Most fintech startups struggle to become profitable. According to the 2020 Google Cloud’s fintech Focus Report, only 6% of financial services break even. But you can improve your chances of creating a successful platform. There’s no secret: you only need to build a fintech product around the customer’s needs using the right tools.
If you want to create a fintech app your users will love that adheres to regional regulations, Relevant is here to help. We’ve developed many fintech applications, including a mortgage app for UK’s FirstHomeCoach, so we can give you some tips on what to do and what to avoid in the process of developing a fintech product.
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Financial services that don’t comply with governmental regulations are doomed. So, if you’re serious about developing a fintech app, your first step is to understand local policies.
For thorough researching, we recommend:
This should give you an understanding of the existing restrictions, conditions, risks, and licenses. Now, let’s take a look at the regulations that exist in the biggest fintech markets.
Fintech businesses in the US adhere to federal and state laws. As for the nationwide regulations, you should study the following documents:
The European Union has many laws that apply to different types of financial services. The most widespread regulations are:
The United Kingdom doesn’t have a unified regulatory framework for fintech companies. Therefore, financial SaaS companies must evaluate their business’s type, scale, and size to understand if it falls within the regulatory perimeter.
There acts you should examine are:
Policies in these regions are constantly changing to keep up with the evolving fintech market. Now, let’s see how the fintech environment looks today.
“Blockchain will fundamentally change financial systems… It will be applied in many areas because it is about trust, credit, security and the privacy of data”Jack Ma, founder of Alibaba and co-founder at ANT Group.
The financial technology market keeps evolving, prompting more companies to try out innovative solutions. Let’s look at the most important trends that could influence your approach to fintech product development.
The fintech landscape is currently driven by AI and automation. These trends are universal for all types of financial technology applications.
You can learn a lot about fintech by researching other apps in the industry. This would help you incorporate the elements of successful apps and identify useful features your competitors may lack.
Now, let’s look at different types of fintech apps and some of the most successful ones in each category.
Online payments are undoubtedly the most popular category of fintech. Thanks to the advancement of payment gateways, digital money transfer, and currency exchange have become the norm for businesses and consumers worldwide.
If you want to see what kind of functionality users come to expect from a fintech product, just look at the most popular digital payment services.
Lending and mortgage apps are prime examples of how fintech makes some businesses easier and more transparent. The traditional money lending services are tedious and needlessly complicated for a modern user. Now, innovative lending and mortgage software automates most time-consuming tasks and checks with credit bureaus, speeding up the process drastically.
Lending and mortgage services:
Digital-only banks are an excellent option for fast transactions and seamless fund management from your mobile device. Unlike traditional banks, you don’t even have to leave your house to create an account and deposit funds.
Online banking services:
With blockchain on the rise, many financial organizations are doubling down on cryptocurrencies. It also helps that the crypto transactions are anonymous, swift, and, most importantly, lie outside of governmental regulations.
RegTech refers to regulatory software that allows fintech companies to analyze regional policies. These platforms automate the monitoring processes and minimize human error. Needless to say, they are handy for multi-regional apps.
Investment services and stock trading apps allow consumers to invest in financial assets. Furthermore, some of the key features of these apps include data analytics and recommendations for investments.
Digital insurance services are designed to attract customers with mobile apps, data science, and other time-effective solutions. Getting insurance online is the preferred choice for most users who desire to speed up the otherwise excruciatingly slow commission process.
Personal finance services are useful for budget management and planning. This category of apps is trendy among the general public because it helps analyze expenses and forecast investments. You should check several personal finance apps to see what features customers expect from a contemporary fintech platform.
Personal finance services:
Crowdfunding is a popular way to raise money. The low-risk nature makes crowdfunding platforms the desired funding choice for startups. These services usually have an easy-to-use UI, investment charts, a detailed payment history, and a comment section to keep funders engaged.
Despite a wide range of categories, these apps share similar features users expect to see.
Looking to attract a bigger user base? Here are the features worth adding if you want your fintech app to meet consumer expectations:
Now, how do you build a fintech product that people would want to download? Let’s look at the process up-close.
We recommend following our proven methodology to combine your unique offerings and basic features into your product.
Here’s the deal: the more complex the software project, the more time you should dedicate to research. In such a multi-faceted industry as fintech, the research phase should be your top priority.
Before you start a fintech product development, you need to study:
Calculating expenses and time-planning won’t be precise without a team.
The finance industry is about adapting to evolving customer needs. Your technology stack should reflect these ideas and allow for flexibility during development. But what programming languages should you choose?
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The cost of development will immediately rise when you decide to build apps for several platforms at once. If you have doubts about the tech stack, hire tech consultants or outsource the development to a dedicated team with experience using the right tools for cross-platform financial app development.
Find professionals that can build a successful fintech product. Ideally, your developers should have experience with fintech apps, an appropriate tech stack, and communication tools.
How can you find a team that has the necessary skills and expertise? There are several approaches you can take.
