Building apps for the Fintech industry is an alluring and profitable endeavor. The Fintech market grows at a substantial rate. It has steadily increased its value over the years, and it offers plenty of opportunities for conducting new business. Investing in opportunities for mobile app development in the FinTech sector allows you to tap into this vast market and generate profit.
This article will provide an overview of the process of developing a FinTech app, including necessary features like security, functionality, and usability. It will also explore the various stages of app development, from ideation to launch.
Buckle up and let’s get started.
A FinTech application is a product that uses technical solutions to provide financial services to users. With the ease of use of a mobile app device, users can perform transactions online, review their banking info, track and manage their expenses, or trade stocks. There are multiple use cases for starting a FinTech app business today. Let’s start with reviewing some statistics to better understand the size of the market.
The global FinTech market related to digital financial services is expected to reach $936.5 billion by 2030, and a vast portion of this is FinTech mobile apps. According to Statista, the number of users in the digital payments market is expected to amount to 5.48 billion by 2027. This would mean that a significant percentage of the global population would have at least one FinTech app installed on their phones. In certain cases, users have no other option than to perform all of their banking through an app.
Given the current and future expansion of this market, finding new ventures that solve real-world financial problems is a good way to get started. FinTech apps support many users and businesses by simplifying traditional (slow) processes like lending, reporting, transaction management, accounting, insurance claims, and so on. In the past, you had to physically visit your nearest branch to perform simple account retrieval statements, but you can now do it from your sofa.
We could also devote hours to discussing other obvious benefits of FinTech apps, like saving time and money, the convenience of use, financial training, and financial cost management. It’s important to know that all of the above require careful planning in terms of finding a suitable idea for an app, developing it, testing it, and releasing it to users. However, with the right solution, you can achieve great success and reach your financial targets.
Let’s take a look at some of the types of FinTech apps that are available.
There are thousands of FinTech apps covering a wide range of financial services. Here are some types of FinTech apps that you can use for inspiration:
Cryptocurrency and blockchain apps: Cryptocurrency exchanges like Coinbase enable users to buy or sell cryptocurrencies, manage their portfolios, and transfer from one wallet to another. The development of these apps requires a deep understanding of the crypto ecosystem and its risks.
Stock trading apps: Platforms like Robinhood allow users to trade stocks from their mobile devices, with minimal registration fees and vetting requirements. The development of these apps requires a deep understanding of the trading exchange ecosystem.
Personal finance apps: Apps like Mint help users manage their finances in one place, set budgets, pay bills, and keep track of accounts. The development of these apps requires some understanding of regional financial habits and the status of the market.
Insurance: Apps like VHI and Laya help users make insurance requests by submitting receipts and claim forms through the app.
The most important features of a FinTech app are:
FinTech mobile apps should implement extra security controls regarding transaction verification, user authentication, disaster recovery, and data encryption. For example, it is not uncommon to enforce multi-factor authentication using PIN codes, TOTP passwords, or biometric logins. Also, tracking user devices and usage patterns for suspicious activities is essential to protect both businesses and users from fraud. For credit card transactions, adopting the latest version of 3D Secure and using dynamic CVV2 codes would enable more secure and verifiable transactions, preventing unnecessary chargebacks and fraud.
UX is king when displaying financial information to users. FinTech apps should employ top-of-the-line data visualization and reporting libraries. They should also be highly performant and ensure the clarity and accuracy of the information they display.
Also, you need to ensure that the app is accessible and localizable across various devices and platforms so that users can review financial figures in their native local currency and number formats.
If your app accepts payments, you need to ensure that you handle the risk of credit card fraud. You will need to offer a way to make secure and reliable payments, and you can use vendors like Stripe or PayPal to handle all the relevant PCI DSS regulation risks for you.
In terms of integration with other systems, you need to make sure that your systems have highly resilient connections with external vendors. This would help reduce the risk of financial loss due to latency or loss of availability. For instance, if you are running a trading platform or HFT, you must invest in co-location and other ways to reduce the latency between your computers and stock exchange servers to avoid losing your competitive advantage.
It is important to invest in analytics and reporting methods that give you an accurate picture of what your users are doing. Using AI and ML predictors to detect and prevent fraudulent events as well as setting transaction limits and rate limits would be beneficial. After all, you will have to report to authorities if something goes amiss (such as when users suffer severe financial loss), and they might even sue you or use the press against you.
