Various financial software has been around for quite a while, and its adoption has only accelerated after the spike of the pandemic. Since then, a growing number of financial technology solutions (short for fintech) have been continuously appearing on the market and aiding users in different verticals related to finance.
The opportunities for development in this area are quite impressive. So, we decided to overview the fintech sector, outline why early-stage startups should build a fintech app, and how to approach the matter most optimally.
Innovative technologies have made their way to the financial sector due to the growing demand for solutions that’ll be reliable and would simplify everyday life. It has become one of the biggest global trends in business too. Let’s face it, not many of us still think it’s reasonable to go to the bank and stand in long queues if you can use your smartphone to settle things, right?
This has given rise to plenty of fintech startups that began to emerge worldwide. Hence, financial technology is already actively transforming and modernizing many traditional systems. Here are a few curious statistics:
- According to Statista, as of 2022, more than 65% of Americans use digital banking.
- At the end of 2021, there were over 10,700 fintech startups in North and South America. Interestingly, more than 80 fintech unicorns were from the USA alone in 2021.
- As per Deloitte, the Americas and Asia-Pacific each occupy about 40% of the global fintech market, while Europe, the Middle East, and Africa have the remaining 20%.
- The same report also states that digital payments are the most promising of all fintech segments in terms of size and revenue.
The global investments into fintech companies are also impressive:
- with almost 128 billion USD in 2020;
- more than 226 billion USD in 2021;
- and over 107 billion USD during the first three quarters of 2022.
To compare, only 5 years ago, in 2017, the investment value in the sector was less than 60 billion USD, and a decade ago, in 2012, it was only 4 billion USD!
All these figures make it pretty clear that the field has potential. But what kinds of fintech solutions should startups and aspiring companies go for?
As you might have guessed, fintech applications have made their way to various niches, so let’s overview their different types.
Digital Banking Solutions
Most of us are quite accustomed to using such applications. These often come in online or mobile banking format. They allow a bank’s customers to manage their accounts and make contactless transactions right from their smartphones and other devices.
With everything at a client’s fingertips, digital banking omits the necessity of physically going to a bank. Which actions are at reach? You can issue a payment, convert currency, transfer money, or perform actions like leaving a loan request, getting a new account, or notifying the bank that a plastic card was lost.
Digital Payments and E-wallets
Digital payment systems and e-wallets are used to simplify the process of making online payments quickly and safely. As such, you might have paid for products via ApplePay, PayPal, Klarna, or similar platforms that are commonly used in e-commerce stores. Some solutions, like Payoneer, are supported internationally, allowing for simple cross-border transfers and transactions.
Digital Loan and Lending Applications
Loan solutions, such as Kabbage, are created to facilitate loans between those who give them and take them. Some are targeted at financial institutions like banks and mortgage companies, while others are adapted for regular individual users. Either way, the processes are digitalized and safeguard both parties.
Digital Investment and Trading Applications
Platforms like Hedgeable and Robinhood are designed for investment procedure simplification. They often provide users with guidance on trading deals and stocks; some even include AI-driven advisors. Many solutions also have accessible analytics, making data easy to comprehend thanks to advanced data visualization (thus, users can make better investment decisions).
Personal Finance and Budget Management
As the category name suggests, solutions like Mint are created to assist users in managing their personal budgets. Such consumer apps give you the chance to monitor expenses, track bills, create a plan to save money, watch over your savings, and prevent you from overspending.
Other Fintech Solution Types
Insurance applications, blockchain technology, and solutions for regulatory purposes are also commonly attributed to fintech.
- Regulatory apps like PassFort are created to tackle legal and compliance issues, dial down human errors, and detect risks or fraud.
- Insuretech platforms, such as BIMA, are a way to digitalize the work of insurance companies. For instance, they help process claims faster and more effectively and allow users to see their policies.
- Finally, blockchain technology is also gaining traction and receiving broad adoption. Various cryptocurrency-related solutions like crypto wallets and crypto exchanges, for instance, Coinbase, are often forecasted as fintech’s not-so-far future.
Before we proceed to the question of how to create a fintech app, let’s figure out why you should consider building one in the first place.
