The popularity of fintech applications is growing, as is the demand for creating new fintech products. This is because they are more efficient and responsive to user needs than traditional ones. Business Research Company estimates that the fintech industry will grow to $158 billion by 2023. According to this study, in the U.S. alone 60% of credit unions and 49% of banks believe that fintech partnerships are a necessary component of today’s market. In this article we will focus on how to build a fintech app and must-have fintech app features.
Table of contents:
- Types of fintech apps
- Technology stack
- Key features for fintech apps
- Security and regulatory compliance
- The process of fintech app development
- Wrapping up
Types of fintech apps
Fintech applications are web or mobile applications related to financial services. These days, fintech applications are widespread as most financial services are provided digitally to increase their efficiency and speed. This is why companies all around the world are interested in learning how to build fintech apps. Characteristics of fintech apps are:
- Personalized UI and Settings
- Fast Loading Time and High Performance
- Extremely Helpful Customer Support
- Quick Adaptation to Users’ Needs
- Compatible with Mobile Platforms
- Biometric Sign-in
- Streamlined Onboarding
- User-First Navigation
- Friction-Free Forms
- Interactive Data Visualization
- Easy API Integration
The difficulties of fintech app development depend on the type of app. There are several types of fintech applications depending on the area of finance:
- Digital payments. Digital payments are fast and secure non-cash payments. Fintech applications with online payment systems, e-wallets, and digital currencies facilitate the process of electronic payments. Statista estimates that the value of global digital payments will reach $6,685 billion in 2022.
- Digital banking. Banks are developing fintech applications because it is a very convenient way for customers to manage their bank accounts and for bank employees to manage their customer data.
- Digital lending. These are lending applications and software that facilitate communication and settlement between lenders and borrowers. Financial institutions such as banks or individual lenders use fintech applications to simplify lending procedures and manage them efficiently.
- Digital investing. These fintech applications allow investors to research various financial assets and stock markets to successfully invest in them. Such apps provide users with up-to-date news and important data to make informed decisions about their investment plans.
- Consumer finances. Consumer credit apps help users manage their personal finances. With the appropriate tools and features on such apps, users can easily manage their expenses, plan budgets, and spend.
Fintech applications are attractive because they can quickly and efficiently solve necessary tasks. This was not overlooked by giant companies such as Google, Apple, Amazon, and Facebook. They were among the first who showed interest in how to build a fintech app. Today companies and financial institutions are taking a closer look at these kinds of applications and are implementing them as soon as possible to gain benefits and customer acceptance.
To create a functional and secure application, it is necessary to choose the right technologies. Everything depends on the requirements of the project and the type of software. The most widely used technologies in fintech app development are Kotlin, Java, Python, C#, Objective-C, Swift, Flutter, Go, PHP, Yii, and Ruby. There are 4 types of applications, and each application is developed using a specific technology stack:
- Native apps. These fintech apps for iOS or Android are developed exclusively for one platform with a focus on all unique features. The technologies used to develop native iOS apps are C, SWIFT, Ruby, Apple XCode, and the iOS SDK. Technologies used to develop native Android apps – Java, Kotlin, Python, Android Studio, and the Android SDK.
- Cross-platform applications. Cross-platform apps support multiple mobile platforms and are developed using C# and Flutter.
- Hybrid apps. These apps support both web apps for web browsers and native apps for installation on specific devices, whether Android or iOS. Technology stacks such as HTML 5 or PhoneGap are used to develop hybrid apps.
- Progressive web apps (PWA). Progressive web apps work in browsers and are often developed on Redis, React, Go, PHP, Yii, Laravel, and Symfony.
The client and server requirements must be approved in advance and taken into account during the formation of the technology stack. Creating a fintech app is a complex and difficult process.
Fintech applications also use application programming interfaces (APIs) to communicate with other service providers, back-offices, and databases. They act as building blocks for developing a financial services application with various services, including card issuance, currency exchange, IBAN generation, etc.
Key features for fintech apps
The set of features varies depending on the type of application and the client’s wishes. To create a list of all the features and not miss anything important, you need to understand what path users will take when interacting with your product. Standard fintech application features are:
- User profile with registration and login page.
- Dashboards with a clear visual representation of payment history, money movement, etc.
- Integration with a payment gateway.
- Push notifications about transactions, etc.
