your goal. 

By using FinTech software you can create a better customer experience, reduce the costs and be more accessible to more people. 

Source: Statista

Trading Platforms

Trading platforms have become popular among the upcoming youth who are more financially literate and want to plan their future for financial independence. 

This creates a great opportunity to build a FinTech app that has great UI/UX, is secure, has great financial solutions and investment opportunities. 

Online Banking 

If you are a bank and you haven’t already invested in FinTech software development, you are already losing the race. Online banking powered by FinTech software is essential if you want to keep your customers engaged and be accessible to your customers from anywhere at any time. 

The age of traditional banking is coming to an end and people want all services to be digitally available. 

By investing in a FinTech app development you can make all your services available to your customers on a single platform, have 24/7 customer service via chatbots, show account details like monthly expenditure through graphs etc. 

Money Transfer

Peer-to-Peer money transfer is now seeing a higher demand. However, money transfer platforms have to comply with strict payment regulations and data privacy laws and should be built with specific functionality that will ensure the best user experience. 

Essential functions to consider if you plan to create a money transfer FinTech app: 

  • Online ID check: Run KYC verification when sending money over a set limit to make your clients feel protected.
  • Multilingual interface and support: Be more inclusive and reach a larger market 
  • Notifications and alerts: Keep your user informed via SMS, emails and push notifications. To make sure they are aware of all activity surrounding their account. 
  • Payment statistics: By creating visual representations like charts and graphs a user can analyze transactions by volume, receiver, status, country and keep better track of incoming and outgoing transactions. 
  • E-wallets: makes payments and monetary transactions effortless anywhere and anyplace. 
  • Mobile top-ups and utility bill payments: create additional revenue by including such features by allowing users to pay bills to earn loyalty points or cashback. This will help you engage your user and increase retention by increasing the scope of your app. 

Equity Crowdfunding 

For businesses in equity and crowdfunding – FinTech software is essential. Equity crowdfunding for many small businesses and startups is a major source of raising capital for their service or product development. 

Crowdfunding has now become a lucrative medium for many startups as the global pandemic has created a huge credit crunch and no one is willing to invest a large amount of money in an upcoming business in turbulent times. 

Regtech

Regulation Technology uses Big data, computing and machine learning to create savvy FinTech apps. 

Regtech has so far seen seen advancement in:

  • Risk data collection
  • Monitoring payment transactions
  • Identification of clients
  • Legal persons
  • Trading in financial markets

Advantages Of Investing In Fintech Software Development

Price

A key aspect of FinTech is, with each new innovative solution and development comes a potential in cost reduction for the business offering the service and in turn the user. 

AI and ML algorithms have become more and more intelligent with algorithms built to be able to judge things like lending risk more accurately, automate processes and learn user behavior. 

Neobanks offer financial services that are provided through apps and have no physical infrastructure. This means, such financial services can offer better and more competitive interest rates as they don’t have to account for the overheads of maintaining a physical branch. 

So, by investing in FinTech software development for your service you can maximise your cost reduction. 

Faster Services 

Online lenders and digital financial services can offer same day lending, for example, Simpl and Lazy Pay are credit apps which an user can use immediately to make payments and pay the loan back at a later date – this is only possible due to the FinTech software development. 

Consumers now want on-demand services and that applies to the banking and personal financing sector as well. There is a high demand for instant services that are easily available via an app. 

As a business you can leverage AI and ML powered FinTech apps to get insightful details on your user behavior and expectations to ramp up your services. 

Accessibility

India has about 190 million unbanked adults, i.e. those without a current or basic bank account or participate in the formal financial sector. 

The exponential growth of FinTech software development brings in new opportunities to increase accessibility to such populations. 

Furthermore, there is transparency, reduced costs and improved financial literacy by making FinTech apps more accessible. Fintech is helping to ensure that information is at a consumer’s fingertips. 

Personalization and Customization

By investing in FinTech software development you can give users a more personalised experience. 

Although there is reduced activity with respect to human interactions where an agent could say or do things to make a customer feel special, even without that agent – customers still want to feel special and understood. 

By understanding exactly what your customers need and want, you can provide customized solutions to cater directly to them and meet their expectations. This makes it more likely for them to remain loyal in the future. 

Customised FinTech software can utilize the latest data analytics methods to examine consumer data and create the tailored services. 