- Fintech app development is at the head of the digitalization movement. More and more traditional financial institutions like banks create applications to serve the clients’ needs and live up to their expectations. A growing number of customers prefer to take advantage of performing actions on the go using their smartphones instead of queueing in a bank. Hence, keeping up with the constant changes and the fast development pace is the only option to succeed as a business providing financial services.
- Such transformation also allows for automating and speeding up many operations that usually take a long time if handled manually. For instance, users can save time by making instant transfers from mobile devices regardless of their location, the time of day, or week.
- This, in turn, reduces the employee workload, streamlining various processes. Not to mention that such modernization improves customer service, boosting client satisfaction and loyalty.
- Plus, digital fintech gives the opportunity to introduce new services that may lead to an additional monetary turn. A growing number of users take an interest in trading, blockchain technology, and other ways to invest their money, so they seek convenient and trustworthy solutions.
Because all of this is becoming a “must” rather than a trend, many organizations have to build a fintech app for their customers or improve the solution’s usability, accessibility, and security. So they often turn to experienced third-party development teams to accomplish that or consider purchasing ready-made solutions or SaaS for integration. Similarly, individual users are also on the lookout for optimal solutions, so there’s a chance to hit the B2C market too.
In any event, fintech applications have a wide variety of uses. And, as we’ve shortly mentioned before, this sector is receiving a lot of investment. Therefore, this field has an auspicious future.
Which Challenges Can You Face?
If you’ve decided to develop a solution in this sector, we have to give you a heads-up. There are possible obstacles that you’ll need to overcome.
- You should first and foremost be thinking about how to make a fintech app that’ll be safe to use. You’ll be responsible for keeping sensitive customer data, and data breach is an especially touchy subject that can lead to drastic consequences. Do everything possible to guard your solution from various types of attacks and fraudulent activity, continuously check it for vulnerability, and protect it from data leaks, personal data theft, and other cybercrimes. Hence cybersecurity can be among the most difficult problems to solve as you start to build a fintech app.
- Moreover, many legal regulations have to be taken into consideration. Depending on the type of solution built, you’ll need to keep an eye on legal compliance and all the ensuing peculiarities, especially if you’re going on an international scale.
- Thirdly, as you might expect, fintech is a rather competitive market, with many big names already offering their solutions. Since money is at stake, getting people to trust you and your brand may also be a challenge.
There are numerous ways to approach fintech application development, as no two solutions are the same. There will, of course, be differences in functionality based on the type of app, its aims, and the problems it’ll solve. The MVP development cost will also heavily depend on app complexity. But let’s go over some of the most common features and often chosen tech stack.
Standard Fintech Application Feature Set
Generally, fintech apps have most of the features we list below.
- Log in or sign up (in most cases, modern fintech solutions use two-factor authentication or biometric solutions like face or fingerprint scanning for safety reasons);
- A user dashboard (ideally, an intuitive screen layout with all the necessary actions a user can take);
- Standard operations and a payment gateway (this is the functionality allowing users to perform actions in the application like making online payments, money transfers, etc.);
- Action confirmation (with this functionality a user can confirm an action like issuing a payment by entering a PIN, typing or graphically drawing a password, or via biometric confirmation);
- Automated repetitive action features (allow users to automatically issue routine payments instead of doing so manually every time);
- Push notifications (send reminders to notify a user about vital information, updates, or occurring changes);
- QR code and card scanning (gives users the opportunity to scan codes or plastic cards to facilitate completing specific actions);
- Digital assistants (sometimes applications have chatbot functionality that allows an AI-based assistant or real customer service staff to reply to user inquiries);
- Customization opportunities (personalization makes it easy for users to modify the layout, theme, or settings according to ther preferences);
- Security features (data safety in the fintech sector has utmost importance, therefore, various cybersecurity features are implemented to prevent hacks, unauthorized actions, data theft, and leaks).
Possible Tech Stack for Fintech App Development
As regards the technology stack, you have to understand that the options will differ based on the type of fintech solution you want to create and what it’s going to be in terms of the developed end product. For instance, even if you decide to prioritize mobile users, there are different types of mobile apps that you can build (a native application, a hybrid solution, a web app, a progressive web application, etc.). If you’re planning to make the solution usable from other device types (say, smartwatches), then you’ll need additional development effort for IoT adaptation.
