With an adoption rate of 64%, fintech is growing rapidly in current times. Public awareness of fintech stands at 96% and most smartphone buyers are already using fintech apps. Traditional financial service providers including banks, insurers, lenders are embracing the use of technology in the financial sector. Every financial player is striving to build their own fintech app to automate and streamline their business operations. But, the question here is, how to build a fintech app that does everything a financial service provider seeks to modernize their legacy systems.
The current market scenario and growth opportunities offer a range of possibilities to develop a fintech app. A report by Statista states that now is the perfect time to build a fintech app due to social trends and financial technology developments. The report estimates that in 2023, fintech mobile apps will generate more than 935 billion USD of revenue. Although the numbers seem high, they will be a lot higher if other industries also shake hands with fintech through synergy incentivized integrations.
The article will take you through how to build a fintech app but first, let’s talk about the crucial technologies that pave the way to the success of fintech.
Financial Technologies Revolutionising Fintech
To build a fintech app, you should match your business objectives with the right set of the technology stack. It is also crucial to understand the major technology trends. You should undertake the following five financial technologies to build a future-ready fintech app.
- Blockchain – The technology which made its breakthrough with Bitcoin and since then it has been revolutionizing the financial sector with its capability of decentralising financial transactions and data. Ensuring data security and transparency make blockchain technology a very reliable option to build fintech apps with. Thus, if you’re wondering how your mobile app can help you with building trustworthy relationships with your customers, blockchain technology is the answer.
- Artificial Intelligence & Machine Learning – It has been more than five years since AI and ML technologies have been exerting their capabilities to automate many of the financial operations. Both technologies are heavily utilised in several industries but the financial institutions are yet to make proper use of the efficiency that these technologies bring with them. Both AI and ML are designed to recognise data patterns and learn from the outcomes. So, if you are wondering how to build a fintech app that gives you insights to improve customer experience, AI and ML technologies are the solution.
- Biometrics – Bringing financial services online comes with a risk of compliances and data security. Biometrics technology is the perfect solution to such concerns. Biometrics has become a very critical part of everyday technologies and will continue to be used in fintech solutions. The biometrics identifiers coupled with a robust password mechanism and two-factor authentication creates a very secure system that is very easy for the customers to operate.
- Regulatory Technology – The groundbreaking software innovations that happened in the recent past have made regulatory technology (RegTech) an inseparable part of fintech solutions. RegTech simplifies the process of both compliance monitoring and reporting and also regulation monitoring and reporting
Type of Fintech Apps
Before beginning with building your fintech app, you should be aware of the types of fintech apps that are out there. It isn’t necessary to stick with one type of fintech app. Your business idea might require features that relate to other fintech app types. Here are some of the most popular fintech app types.
1. Digital Payments
Digital payments or online payment platforms hold the largest share in the fintech industry. A recent report by Statista reported that the total value of digital payments on the global scale amounts to $74,036 million in 2020, and are expected to grow to $137,461 million by 2024 with a CAGR of 16.7%. Digital payment fintech apps address the customer’s need for fast and convenient cashless monetary transactions. The following are the two most popular digital payment apps worldwide.
- Paypal – Paypal is an online financial service that allows users to pay online via a secure internet account. The users can simply add their debit cards, credit cards, or bank accounts to make payments. Paypal also provides users with an eWallet which can hold money and make payments.
- G-Pay – Google Pay is a digital payment platform developed by Google to establish tap-to-pay and contactless payments using mobile devices. It even allows users to pay via smartwatches.
2. Digital Banking
For customers who want to manage their bank accounts and make financial transactions without physically visiting the bank, digital banking is the go-to option. Digital banking infrastructure is required to be ready to address the ever-evolving needs of the digital-era customer. Innovative companies have realised this, and this is where some banking organisations via smartphones have arrived in the need of the hour.
- Starling Bank – Starling Bank launched the UK’s first app-only current account in March 2017. It is a digital challenger bank with more than 1.25 million accounts, which includes 100 thousand small business accounts. In fact, the bank has been consequently awarded best current account provider by British bank awards in the year 2018, 2019, and 2020.
- Atom Bank – The first bank ever to obtain a banking license whilst operating only via mobile apps. The Atom Bank was a pioneer in making user authentication hasslefree by shifting from passwords to voice and facial recognition. Atom Bank differentiates itself from its digital competitors by offering saving accounts and mortgages rather than focusing only on current accounts. The bank was recently crowned as the “Best Online Lender” by What Mortgage.
3. Digital Investment
The digital investment platforms enable institutional as well as retail investors to investigate and invest in several financial assets. These types of fintech apps are great for users who are just getting started in stock market investments. The goal of these apps is to provide users with data and analytics from which they can generate insights and invest smartly.
Also called digital insurance, Insurtech deals in digital technologies that are used to make insurance operations cost-efficient and easily accessible. The primary goal behind insurtech is to speed up policy administration and claims processing. The insurtech solutions vary from insurance market aggregators to insurance company portals that offer several types of insurance policies.
RegTech or Regulatory Technology financial institutes are focused on solving regulatory and compliance issues faced by financial institutions. Financial institutions face challenges of human error while ensuring regulatory compliances. The RegTech solutions allow financial institutions to carry out analytics that help them keep up with regulatory requirements, leaving no room for errors.