The use of artificial intelligence (AI) technology can also be used to create more personalized products to enhance your customers’ experience with platforms like mobile apps, online banking, and loyalty programs.

Improved Efficiency

FinTech software development can be customised to your business needs to help you 

improve your company’s efficiency in a number of ways: 

  • AI-assisted chatbot programs: Chatbots can handle customer inquiries quickly and accurately, even outside business hours – giving your customers on-demand service and assistance. 
  • Cloud computing: You can reduce infrastructure expenses, resulting in more streamlined and cost-efficient operations. 
  • Custom projects: Developers can address user design, quality assurance and data privacy features when for custom fintech software development – so you won’t need to spend time addressing those issues after the product is completed.
  • Robotic Process Automation (RPA):  maximizes operational efficiency by allowing investment robots to perform repetitive tasks freeing up your in-house providers to focus on more specialized and strategic activities.reeing up your in-house providers to focus on more specialized and strategic activities.

Scalability

The ability to expand, grow and adapt to changing needs is an essential factor to keep in mind when building any business. As a business grows, your software must grow with you – quickly and easily. When it can’t, you’re likely to encounter performance problems and negative customer experiences.

When you opt for custom FinTech software development, developers can develop the FinTech app to allow for future growth or service expansion. They can utilize scalable technologies right from the start, so you get products that will handle both your current and future needs.

Why You Should Consider Outsourcing To A Fintech Software Development Company

Outsourcing is a great way to stay on top of your game. Here are a few things to think about 

when exploring FinTech software development and looking for a FinTech software development company. 

Access To Technology

Technology is changing rapidly and you will need to stay updated with upcoming technology trends to keep up or stay ahead of your competition. 

While you could recruit and hire an in house team to develop your FinTech software, recruitment can be a long and tedious process. Furthermore, you’ll have to make investments in finding people to develop specific technology. 

By outsourcing your FinTech software development team, you as a business are instantaneously equipped with modern and innovative technologies with developers who are savvy with using it. 

As mentioned, development teams are always focused on development that is focused on getting the best outcome. Therefore, they will always seek the best approaches and tools to improve the processes and systems developed. 

You as a business will not need to invest exorbitant amounts of money to have access to suitable technologies and can enjoy its benefits via outsourcing. 

Focus On Core Business

Another major advantage of outsourcing your FinTech software development is – you as a business will have more time and your in-house talent can focus on core business projects and tasks. 

Your employees can focus on business strategy related issues and contribute better to growth. While the external teams sole purpose is to ensure they concentrate on the main service they provide.

Cost Reduction

One of the major benefits of outsourcing FinTech software development is – resource savings. By outsourcing, you don’t need to think about any specialised equipment you have to buy or think about paying for software licences, the specialised team will have that covered for you. 

This saves you a lot of money which can be invested in other aspects of your business. 

Time Optimization

Time is money. Having a specialized team will help you propel your core business strategy to  generate quick agile results with consistent quality. 

This makes it possible to meet higher demands with certainty that the processes will be predictable and reliable as the external team will be 100% focused on developing your FinTech solution.

As you have an external team investing time in the development process, this creates more time for internal management and you will need to dedicate less time and attention to solving IT, product and technical issues related to the project development. 

No Acquisition Of Tools And Development Licenses

Software development requires essential development tools and licenses. As technology is constantly evolving, more tools and new licenses get released and need to be acquired. 

By outsourcing your FinTech app development to a fintech software development company you do not need to worry about tracking licenses expiring and wondering what tools are essential to invest in – you vendor will take care of all the tools and licenses. 

Experienced People On Board

Outsourcing your FinTech software development gives you the ability and flexibility to hire qualified experts who specialise in developing the software you need with the elements and functions you need. 

Recruitment is becoming more and more difficult with the increasing demand. Outsourcing almost completely eliminates this problem while providing you with the best professionals.

Think Globally

Outsourcing your FinTech software development gives you an immense opportunity to hire experts from all around the world. This not only gives you access to a large pool of talent, but also can help in cost reduction. 

For example, if you are a business based out of the USA or Europe and you outsource your FinTech software development to team of experts in India, the currency and average wage works out cheaper as you have to match the industry in India vs your local country, which may have higher wages for the same service 

Conclusion

By partnering with developers and outsourcing your FinTech software development you will be able to get customised software tailored to meet your demands. You will have access to the latest technologies and be able to provide your customers with a secure and personalized experience.

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