Developing a Fintech App? Here’s What You Need to Know
Developing a Fintech App? Here’s What You Need to Know
There has never been a better time to build a fintech app.
Right now, we’re experiencing a perfect storm of powerful technology, consumer trust in mobile finance and a financial landscape increasingly open to innovation and disruption.
Mobile banking registration rose by 200% in April 2020, and over half of those (60%) had no plans to return to branch-based banking post-Pandemic. Meanwhile, over a third of Brits aimed to have a digital-only bank by the end of 2021.
These numbers are clear. People are more open to trusting their finances to digital technology than ever before.
Finance Is Opening Up
Another major opportunity for fintech startups is the increasing number of open banking initiatives launching around the world, emulating the EU’s 2015 PSD2 directive and the UK’s 2016 Open Banking ruling.
These aim to open financial services up to innovative online and mobile applications. Under open banking, third-party developers can use open APIs to build their apps and services around banks and other financial institutions.
What This Means For You
If you’re building – or thinking of building – a fintech app right now, that’s great news! You’re selling into a market that’s significantly more eager for your services than half a decade ago and you have unprecedented access to major financial institutions too.
It also means that you’re potentially up against a wider playing field, higher customer expectations and potential pressure from regulatory authorities.
To build a great fintech app that stands out in an increasingly crowded field, you’ll need a comprehensive understanding of where fintech is right now, where it might go and what you need to watch for compliance-wise.
That’s why we’ve put together this guide. We’ll cover:
- The fintech landscape right now
- The features your customers want the most
- What you need to know about compliance issues
- The ins and outs of your fintech build
What Types of Fintech Apps Are on Offer At the Moment?
First of all, a quick rundown of where the fintech market is right now.
In a nutshell: it’s pretty broad.
From mainstream current account providers to AI-enabled savings bots, crypto wallets, mobile pension funds and more, there has been an explosion in what fintech can offer. Currently, you’ll find numerous solutions for:
- Mobile payments eg. PayPal and Venmo
- Pensions and investment apps eg. Robinhood, Penfold
- Banking apps eg. Monzo, Atom, Starling, Revolut
- Regtech apps eg. Clausematch
- Insurance apps eg. Lemonade, Insurify
- Lending apps eg. Earnin, Dave
- Consumer finance eg. Emma, Plum, Yolt
- Crypto apps eg. Coinbase, BlockFi, Wirex
This means that to stand out to both potential users and potential investors, you’ll need to know what your niche is and how your product fits it. If your app is too broad, it’s less likely to gain traction in markets where well-loved, specialized options already exist.
Start small, with a precise market fit. If you see a broader future for your app, add features once you have a loyal user base that loves your product and might switch allegiances from elsewhere.
What Features Should My Fintech App Offer?
This largely depends on what sort of app you’re creating!
Knowing which sort of features you need comes with knowing your business niche. Start with a purpose in mind and think about which features you need to get there, rather than vice versa.
That said, there are a few features that all fintech apps should implement if they want to attract and retain customers whilst standing out from the crowd. These are:
Research by UK comparison website Finder suggests that security is the most valued banking feature among consumers (40%) with ‘range of digital services’ coming a close second at 39%.
Consumers care about security. Show them how seriously you take your obligations here by embedding a range of security features into your app. Login should be two-factor authentication at a minimum – and consider asking for a password to complete certain actions (large payments, for example) too.
Regardless of what your fintech app does, it’s a fairly safe bet to suggest that money will need to exchange hands at some point on at least one of your user journeys.
You can do this by connecting to a number of payments services like PayPal or Stripe using their own APIs. If you’re operating in markets where open banking isn’t widespread, you’ll need to use a third-party API service like Plaid, MX or Codat to integrate directly with your users’ bank accounts.
You will need to build this functionality securely. You will also need to make sure your UX reflects this security – your app needs to look and feel secure to build this trust. Keep it clean, easy-to-follow and always offer confirmation screens to reassure users that a payment has been successful.
If you’re concerned about your finances, you want to talk to someone immediately. You don’t want to have to wait until between the hours of 9am and 5pm, Monday to Saturday.
Building the support services you offer around your fintech app is as important as building the app itself for trust and long-term relationships with your customers. Mainstream banks and fintechs holding significant amounts of customers’ money should aim for 24/7 manned support (although an AI chatbot to take care of low-level enquiries alongside this isn’t a bad shout).
Fintech apps are popular because they simplify processes that are otherwise difficult to navigate.
Whether your users need to track crypto or stock values, keep on top of their spending or simply know when the next bill is coming out, you need to present this data in a clear, accessible manner. User dashboards are a great way to do this.
Use color to your advantage here (it helps make graphs more readable) and don’t present too much information on one page, or it won’t register. On mobile in particular, One chart per screen, with the ability to flick through a series of them if needed, is a solid starting point.
Fintech apps store and gather a huge amount of data. Hidden in that data will be trends imperceptible to the human eye, simply because we don’t have the bandwidth to process it.
