Six Most Popular Types of Fintech Solutions

development Mar 2, 2020
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Industry boundaries have become increasingly blurred over the years. Nowadays, it’s quite easy for a progressive software development company to enter new areas. ITOMYCH STUDIO has extensive experience in developing complex solutions, and since 2015, we have been applying our expertise in fintech that has revolutionized the financial services industry. We can undertake projects of any complexity, starting with small-scale MVPs for budgeting tools and ending with building an Open Banking environment for the whole country.

Essentially, fintech, or financial technology, is a term describing the industry specialized in providing financial services based on modern technologies. Nowadays, many startups are elaborating innovative solutions that involve e-payments, finance management powered by Data Science, Artificial Intelligence, Big Data, and Machine learning solutions. For example, such a company as Uber has realized that they lose a high percentage of drivers during the registration stage because the latter don’t have bank cards. The solution was to develop Uber money that has given the possibility to create virtual accounts, get access to immediate earnings, receive cash-back on gas purchases and spendings across the Uber platform, as well as manage money through a mobile wallet. About 70 percent of banking supervisors view collaboration with Fintechs as an excellent opportunity to build flexible and efficient infrastructure to meet the upcoming challenges and stay actual under the existing market conditions.

Types of Fintech Apps

Digital payments transaction value has amounted to $4,769,370 million in 2020, $1,017,982.4 million of which accounts for mobile payments. As people are becoming more demanding in terms of performance speed and software usability, fintech mobile applications are gradually replacing traditional financial solutions. They allow the customer to perform any operation from their device in no time, moreover, such apps are robust, secure, and highly personalized. Based on our development experience, there are six main types of fintech apps that are already available on the market:

  • P2P payment applications allow users to transfer funds between each other’s bank account directly. The card owners don’t have to share a bank or payment system, like Visa or MasterCard. PayPal, Venmo, and Google Wallet are listed among the best P2P apps in 2020.
  • Wealth management apps enable users to manage their stock investments and trade on their own. They are equipped with research and trading tools for both beginners and professionals. The most popular investment apps include Robinhood, Acorns, and Stash, the latter being a perfect option for starters.
  • Mobile wallets are e-wallets that store your bank account information on the mobile device, give you access to it, and help make digital purchases. Apple Pay, Zelle, and Square Cash are extensively used nowadays.
  • Insurance apps can be used for filing claims, processing payments, and even getting an insurance quote. They cover various areas, starting with auto and ending with health insurance. GEICO Mobile, American Family Insurance App, and Allstate Mobile are one of the most highly ranked solutions in the field.
  • Digital banking apps provide the delivery of all traditional banking services over the Internet. You can check balances, make transfers and payments, as well as get customized advice on spendings management via a mobile device. Lloyds, Halifax, and NatWest are the top three, according to the ranking of the best mobile banking apps in the UK in 2020.
  • Budgeting apps are designed for taking care of one’s budget: creating a cost plan, tracking expenses, and finding new ways to save. Applications like Mint, Albert, and Clarity Money will help you spend wisely and make the most out of your income.

We would like to point out that the introduction of the Open Banking Initiative in the UK has given rise to “hybrid” apps in terms of the range of services provided. The revised Payment Services Directive (PSD2) backed up by the Financial Conduct Authority requires that banks should share their customers’ data with other financial providers through the open API (Application Programming Interface). The initiative is meant to boost competition and promote comprehensive experience to customers, as third parties are now able to customize and expand their services. At the same time, PSD2 has strengthened the security requirements concerning personal user data. Personal Capital is an example of a multi-service app, allowing you not only to manage your cash flow on several accounts but also to optimize investment decisions. Another “hybrid” app is Lemonade specialized in P2P insurance and enabling a group of people with mutual interests to pool their premiums, ensure transparency, and reduce the overhead cost.