As you see, there may be various paths to follow. You'll most likely need to combine various technologies to build a fintech app that’ll achieve your goals. Below we list the commonly chosen options:
- Server: AWS, Google Cloud
- Web development frameworks: Angular, React, Vue
- Mobile development frameworks: Ionic, React Native, Flutter, Swift, Kotlin, NativeScript
- Database: MySQL, MongoDB, PostgreSQL
- API: Apex, Twilio API
- Payment gateway: Stripe, PayPal, Braintree
So, how do you start building a fintech app? Let’s go over the process step by step.
Step 1: Define What You’re Going to Create
First things first, decide on the fintech category of your future product. Is it going to be a trading app, a banking solution, or something else? Who are your potential clients (companies, individual users, or both)?
At this point, you need to figure out what is your main focus, including the target audience and its needs. Try to find answers to questions like:
- why did you choose this niche;
- why what you have in mind is relevant;
- how will the product effectively solve user problems.
You should also think about how you’ll bring the chosen fintech solution to life. That is, whether you’ll be building a native mobile application, a hybrid solution, etc. These are all vital parts of the idea initiation stage that can take you one step closer to finding product-market fit.
Step 2: Competitor and Market Analysis
Now, it’s time to do research and prove that your assumptions are worthwhile and the idea stands a chance. Going through the discovery phase will also help you get prepared and become more organized. So, proof of concept (POC) is the next thing to work on when creating the concept.
Conduct market research to get a better understanding of the market’s current state and saturation. Also, browse the competitors and the existing solutions already out there, noting their strengths and the points you can implement better. Keep an eye on how your hypothetical competitors monetize their fintech apps. Do they charge transaction fees, use subscriptions, or opt for other paths?
Step 3: Compliance Research
Studying the legal aspects is among the most scrupulous tasks. You have to build a fintech app that won’t have any compliance or regulatory issues. This means that you must bear in mind the laws and restrictions that apply to the fintech sector and be aware of the possible differences if you target several countries.
Step 4: Planning the Technical and UX/UI Sides
Deciding on a feature set isn’t easy, as you most likely won’t be putting the entire scope in production from day one. It makes sense to invite developers, designers, and other domain experts to brainstorming sessions. This way, you’ll get more opinions on how to proceed with your fintech app development most optimally.
As such, you can:
- decide on the tech stack and how to cut corners (for instance, when choosing between using custom or off-the-shelf software);
- work on feature prioritization and shortlist the top functionality that’ll be present in the minimum viable product and consequent releases;
- create technical requirements, a development timeline, and plan.
Most importantly, since fintech apps hold even more responsibility for keeping sensitive data than other application types, you’ll have to think through the security aspects in detail to safeguard the solution from data loss.
The UX/UI designers can, in turn, shed light on how to make the application intuitive and appealing for the users. At this stage, they create wireframes and prototypes that you can click through and test to iron out the “wrinkles” before the design is passed on for further development.
Step 5: Create the MVP and Launch It
Once the detailed plan is lined out and the designs are ready, you can move on to MVP development. After the product is brushed up and has gone through thorough QA testing, launch it to get your first users and their feedback, and proceed to MVP validation. Notably, you won’t only handle support and maintenance after the release and may move on to building other features, further app expansion, and improvement.
Upsilon has extensive and considerable experience in providing mobile app development services, including in the fintech sector. We’ve helped aspiring startups and established enterprises create fintech solutions, and we’ll be glad to provide you with a consultation and our assistance.
It’s very tough to give an estimate of how much a fintech app will cost, given that they may drastically differ in development complexity. Yet we’ll gladly make a project cost estimation if you share your project ideas with us!
We know how to build a fintech app that users will love. So, if you don’t have a team of your own or are searching for a reliable partner to help you bring your vision to life, Upsilon can assemble a dedicated software development team from our expert talent pool to work on your project.
Creating a fintech app is by all means tough. The sector is highly regulated legally and puts security before everything else. But if you decide to move in the fintech direction and incorporate modern solutions to build something truly worthwhile, all the hard effort can be rewarding. Fintech offers many directions to move in and provides unrivaled opportunities for startups.
If you’re still not sure how to develop a fintech app optimally, you’re more than welcome to contact us. We’d be happy to help you create the solution you have in mind, regardless of development complexity. We use sprint-based pricing and have a flexible team of experienced specialists.