To build a FinTech app, you should follow a systematic approach that combines best practices of the SDLC, including ideation, market research, UX design, development, testing, and quality assurance (QA). Here's a step-by-step guide to the process of building a FinTech app:
First things first, you should brainstorm ideas for your FinTech app, focusing mainly on addressing identified gaps and meeting the needs of your target audience. How does your app differ from the competition? What is your target audience? How would you deliver a service better than the alternatives? Your preliminary answers to all of these questions should be written down and analyzed in advance in this phase.
You must conduct thorough research of the market and try to validate your idea with a small POC. You need to anticipate trends in the industry and analyze the success of FinTech apps that are already on the market. How does your app address the needs of your users?
Spend some time monitoring industry news and trends to understand what the market is experiencing now and to get an idea of what will happen in the future. Participate in online forums and discussion groups to gain more domain knowledge. Try to scrutinize direct competitors and see how they maintain their market share. You should be prepared to adapt your app accordingly to maintain its mission statement and core values.
Your app needs to have a clean and easy-to-use interface with modern design elements. Ensure that you create your own branding and theming system (and that you can improve it along the way). In addition, make sure you cover accessibility and internationalization well, especially when presenting financial data. Consider using icons and data visualizations to enable a coherent view of the important data relations that you present.
Also, make sure to define design requirements and support for adapting to various devices and screen sizes, and ensure that your app performs reliably on various platforms. For instance, creating a mobile design testing plan would help guide and shape all of your testing practices early on so that you can start implementing them right away. You can define testing requirements for accessibility, supported devices, supported platforms, visual regression, and so on. Ultimately, you want to balance security and usability while offering a seamless experience for your users.
In terms of the actual development process, you need to first establish the primary features of the app and start working on them.
This phase will be the most time-consuming and costly compared to the rest since you will be committing resources to the actual product realization. You will need to follow best practices for both mobile app development and (particularly) FinTech development. Ensure that your team members are familiar with the fundamentals of FinTech app development and that you understand the business model and terminologies, consult with SMEs and technical leaders about the final vision of the product, and so on.
In terms of tech stack and technology choices, you want to consider using the best – but not necessarily the newest – tools available. Choose the right tools and services that will do the job. Your app should be testable and easy to verify, and it must not use any dependencies from untrusted sources or unknown origins.
QA and software testing should be an indispensable part of your development pipeline. When building a FinTech app, you must create and perform a thorough and extensive test plan that ensures security, clarity, and resiliency. For that, you can utilize the plethora of testing tools and mobile testing strategies that are available.
At the minimum, you need to have quality gates that ensure any released code passes basic sanity tests and adheres to secure coding guidelines.
Integration testing is also important since any involvement of monetary transactions and data will be sensitive to timing issues, delays, and consistency issues. Database testing will also be required to ensure that any transactions you make are consistent and verifiable.
Performance testing is also critical to the success of the app. You definitely do not want your app to become slow or unavailable during peak hours. QA engineers can use a variety of load testing tools to assess performance.
Since this is a highly regulated environment, further tests will be needed for compliance and reporting purposes. You should have a dedicated compliance and quality management team to ensure that your app is in proper alignment with regulations.
So, you finally released an app that ticks all of the regulatory compliance boxes and test cases. However, you need to be aware that your work is still not finished. Actually, one might say that the real work starts from here. You have many things to consider, including:
User feedback and support: Users will eventually write app store reviews (either positive or negative) or directly contact you for support. You need to be extra diligent here and try to provide as much support and clarification about your app features as possible.
Future compatibility upgrades: Apple and Google release new versions of iOS and Android (respectively) every couple of years. You will need to have a strategy and testing infrastructure to verify that your app is compatible with the latest mobile devices and operating systems so that you can increase your app usage statistics.
QA testing: While you’re maintaining your app and providing new features, you also need to invest in testing automation – especially in places where you lack the most test cases. You need to ensure that your app workflows have sufficient coverage and
resolve any incoming bugs and defects that you receive from CRM systems.
Improving your competitive advantage: You need to discover ways to improve your app (by adding innovative features and extending support, for example) while running the app with the existing infrastructure, code conventions, and test cases. During this phase, the development process will be more refined and structured, and it should take care of edge cases, tradeoffs, and compatibility issues between versions.