AI-enabled analytics is rapidly becoming essential for fintechs that want to thrive. If you can create algorithms that both process the data you feed them, and use that data to make themselves more accurate, you open up all sorts of opportunities.
Examples of where machine learning adds value in the fintech space include:
- Better credit scoring, so you can loan more with less risk
- More accurate fraud or money-laundering detection
- Compliance with rapidly-changing regulations
- Personalized customer experiences
- Stock market prediction and analytics
Eyes on the Horizon: the Future-Focused Techs You Should Be Watching
The great thing about developing a fintech app right now is that there is an explosion of new tech that’s set to revolutionize how we deal with our finances.
Some of the options below might well be relevant to you, right now. If now’s not the time, however, these should definitely be on your radar. Have a game plan for how you’re going to approach these technologies when the time comes.
For a more in-depth look at disruptive digital technologies, check out Digital disruption in financial services: a 2021 forecast and beyond.
Traditionally, banking contracts require input from many human intermediaries to make them work – but what if you could change this and make everything faster and more secure?
That’s what smart contracts do. Based on blockchain, smart contracts automate large parts of this process whilst upping security thanks to their reliance on distributed ledger technology. This has the power to transform how banks and other financial institutions operate.
With some core banking platforms like Thought Machine already offering smart contracts to clients, it’s perhaps only a matter of time until this becomes widespread.
Until relatively recently, cryptocurrencies were either for investment or for use on less salubrious corners of the dark web.
This is no longer the case. With mainstream credit card providers Visa and Mastercard linking with Coinbase and Gemini respectively to create direct crypto payments solutions, we may be set for an explosion of people wanting to use cryptocurrency at the point of sale.
How will these fit with your fintech app? When will you start to accept them? Even if your app isn’t a crypto app per se, it’s worth considering these issues now so you’re prepared when the time comes.
What Do I Need To Know About Compliance?
As an industry, finance is heavily regulated. And so it should be – you’re dealing with people’s money. They deserve to know that you, as a business, are behaving ethically and that their investments are safe from cyber attackers.
Fintech-specific regulatory frameworks are few and far between, but it’s likely that whatever you’re using your app to do will come under the jurisdiction of overall financial regulatory authorities.
Each country has a different financial industry regulator, and each of these regulators have their own set of rules you’ll need to meet to trade. Failure to meet them could result in hefty fines, and in some cases prosecution.
Common regulatory requirements for financial services businesses include:
- Anti-fraud and anti-money laundering training for relevant employees
- Security requirements for mobile apps
- Clearly-defined reporting and whistleblowing processes
You can find a global list of financial industry regulators here. This is a useful starting point if you’re planning to trade across international markets.
Fintech and Data Protection Laws
As well as complying with industry-specific regulations, your app will need to meet data protection criteria laid out in more general regulations like the GDPR.
These give consumers some degree of control over who holds and processes their data, and outline businesses’ responsibilities for keeping this safe.
If you’re found to be in breach of data protection legislation, you could be liable to fines and prosecution, as well as reputational damage among your target markets. Awareness of data protection issues is on the rise, so a lax attitude here could cost you significantly.
Important to note: The European Court of Justice’s Schrems II ruling (2020) has effectively ended free data flows between EU and non-EU states due to tighter restrictions on transferring personal data across EU borders.
This will affect US and UK companies wanting to trade in EU markets. If you’re building a new app, it’s important to be aware of this and plan your app’s data processes accordingly.
How Do I Build A Fintech App?
You can either opt to build your fintech app in-house or outsource to a development agency. Alternatively, you might opt to extend an in-house team temporarily with some functions outsourced and some kept in-house.
Assuming you have some degree of involvement in the process and aren’t outsourcing completely, use the following steps as a rough guide to your own release schedule. If you’re using an Agile approach, consider this a blueprint for each sprint you plan.
- Decide on your niche: What is your app going to do, and which markets will it operate in initially? Set clear boundaries here to make the development phase more manageable.
- Clarify your compliance requirements: Once you know where you’re operating, make sure you know what you’re allowed to do in that particular market before committing to any features.
- Start building your app’s features and testing: Prototypes are a great way to get some early feedback before launching a finalized version of your product.
- Launch your product: This could be an MVP or a fully-fledged product launch, depending on where you are in the development cycle.
- Test and gather customer feedback: What does your user base like about your app? What’s driving them away? Use both targeted testing tactics (user panels and surveys, for example) and more general feedback (e.g online reviews) to find and fix pain points.
- Repeat steps 3-5 for future releases: Building an app should be an iterative process: test, tweak, repeat. Whatever you add to your app after your initial launch, always view customer testing and feedback as integral parts of your process.
Do You Need To Onboard More Fintech Expertise?
If you need to extend your team temporarily – whether to create a full, working application or to cover areas your in-house developers have little experience in – why not give us a call?
At Tivix, we build customized websites, web apps and mobile apps for a range of customers. We use our global network of talent to make sure your app can meet your customers’ needs to the letter, whether you need:
- Frontend and backend development
- Mobile app development
- AI and machine learning
- Product, UX and UI design
- Project management