Fintech App — how create a unique solution?
Global digital transformation enabled technology to penetrate virtually every area of every known industry around the world. So it comes as no surprise that the financial sector has experienced substantial digital enhancements as well. The financial technology industry, or fintech for short, has emerged to respond to the consumers’ needs for easier, faster, and safer processing of financial transactions.
Fintech Market 2021
The global fintech market size is expected to grow to USD 124.3 Billion by the end of 2025 at a Compound Annual Growth Rate (CAGR) of 23.84%. FinTech market’s growth is driven by the omnipresence of technology and innovation in the market which is helping the financial advisors to come up with new solutions to meet customers’ financial needs. Blockchain can have important consequences for the way in which financial institutions operate. The technological advancements in blockchain technology are expected to increase the fintech market size.The technology is not yet mature and will have to face the challenges of developing a successful business model and regulatory approval.
Types of Fintech Apps
To start building mobile apps for fintech, it’s important to get up to speed on the various branches of fintech that are out there. To determine how to make a fintech app successful, it’s vital to choose the right development direction for it. To help you with these tasks, we’ve listed the main categories of fintech apps. It will give you valuable insight into the current fintech market trends.
Digital payments form the largest branch of the fintech industry. According to Statista, the total value of digital payments worldwide amounts to US$4,769,370m in 2020. Digital payments address the need for cashless, fast, and secure money transfers. Such solutions as online payment systems, digital currencies, and e-wallets help to cover this need. By taking a look at the following popular platforms, you can get an idea of how to develop a fintech app that deals with digital payments.
Digital banking has become the go-to option for customers who need to manage their bank accounts and perform financial transactions quickly and without third-party help. To address these needs, online, mobile, and digital-only banks have emerged. To withstand a growing competition in this sector, traditional banks had to build fintech apps for their customers as well. The N26 and Revolut banks are an excellent example of how to build a fintech app in the digital banking domain.
Digital lending has transformed the process of originating and renewing loans. From simple loan apps and websites to comprehensive automated platforms, digital lending software enables efficient handling of loan requests and effective interaction between lenders and borrowers. So both independent digital lenders and traditional financial institutions make use of fintech advances to improve their business. The following solutions can serve as a guideline on how to create a fintech app for digital lending.
Digital investment platforms allow retail and institutional investors to investigate and to invest in different financial assets. Investment apps are a perfect opportunity to get started on the stock market. Investment management solutions enable users to enhance their investment performance by supplying them with relevant analytics and data. If you’d like to create a fintech app for digital investments, you can check out the following solutions for ideas.
Digital insurance, or insurtech, deals with technologies used in the insurance industry. Its main goal is to speed up policy administration and claims processing. Insurtech also helps to reduce the likelihood of fraudulent activities in insurance claims. Insurtech solutions vary from basic websites offering insurance for just an hour for someone borrowing a car to complex CRM systems. If you consider building mobile apps for fintech in the insurance sector, have a look at the below solutions for inspiration.
Regtech is aimed at solving regulatory issues and challenges by employing innovative technologies. Regtech solutions enable companies to closely observe the ongoing processes and carry out analyses to ensure compliance with regulatory requirements. By automating business processes, regtech also helps to minimize the risk of human error. The following solutions are great examples of regtech apps.
Why Would You Create a Fintech Startup Right Now?
Consumers are adopting fintech at a fast pace. Around 96% of global buyers have at least one fintech app installed on their smartphones. Traditional financial players like banks, lenders, and insurers are also embracing fintech at a large scale. They are all striving to build fintech apps that will help automate and streamline their business processes. From the modernization of legacy systems to identity and privacy management, fintech plays a pivotal role in creating digital capabilities for these institutions.
In the not-so-distant future, every major industry is going to incorporate fintech solutions into its corporate infrastructure. So all kinds of businesses, even those that aren’t connected with fintech in any way right now, will have the opportunity to build fintech apps and profit from them. That’s why building mobile apps for fintech is an amazing startup opportunity you shouldn’t miss.
The fintech industry offers plenty of development directions you can choose from. Artificial Intelligence, Machine Learning, Robotics, and the Internet of Things are just a few of the state-of-the-art technologies used to solve various fintech challenges. If you’ve been wondering about how to develop a fintech solution that will be both effective and relevant, one of these technologies will surely be the solution. So creating a fintech startup promises to be not only profitable but also fascinating.
Technology Stack Trends and Challenges in Fintech App Development
To create a successful fintech app, you should match your business objectives with the right technology stack. It’s also important to know what’s what regarding the major technology trends. When undertaking a fintech development project, take into account the five innovative trends listed below.
- Blockchain is a series of time-stamped blocks of unchangeable data. Once a new block is linked to the chain, its data can’t be modified or deleted. A decentralized approach to data storing takes care of data security. These capabilities make blockchain a highly reliable technology to use in fintech for transparent data transfer and transaction recording. So if you’ve been wondering how your app could ensure transparent and trustful relationships between the users, blockchain technologies could be the answer.
- Artificial Intelligence employs neural networks that are designed to recognize and analyze patterns in the input data. AI proves to be an effective tool for interpreting and recommending actions based on the analysis of real-time data streams. It makes AI applicable to a full range of fintech challenges. For instance, the development of financial advising services or the detection of fraudulent activities. So AI is the solution to the question of how to build a fintech app that’s sharp and reliable.
- Big data is collected from electronic devices of all kinds. Every day 2,5 quintillion data is produced and gathered. With data analytics, this heap of information can provide invaluable insights into business development opportunities. Big data helps deal with the issue of how to create a fintech app that’ll become the only go-to option for its users. With big data, you can anticipate customer behavior and build powerful marketing strategies.
- Microservices are a way to structure an application as a set of interrelated services. In this way, fintech apps turn into distributed systems with decentralized management of data. Solution development becomes faster, as you can simply integrate any required service into your infrastructure. Besides, microservices go hand in hand with blockchain and AI. So following this trend is an important strategic step to reduce the cost to build a fintech app.
- Cybersecurity is an all-time concern of the digital world. Particularly for the fintech apps that store and process sensitive customer data. To mitigate the risks of security breaches and data theft, financial companies should employ various security techniques. Among them are penetration testing, Static Application Security Testing (SAST), Dynamic Application Security Testing (DAST), Runtime Analysis, Automated Regression Testing, Source Code Analysis (SCA), and innovative DevSecOps methodologies. The below table lists the most common threats and risks along with recommendations you can follow to build fintech apps that are more reliable and secure.
If you have any ideas or business plan to create your own FinTech startup or app — feel free to contact us.