How to Build a FinTech App: Benefits, Challenges, and Trends
As the world of finance becomes more complex, a custom FinTech app can help you gain a competitive edge by meeting unique customer needs and supporting innovative features. In contrast to deploying off-the-shelf products, custom fintech application development offers the flexibility to tailor solutions to your goals, integrate cutting-edge technology, and respond quickly to industry changes.?
In this article, we discuss how to build a FinTech app to secure long-term business growth.
FinTech market overview
The FinTech market is fast-growing worldwide and is projected to reach $1,152.06 billion by 2032. As customers expect greater convenience and security in their FinTech products, having a well-tailored FinTech application becomes vital for all financial businesses.?
The FinTech market includes various valuable segments. For example, the market for digital assets is expected to be worth $80.08 billion in 2024, driven by increased interest in blockchain-based assets and digital currencies.
In addition, digital payments remain a dominant FinTech segment, with 4.8 billion people using them by 2028. This is due to the widespread demand for seamless, contactless payment options, as consumers increasingly prefer digital payments over cash.?
Other segments, such as digital investments and raising capital, are seeing increased adoption of software applications as businesses and individuals seek more efficient ways to manage, grow, and access capital.
The neobanking market is emerging thanks to younger customers who prefer convenient, mobile-first banking experiences.?
These and other segments of the FinTech market are covered by various dedicated software products. Let’s see what types of FinTech apps you can build to empower your business.
Types of FinTech software
FinTech apps come in various forms, each designed to address specific business needs, from payment processing to wealth management. Depending on your operational focus, you can develop a single-purpose app or combine multiple functionalities into one solution to offer a richer user experience.
Some of the most commonly used types of FinTech applications include:
- Digital payment apps, including e-wallets and payment processors, facilitate fast and convenient transactions, allowing users to make cashless payments. Examples include PayPal, Stripe, and Google Pay.
- Mobile banking apps give users easy access to their bank accounts, allowing for money transfers, bill payments, and financial management without visiting physical branches. They often include features like secure authentication and spending trackers.
- Loan apps streamline the lending process using AI to assess borrowers’ creditworthiness and manage loans. They help to efficiently connect lenders with borrowers, offering personalized loan services.
- Investment apps help users invest in stocks, ETFs, and other assets, often acting as financial advisors with automated tools. Popular examples include Robinhood, which offers commission-free trading, and Addepar, which provides advanced analytics for seasoned investors.
- InsurTech apps simplify interactions with insurance providers, enabling users to file claims, get insurance quotes, and receive personalized recommendations. They often integrate AI and IoT to encourage healthier lifestyles or safer driving habits.
- RegTech apps help businesses manage regulatory compliance by using AI and big data to assess risks and legal adherence. They automate regulatory processes, reducing the potential for legal errors.
- Consumer finance apps focus on personal finance management, helping users track expenses, plan budgets, and save money. Examples include Mint and PocketGuard, which sync with bank accounts and payment services.
However, to enter this market and be competitive, simply choosing the right type of custom app won’t be enough. You should also keep an eye on the latest FinTech trends to build advanced applications with outstanding service.
Key trends to watch when building a FinTech app
Beyond building the right type of app, it’s essential to consider incorporating advanced technologies to enhance your app’s capabilities and appeal. Staying current with technology trends can help ensure that your FinTech solution not only meets today’s demands but also anticipates future user expectations. Here are some of the leading trends to watch:
Blockchain
The Blockchain is rapidly becoming a cornerstone of FinTech. It offers faster, cheaper transactions and high compatibility with existing systems, and it facilitates cryptocurrency payments and smart contracts.
Machine learning and AI
Artificial intelligence and machine learning in FinTech help reduce costs, assess risk, enhance security, and improve customer service. These technologies aid FinTech businesses in automation, fraud detection, and advanced financial modeling.
Open banking
Open banking enables third-party financial service providers to access banking data via APIs, offering more tailored financial services and fostering innovation. It promotes transparency and allows users to manage their finances more effectively by integrating different financial products and services into a single app.
Chatbot banking
Chatbots are revolutionizing FinTech customer support by providing quick responses and fast transactions. Conversational banking, integrated into apps like Messenger and WhatsApp, particularly appeals to younger generations seeking instant service.
Embedded finance
Embedded finance integrates financial services directly into non-financial platforms, enabling users to access payments, lending, and insurance within their favorite apps. This trend allows companies across various industries to offer seamless financial solutions, enhancing customer experiences and accessing new revenue streams.
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6 steps to create a custom FinTech app
Once you know what type of product you want and what advanced technologies you want to enhance it with, it’s time to start working on a detailed plan. Creating a custom FinTech app involves several critical steps that help ensure success and longevity in the market. By following a structured approach, you can build a FinTech app that’s not only compliant and secure but also aligns with your business vision and customer needs.
1. Clarify your project vision
Select a specific area within FinTech, like wealth management or payments, focusing on your business needs and target audience. Then, share your vision during a discovery phase with your trusted software development vendor. They will be able to turn your ideas into a clear and documented list of features and requirements that will serve as a project roadmap.
2. Ensure legal compliance
Compliance varies by region, so consult a legal advisor to meet all regulatory requirements. In many countries, there is no single regulatory body for FinTech, requiring companies to navigate multiple laws and regulations.
3. Hire a development team
A standard FinTech development team includes developers, project managers, analysts, and designers. A good outsourcing partner will not only provide you with all the specialists for your team but will also use their experience to make your product secure and compliant with technical and cybersecurity regulations.
4. Focus on the user experience
Prioritize smooth, intuitive user experiences, balancing security with ease of use. A business analyst can help you build features around your target audience’s needs, ensuring that tasks like logging in or transferring funds are simple yet secure.
5. Develop and test an MVP
Build a minimum viable product (MVP) with core features and release it early to gather user feedback. Use this feedback to refine your app and identify features to add next.
6. Refine and maintain the app
Regular updates, bug fixes, and security checks are crucial. Continuously improve your app by adding new features, updating it for the latest operating system versions, and maintaining a modern design.
Challenges of FinTech app development
Your team may face different challenges while building a custom FinTech app, from a lack of niche technical expertise to difficulties in ensuring compliance with local FinTech regulations. The most important challenge, however, is ensuring proper security, as FinTech apps are constant targets of hackers. When building a FinTech app, your team should properly secure it against:
- Malware attacks. FinTech apps are prime targets for malware that can compromise sensitive user data and disrupt services.
- Data breaches. Unauthorized access to personal and financial information is a major threat, with severe consequences for both users and companies.
- Security vulnerabilities. Weaknesses in software or infrastructure can expose apps to cyberattacks, leading to significant financial and reputational damage.
- Identity theft. Hackers may steal users’ identities, leading to fraudulent transactions and loss of trust.
To overcome the challenges of FinTech development, we recommend regular modernization of your FinTech ecosystem, frequent security testing, and updating every component of your software in accordance with recommendations and regulations in your region and niche.
How Apriorit can help with FinTech app development
With over 20 years of experience, Apriorit helps financial companies build highly secure, innovative, and competitive software products.?
With our help, you can enrich your project with professional services in:
Apriorit specializes in cybersecurity, so you can be sure that your FinTech application will be thoroughly tested, secured, and updated, keeping your and your customers’ invaluable data safe from breaches and cyberattacks.
To learn more about how to create a FinTech app using our services, visit our website.?
Ready to discuss your next project? Contact us at info@apriorit.com.