The FinTech sector is undergoing a lightning-fast transformation with each passing year. Every day, we witness a plethora of groundbreaking solutions making their way into the market. For aspiring entrepreneurs like you who seek to launch their Fintech products in this highly competitive sector, it is crucial that you have a solid software idea that is unique yet practical.
Yes, you heard it right, to stay in the race, your idea should be solving a problem that most people are facing in the finance and banking sector.
Although you can consider developing a product that is already there in the market but make sure you are not copying it partially, your product should have some unique features that attract users to use your product. Otherwise, it will be difficult for you to stand out. The intensity and unpredictability of this industry demand nothing less than the very best.
Furthermore, in order to develop a FinTech solution in 2023 that stays at the top, you require
1. A better understanding of the latest technologies,
2. What's new in Fintech development trends?
3. Regulations that govern the industry
Besides, there is much more stuff you can keep your eyes open for developing your FinTech solution. However, to get the process on the route to success, we have completed a list of 9 tips for you.
These Fintech software development tips cover everything from staying up to date on the latest trends to understanding the legal landscape surrounding FinTech solutions.
Important Tips To Develop a Successful Financial Technology Solution
1. Understand your customer
To understand your customer, you first need to understand the market you are working in i.e., Fintech market. This is because it will let you know whether investing in it make sense or not. So, let's have a glimpse of it:
As per the recent study, is it easily visible that the global fintech market hit a value of approx USD 194.1 billion in 2022. Besides, in the same report, experts say, it is expected to grow in the forecast period of 2023-2028 at a CAGR of 16.8%. That means it may hit USD 492.81 billion by 2028.
- A slight over 1% market share is held by Fintech in the global financial sector.
- In 2021, it has been seen that over 100 million people used proximity mobile payments.
- Retail payments are a colossal force that they make up a whopping 25% of the entire fintech market.
- In the coming years, AI will increase labor productivity by up to 40% in the fintech industry.
Now, getting back to your concern-development of a successful fintech solution. In that process, it is a good idea to understand the needs and wants of your customer. This step is always the foundation of any financial service product. Knowing:
- Who your target market is,
- Their demographics,
- Their pain point
will help you figure out what type of fintech solution you should launch in the market. Then research your competitors and look for gaps in the market. Make sure your solution is the best fit for your target customers. In short, listen to your users.
Have a survey with your target audience, as some users are really vocal with their opinions. They will let you know what they are and what you should avoid in your product. This will help you not spend unnecessary amounts of money & time in developing something that your customers will not use.
2. Use the latest technology
The digital world is not consistent and stable. It keeps changing. If you rely on old tech, you might have to lose the customer base. Keeping your product up-to-date with the latest technology has many benefits. Some of them are:
- Improved customer experience
- Enhanced financial services
- Better engagement of the product
- Increased operational efficiency
From big data to artificial intelligence to machine learning to blockchain technology, there are many new technologies that are taking over the world of the finance sector.
Trend, Description And Benefits
1) Artificial Intelligence and Machine Learning
Used for financial decision-making, security, and fraud detection, customer service personalization, and asset management
Better financial decision-making, improved security, and fraud detection, personalized customer service, and improved asset management
2) Blockchain
Utilized for secure and swift P2P payments, crypto trading, regulatory compliance, and establishment of digital identity
Example: Cryptocurrency, Non-fungible tokens, or NFTs, Smart Contracts
Secure and fast payments, easy crypto trading, compliance with regulatory requirements, and validation of user identity
3) Microservices
A software development trend that uses small blocks of stand-alone services
More freedom in building small and large applications, frequent upgrading of developed solutions, and quick time-to-market
Furthermore, with respect to creating an effective and efficient FinTech solution in 2023, it is vital that you are making use of the latest technologies, If you are struggling to find the right technology-what to use, what not to use, hire a professional
Fintech software development company to assist you in evaluating which tech stack would serve best to your specific needs.
3. Security of the product
With so many possibilities to get scammed in this digital world, data security is of utmost importance in Fintech development. As this industry deals with the personal data of customers, payment processing, and banking, you can't take risks.
You should ensure your Fintech application is secure internally and externally. By internal, we mean, the code is encrypted, the database is secure, and sever is probably using an SSL certificate.
Here are some tips to help you build a secured Fintech application:
Options And Key Points
Data encryption
- RSA, TwoFish, and 3DES are different data encryption algorithms
- Tokenization is an alternative method to encryption
- Tokenization provides data with a unique key
Secure authentication technologies
-Use OTP system for an added layer of security
-Monitor login activity to detect unauthorized access and block suspicious activity
-Time login sessions to limit potential hacker access to data.
-Implement regular password changes to avoid security breaches
DevSecOps
-Cybersecurity is the core element of DevSecOps.