Steps for Building a Fintech App

Fintech product development is an extensive process that requires a thorough approach to each of the implementation stages. The ITOMYCH Studio team has a wealth of experience in the area that is reflected in our portfolio with a number of successful cases. We have proved that given the professional team and dedication, one can develop an exquisite application, appealing to millions of people. Our engineers and product managers have managed to elaborate a fintech solution for the UK market in just nine months, with the number of users exceeding 30,000 during the first year. We have an established software development lifecycle (SDLC) process, describing all the necessary steps for getting a final product, from a mere idea to the release and further maintenance. Let’s outline what needs to be done for launching a successful application:

  1. Idea. You should have a clear vision of what problem your fintech app is targeting and how it can help grow your business. At this stage, we research the market, gather data about potential customers, and outline the way their needs can be met through our application. Our product managers pay particular attention to the financial behavior of users in a given market. The idea validation is followed by defining the project scope, featuring the product-to-be functionality and interface.
  2. Design. Most fintech solutions have only mobile and web versions. Therefore, the design is crucial, as the application appearance helps build brand trust. Another distinctive feature of fintech apps is that they’re strictly regulated. Thus, the application design always undergoes reviews by a compliance team. Our designers develop mockups, wireframes, and prototypes, simulating real application functioning that allows us to test it for convenience and user-friendliness before the coding stage.
  3. System requirements. This is one of the basic levels, as applications have very complex architecture and specific internal processes. Functional requirements specify the tasks the software should perform and describe the product behavior. For instance, chargebacks, payment authentication, and fincrime prevention tools have a sophisticated system with every user button click launching a set of intricate operations. As for non-functional requirements, they place constraints on how the functions are implemented. In other words, the specifications that our architects develop outline performance characteristics, such as efficiency, quality, and portability. Scalability, resilience, and system high load resistance are another must-haves for every fintech.
  4. Third-party integration validation. Fintechs don’t implement everything available to end-users on their own, instead they integrate a wide range of features. On average, a digital bank has about 30 different services, like card and payment processing, card issuing, clearing-house functions, and so on. In addition to the mandatory integrations for your fintech system, think of what would complement your app to provide a full-fledged user experience. It should fit into the whole application context, so don’t rush to integrate a wide range of services a customer is unlikely to utilize, which can only make it “overstuffed”. Also, make sure the potential partner has been around for a while and established themselves as a quality market player. They should have a flexible API to evolve with you and keep up with technological advances.
  5. Software development process. There are two main approaches to the product elaboration: Waterfall and Agile, the first one being a linear sequential model, where each stage starts when the previous one is completed. This model doesn’t suit modern startups because of rapidly changing requirements to fintech product development. That’s why outsourcing software development companies implement Agile, flexible methodologies that presupposes continuous iterations of development and testing activities. Our work is usually subdivided into sprints, so the client can see an intermediate result as soon as each of them is over.
  6. Friends & Family Testing. As soon as the solution is available for production, you can ask family members and close acquaintances to test it. They get access to a real application that works with money, bank cards and accounts. In the case of a bank, they get a payment card that can be used when making purchases in a supermarket, for example. Their feedback can help make certain tweaks for overall app improvement before it’s accessible to a broad audience. Sometimes our clients share the first builds with their primary investors for assessing the work done by the team.
  7. Public release. It’s a turning point for a fintech product development team. Clients start using real money, regulators always keep an eye open for new market players, and unexpected challenges come up at the worst possible time. Despite all of this, public release is the most wonderful thing that can happen. It’s always an unforgettable moment for our team, as we can finally the result of our efforts embodied in a state-of-art solution. Having brought a product to market, learn what can be improved by checking real clients’ reviews and asking influencers to try your application.
  8. Continuation of the development. The software development team is not kept “on the bench” upon the product release. Product managers always have a roadmap to follow with a rich feature set. We have to constantly update mobile and web apps, as well as keep up with the latest financial market regulations.
  9. Maintenance. Even if you decide to slow down the development process, the software team won’t be out of work. This stage includes helping customers with issues they face when using your fintech app. Besides, regulators require problem resolution at short notice, while customer support, treasurer, or compliance team sometimes don’t have the tools necessary to fix an issue quickly. Making constant adjustments to the software, updating libraries and frameworks, and fixing bugs also requires a certain amount of resources. In our experience, a small team continues to work on the project.

Final Thoughts

Fintech app development is something we are competent in and passionate about. We take up challenging tasks, help our partners with requirements development, idea elaboration, architecture design, and everything else the development process, market launch and product maintenance involve. Our product & software development team has released more than thirty fintech apps, many of which have been developed from scratch. We are always happy to share experience and welcome new members who enjoy web and mobile development and always strive for the perfect ratio of best practices and innovative decisions.

Fintech applications are a current trend, as they contribute to companies moving their services to the digital ecosystem. Operations automation, improved efficiency, and service customization are only a part of the advantages such apps provide. However, application development is a multi-stage process that can be very demanding in terms of the efforts required. A committed approach to idea elaboration, design and development, testing, and post-release maintenance is sure to make the product successful and benefit your business.