Let's take a step back and discuss some of the key challenges faced when developing a FinTech app.
Even if you have your next idea and business plan sorted out and you’re ready to make money, you still have to consider several key challenges when developing a FinTech app. With an endless list of regulations and technology risks, you will have to come up with a solid plan to satisfy all compliance requirements as well as protect against cyber threats, scammers, and known security risks.
This is not an easy process, so you will need to be proactive and aggressive with your decisions. Here are some key challenges you’ll face when developing FinTech applications:
When it comes to FinTech apps, you cannot underestimate compliance and regulatory requirements, as they are a major part of the successful release of the product. You will need to ensure the safety and security of your users' data, prevent financial crimes, and adhere to rules and regulations set by government bodies and institutions.
There are two widely recognized industry standards for FinTech companies: the Payment Card Industry Data Security Standard (PCI DSS) and (for EU citizens) the General Data Protection Regulation (GDPR). However, these are not the only ones you should adhere to. For example, if you distribute your app in the USA, you have to consider regulations like the Truth in Savings Act (TISA) and the E-SIGN Act for electronic signatures.
It makes sense to hire relevant legal experts before unrolling your app in different parts of the world to prevent unnecessary legal woes.
In addition to compliance, FinTech apps need to offer increased security controls to prevent fraud, sensitive data leakage, and unlawful transactions.
Here are some key security considerations for FinTech mobile apps:
Defense in depth: This means integrating security into every layer of the release pipeline and making it part of the entire development process.
Incident response and disaster recovery: You need to have a backup plan for disasters or major incidents and know how you will respond to breaches and security breakdowns.
Monitoring and alerting: Know which data to keep and which data to throw away. You need a way to detect anomalies, suspicious activities, threats, and insecure deployments that could compromise security.
Securing data at rest and in transit: Know whether your data is secure, how to store sensitive data in encrypted form, and how to transfer information without exposure.
Domain expertise: Do you have the correct domain knowledge to avoid constant mistakes or risky assumptions? Do you have experienced people on board? Do you have the necessary technical knowledge to respond to sophisticated fraud attacks?
Mobile apps in general, and FinTech apps in particular, are a costly business. They’re not only costly in terms of funding the development and research stages, but also in terms of time. Depending on the scope and the type of application you want to deliver, it could take at least 6 months to a year before the first official release of the app – and that’s if you do all of the due-diligence tasks beforehand and make sure that you comply with relevant regulatory requirements. In terms of monetary costs, you need to allocate at least $50,000 - $100,000 for the first prototype.
Depending on the amount of funding you have allocated for this project, you might consider outsourcing some or all parts of the development process. It would also be advantageous if you could outsource security testing and compliance/legal support processes to a verified partner to ensure that the app covers all edge cases.
We left testing for the finale since there are lots of things to consider here. One of the main challenges of releasing a successful mobile app is trying to support as many users as you can. The problem here is that the mobile app user base uses many different devices, operating systems, versions, and hardware.
There are many questions to consider here. For instance, should you support very old versions of Android where some security controls are lacking? Should you require users to possess only the latest hardware? Should you prevent jailbroken devices? How do you perform manual and automated testing that covers all supported platforms? Those are significant questions that you need to answer before releasing your product.
One great first step toward testing automation is to invest in a real device cloud because testing on real devices is always preferable to – and more accurate than – emulation/simulation. You can define a list of supported device/OS combinations and run your e2e tests all at once, saving you time and effort versus performing manual testing.
Among other mobile app testing strategies, it's also important to have real users testing the app via mobile beta testing. This is where actual users try your app and provide feedback about its performance and UX. Great feedback is a prerequisite for a successful product release, and beta testing helps you avoid bad reviews and negative feedback later.
I hope this article helps you start building your next FinTech app venture idea. Since FinTech is an increasingly prominent field, you can find many opportunities to develop your own niche and support the economy.
Needless to say, the importance of testing FinTech mobile apps cannot be overstated, since many users' financial details and life savings could depend on your preparatory work and moral responsibility. By making sure that you have a solid mobile testing infrastructure that you can control at your fingertips, you can rise above the competition in terms of resilience and reliability.
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