Testing
-Penetration tests
-Quality assurance
-IT security audit
4. Learn Various Laws and Regulations:
You definitely don't want confidential financial data falling into the wrong hands. That's why regulations are necessary in the fintech world. If you're involved in this industry, it's critical to familiarize yourself with the most important laws and standards governing fintech. Trust me, this is not something you want to take lightly. Here are a few of the laws and regulations that you can check.
- General Data Protection Regulation (GPDR)
- Regulation on Electronic Identification and Trust Services (eIDAS)
- Payment Services Directive 2 (PSD2)
- Financial Conduct Authority (FCA)
- The Act on the Protection of Personal Information (APPI)
- Personal Information Protection Act (PIPA)
5. Choose The Correct Platform And The Right Team
Ensuring the longevity of your Fintech product requires careful consideration of the platform and technology you employ to develop your application. Your users expect nothing less than a top-notch user experience with security.
Striking a balance between meeting your users' demands and building a backend tech stack that can communicate with traditional institutions is vital. Besides, it is also important that your team is highly experienced.
Building a software development team of skilled and diverse individuals who can bring fresh ideas to the table and lead the development of your application in a direction that guarantees success is also critical.
6. Focus on design and user experience
Extremely loud colors or exotic fonts will only do harm to your solution. You should never try to put the application to be excessively flashy and imposing.
In simpler terms, plan your UI in such a way that you would feel comfortable using it personally. Hire UI/UX developers who have a better understanding to play with colors, page navigation, fonts, and more to offer a smooth user experience to your customers.
In the current digital market, customer experience reigns supreme. If your fintech solution offers a top-notch user experience, customers will be more prone to utilize it and advise it to others.
7. Responsive
User preferences, needs, and even physical abilities will influence how they interact with your application. If you're working on software development for financial technology, it's critical to explore as many potential devices as you can. Bear in mind that your users are as diverse as their devices.
From mobiles to desktops, there's a wide range of devices out there, and they all differ in terms of screen size, functionality, resolutions, processors, etc.
8. Have a go-to-market strategy
Do you know there are more than 6 billion smartphone users worldwide? But how many of them are using Fintech apps?
Well, the statistic says that by 2023, only 1.31 billion people will be using mobile payment services. Which is a very small number compared to the number of smartphone users.
The reason for this less number can be many, among which the major one is the lack of awareness. Yes, if you are not marketing your FinTech app properly, it is quite difficult to make a maximum profit from it.
Therefore, it is imperative that you are having a go-to-market strategy. it will help you get:
- Reach new audiences
- Educate on how your product will help people better manage their finances.
- Build trust in your brand
- Fintech marketing will let you explore data, and understand buyers, their needs, and expectations.
- Therefore, create an actionable plan that identifies key success metrics and outlines your approach to monitoring them.
9. Perform Competitor Analysis
Entering the Fintech industry comes with a crucial responsibility, here we are talking about conducting competitor analysis.
However, it can be a daunting task. The worst-case scenario is when you discover that your competitors have already rolled out a great feature that you haven't, and you only realize this when you're already losing customers.
- To ensure that you aren't missing out on anything, identify if you meet the point of parity in your market.
- Find out which features your competitors offer that you don't and assess the needs of your targeted audience to see if you can cater to them better.
- Analyze this actionable data to sharpen your competitor analysis, understand where your rivals excel, and learn from their mistakes.
- Doing so will help you target the areas in your product that require improvement.
Different Fintech Solutions To Consider
Fintech has infiltrated numerous financial sectors, stirring up a whirlwind of innovative creations.
- Investment apps, like E*Trade, Webull, etc make trading stocks and cryptocurrency simple, right from your mobile device, and with little or no commission fees.
- Payment apps, such as PayPal, Venmo, Cash App, etc allow you to pay off individuals or businesses online, in a split second.
- P2P lending app: Cutting out the middleman of traditional lending, P2P lending platforms like Upstart, Lending Club, etc allow individuals and small business owners to receive loans from numerous investors who contribute microloans directly to them.
- Personal finance apps. Mint, Personal Capital, etc let you see everything, set budgets, pay bills, and much more.
- Get your game on with crypto apps-wallets, exchanges, and payment applications for holding and transaction cryptocurrencies and digital tokens like Bitcoin and non-fungible tokens (NFTs).
The Bottom Line
No matter what type of business you are holding, whether it is a small-budget startup or a well-established company, venturing into the fintech market is not an easy game. You need to be extra careful. However, we have tried to mention all the important tips that you can consider while developing a Fintech solution in 2023.
Moreover, you can consider taking a help from professional web and
mobile app development company. Since they are known for the latest trend in the market and have a skilled professional to code your idea into reality.
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