First of all, you can assemble an in-house team. However, you’ll have to do the headhunting, interviewing, and vetting.
Secondly, you can outsource a remote team. This option gives you access to a large pool of talents and allows you to save operating costs. But the communication and management can become a bottleneck if you haven’t worked with remote teams before.
Finally, you can hire dedicated software development teams. This option allows you to enhance your software team with business analysts, UX/UI designers, front-end and back-end developers, testers, a project manager, and a product owner. It’s the most flexible option for long-term projects (fintech apps certainly fit the description).
A reputable software development vendor can assemble a committed team of vetted professionals to complement your crew. With Relevant, you can start building a fintech product with a dedicated team in just two weeks.
You need to check if your potential customers are interested in your fintech app before you start full-scale development.
An MVP (Minimum Viable Product) is a prototype version of your product with barebone functionality. Putting together an MVP will help you test your software at the early stages of production. As a result, you’ll have more analytical data to get rid of the unnecessary features and focus on what your customers really want.
People expect fintech apps to include features like basic transactions, budgeting, bill tracking, chat support, and integrations. Even if you choose to build your features from scratch, you still need to make sure your app supports third-party APIs (Application Programming Interfaces).
After all, financial services are built around user experience, and your customers want your app to work with their favorite SaaS solutions. It’s equally important to make the integration seamless and secure.
Your app will collect financial, personal, and other information about customers. As such, data leaks can have severe financial and reputational implications for your company.
It’s therefore necessary for your team to understand data protection regulations, policies, and best practices for secure fintech product development. Some of the most effective solutions include:
You can adopt the DevSecOps methodology to make cybersecurity a part of the software development process from the start. But here’s the deal: this approach requires expertise and appropriate tools. So, it might be better to seek an experienced vendor that leverages the latest fintech app security solutions.
User experience and design are the core elements of a fintech app. You need to make sure every feature and interface element provides value.
If you want to maximize revenue, you should target all users, including the service provider and end-customers. For example, if you’re making a money lending app, there will be two parties: a loaner and a loanee. You’ll get more customers by creating interfaces for different user categories (like Upwork did). And even if you’re focusing on B2C services, it’s important to build the app with the possibility of a B2B interface in the future.
Continuous testing is mandatory for software development, but it’s not enough for a successful launch. That said, there’s a proven way to improve your product before delivery.
It’s easy — start a close Beta test for backers or potential test groups. Actual feedback from customers can help you smooth out the rough edges in your app. Of course, you should take measures to secure your private data. So, make your legal team prepare legal documentation and NDA (Non-Disclosure Agreement) for testers.
Product release is just the beginning. As you know, fintech is a constantly changing market, so you should be prepared to maintain and upgrade your app throughout its life cycle.
As you can see, navigating through fintech development is challenging. However, you can streamline the process with the right person at the helm.
Communication is the defining factor for a project’s success. And we don’t mean just your team — it’s also about the link between your app and the customers.
The financial technology sector has many pitfalls. However, you can avoid them if you hire a product owner who knows how to start a fintech company and lead it to success.
An experienced product owner will understand governmental regulations, help outline the target audience, and allow engineering and testing teams to maximize their productivity. In other words, they will define the product’s goal and manage the development process.
Do you want to reduce the risks and speed up the production even further? You can achieve this by outsourcing development to a reputable company.
FirstHomeCoach is a UK-based firm that helps people acquire new real estate property. And it was Relevant that took on the development of the mortgage app for this company.
Our team had thoroughly researched the market to find out what customers wanted. The project manager helped find and vet the right talent for the team and picked the appropriate development methodology to speed up the production. The result was value-driven software that guides users on every step of the buyer’s journey.
The app works as several independent modules:
This is just one example proving that Relevant provides professional fintech software development services for companies all over the globe. We have the necessary tools and expertise to create a custom platform for your business needs.
An average fintech app can cost from $20,000 to $150,000. Several factors affect the final price, primarily:
As we discussed, starting a fintech company with an in-house team is the most expensive and time-consuming option. Outsourcing is a more cost-effective solution, but the price will depend on the developer’s location. For example, an hourly rate for developers in the USA ranges from $120 to $150. In contrast, companies in Asia charge under $30 per hour.
If you want to access one of the world’s biggest IT hubs, consider hiring a Ukrainian software development company. World-renowned platforms like SkillValue and HackerRank rank Ukraine’s outsourcing market among the world’s best.
And here’s the kicker. An innovative fintech app developed by a Ukrainian team will cost you about $40,000, while the US company might deliver the same quality for nearly thrice as much.
The adoption of fintech keeps rising along with the demand for easy-to-use online services. What do you need to make your project successful? First, understand policies, requirements, and the user’s expectations, and second, know how to build a fintech product around your idea.
Relevant has the necessary resources and experience to craft a proprietary app that will meet your needs. Get in touch with us to learn more about app development and regional regulations.