- Geolocation to find the nearest ATMs, etc.
- Autonomous work with a poor or no Internet connection.
Today development companies are competing to provide the best fintech solutions. Because of this, there are always innovative features in fintech apps so don’t limit yourself to the ones we’ve listed above.
Security and regulatory compliance
Technological innovation in financial services drives growth, enabling both financial institutions and fintech-focused technology providers to deliver their services more efficiently. Accelerating technological changes and changing customer preferences are affecting how financial services are structured, delivered, and consumed. At the same time, the fintech regulatory environment evolves across countries to keep pace with new demands for financial regulatory transparency.
Fintech regulation in Australia, Europe, Asia, and other parts of the world includes anti-money laundering and counter-terrorism financing (AML/CTF) obligations. Fintech companies must comply with the ever-changing AML/CTF regulations to meet new requirements for financial transparency. To ensure that your company complies with a jurisdiction’s legal requirements, it is prudent to seek regulatory advice on technological innovation in the financial services sector before launching a project.
All companies must properly structure their business to follow applicable laws and regulations. The regulatory requirements of fintech in different countries have their peculiarities. Fintech industry regulators have their vision in each state of how a particular fintech project should be carried out. In addition, since countries are members of the international community, international treaties, conventions and declarations must be complied with when registering a fintech company abroad. You can learn more about the specifics of fintech regulation in different countries in our article “Fintech Regulation Around the World 2021-2022“.
As for security compliance, any fintech company needs to assess the security of the system as well as whether the solution is compliant with regulatory norms. This is important both from the perspective of the user, who expects security during transactions and application use, as well as from a legislative perspective.
For example, mobile banking applications must comply with the Second Payment Services Directive (PSD2) that includes requirements for strong customer authentication (SCA). Several solutions are available to authenticate users or sign payments, such as one-time passwords, digital pass, security tokens, and OTP/MAC generator. Moreover, Open API must enable a secure exchange of transaction data with external service providers.
In the EU, sensitive data in fintech apps must be stored and handled following the General Data Protection Regulation (GDPR). The GDPR applies both to companies that determine the purpose and manner of processing personal data (controllers) and to companies that process personal data on behalf of controllers (processors) such as cloud service providers.
GDPR takes a principled approach to personal data protection. The general principles and requirements for market participants are as follows:
- Process personal data in a lawful, fair and transparent manner
- Collect personal data only for specified, clearly defined and legitimate purposes
- Process and store personal data no longer than is necessary for processing
- Take and maintain appropriate measures to ensure the security of personal data
In California, sensitive data in fintech apps must be stored and handled following California Consumer Privacy Act (CCPA). It gives state residents the right to find out what data companies are collecting about them and to request that all information be deleted. The CCPA defines personal data as any information that identifies a particular consumer:
- Real names or pseudonyms
- Mailing addresses
- Account names
- Social Security, driver’s license, and passport number
- Browsing/purchase history
- Biometrics (height, weight, fingerprints)
- Employment information
- Educational information that is not publicly available
Every country has its analogs of GDPR and CCPA and they have different requirements for sensitive data storage and processing. So it is necessary to comply with them.
The process of fintech app development
The process of creating a fintech app can be divided into 6 phases:
- Discovery phase. This aims to develop a general plan of work on the project.
- UX/UI design phase. This begins with researching the audience and ends with a prototype.
- Programming phase. This consists of front-end and back-end development.
- Testing phase. This is needed to make sure your application works as intended.
- Publishing phase. This is when you bring your product to the public.
- Support phase. After publication, your app may need some improvements because of constantly changing technology.
We have a separate article about mobile fintech app development called “Mobile Banking App Development: IdeaSoft Guide” where you can find how much it costs to develop a mobile fintech app. If you are interested in other types of fintech apps, feel free to write to us and we will consult you.
Now you understand why a lot of companies are interested in fintech app development and how to build a fintech app. Fintech app development requires an excellent understanding of the technological peculiarities, trends, and the market. IdeaSoft’s team keeps abreast of the latest changes in the fintech world and uses such advanced technologies as blockchain and AI to create innovative solutions to meet the needs and expectations of users.
IdeaSoft has been providing fintech software development services for customers all over the world for more than 5 years. Our portfolio includes payment applications, exchanges, trading platforms, and different banking solutions. Feel free to discuss your project with us.