How to Build a Fintech App – 6 Step Process
Be it a newcomer in the financial industry or an established institution digitising its offerings, it is challenging to outmatch the existing competitors. So, how to build a fintech app that serves its intended purpose? For those who are new to fintech mobile app development, it is difficult to know how and where to start. Here, I’ve described the process of fintech mobile app development in six simple steps.
1. Choose Your Industry Niche and Identify Regulatory Compliances
The first step of building a fintech app is to identify the regulatory compliance requirements for your industry niche. The best way to go for this is to first pick your industry niche and then identify which compliances are required for that particular niche. If you’re confused about your industry niche and aren’t able to decide which one applies to your business the most, you can use reverse engineering to find the answer. You can do this by first looking at the compliances, and then finding the best fit for your business. This will be a good indicator of your industry niche.
Once you’ve selected your industry niche, it’s time to make sure that your fintech app will stand perfectly when it comes to legal compliances. Governments around the globe have created several financial transactions and data security systems. To name a few, KYC (Know Your Customer) and AML (Anti-Money Laundering) policies are well-known amongst fintech compliances. Other prevalent regulations are GDPR, CCPA, and other data security laws, which depend on the country and market your app is targeting.
2. Build the app concept and define necessary features
You will be conducting market research to build your app concept. During market research, you’ll be accessing the customer need, which eventually will help you build the app concept. You will also need to identify and analyse your competitors to see which features of their solutions that the customers like.
I recommend you to engage with skilled product managers and business analysts. They will help you build your app concept up to a high standard. Both of these specialists will allow you to develop a concrete business case, structure your fintech solution, and define the key features that your app should incorporate.
Crucial Features for Fintech Apps
While brainstorming the app ideas for your fintech solution, your focus should be on identifying and resolving significant problems that your target customers face. Do remember that you don’t always have to come up with something brand-new. Your focus should be on how to build a fintech app that provides better services and convenience for the customers as compared to your competitors. Irrespective of the industry niche, the following are the common fintech app features that you should consider:
- The user registration and log-in flow should be simple and secure. Integrating facial and voice recognition and fingerprint authentication along with a solid two-factor authentication is a perfect solution to log-in hassle. For example, iOS 13 requires sign-in support with Apple features from the apps that use social login services. The Apple feature makes use of the device’s in-built biometric capabilities.
- Depending on your industry niche, your app should offer basic financial operations. The services can include money transfers, digital payments, money lending, investment, etc. The catch is that your customers should be able to access the financial services via the fintech mobile app itself, without even needing to turn the web app on.
- Your fintech mobile app’s user experience will be far better if it allows users to scan QR codes and card numbers. It may not look very revolutionary, but scanning a card to enter a card number is very convenient. Especially when compared to manually entering all the digits. Thus, while thinking about how to build a fintech app that focuses on the pain-points of the users, always remember to include this feature.
- Personal finance management is a feature that almost every fintech mobile app should incorporate, but not all the apps that exist nowadays have this feature. If building a fintech app that offers features better than your competitors is a priority, features like personal finance management will help you stand out.
- The custom notification feature is crucial for creating an engaging user experience. An average mobile user receives tons of notifications a day and they stop paying attention if the notifications aren’t relevant. Thus, personalisation of the notifications is must if you want your customers to not abandon your app.
3. Design UI/UX
Now when you have the app concept ready and have decided on the features that you want to go with. It is time to design wireframes for your fintech mobile app user interface and experience. So, how to build a fintech app that has a great user-friendly mobile experience? Previously, I’ve written an article on building UX in 2020, read it here.
The designing of every mobile app begins with wireframing and goes through building .psd files to creating clickable prototypes. However in some cases, creating a clickable prototype isn’t necessary, but many user experience designers recommend creating it. It not only helps in making the designs better but also allows you to see what the app will look like after development. Interacting with the clickable prototypes will also enable you to reassess your app concept and the required feature list.
4. Pick your preferred development approach and time & cost
There isn’t any straightforward answer to which development approach you should use whilst building your fintech app. I recommend you to collaborate with a seasoned Project Manager, which will help you with determining the time and cost required to build your fintech app. If you want to know about how to calculate the cost of developing a fintech app like eWallet, read my recently published article here – Ewallet App Development Cost Estimation.
5. Build MVP and assure quality
Sometimes, the app idea looks great on paper but when it comes to reality, you might want many changes in the app. To eliminate the rework and loss of time, companies prefer to build a Minimum Viable Product (MVP) before rolling out the completed product. MVP is a proof of concept to try out the features that you desired.
Testing the app at every stage of the build is very crucial whilst building your fintech app. There are various types of testing that you will be required to do such as: usability testing, compatibility testing, performance testing, UI/UX testing, operational testing, installation testing, security testing, and many more. Here you can read a complete guide on mobile app testing – Mobile App Testing – A Complete Guide
6. Release your final product and keep updating
After the success of your MVP, the final launch of your product with the enhanced functionalities is rolled out in the app stores. However, the work doesn’t just stop here. Your fintech app will require frequent updates in the initial stages. So, you should keep your focus on user feedback and see if valuable changes are required in the app.
The question of how to build a fintech app revolves around the types of fintech apps and the industry niche regulations that you are required to comply with. In this article, we’ve discussed the aspects of building a fintech app. Starting from understanding and identifying the relevant industry compliances to building your fintech app. The process of fintech app development will require you to be involved in many tech-savvy activities.
If technology is the area where you don’t find your core competency in, you can reach out to Nimble AppGenie for your fintech app development requirements. We’ve helped many startups and established organizations in the financial industry to meet their technology needs and exceed their company goals.