How to Develop a FinTech App in 2023?: A Guide to Action

November 18, 2022

As the financial sector continues to grow and evolve, so does the need for innovative and cutting-edge Fintech solutions. Here are some key things to keep in mind if you're looking to develop a FinTech app in 2023.

Fintech impacts industries across the globe in a storm and is revolutionizing how business operations are conducted. The broad definition of fintech is the use of technology to improve the management of finances and make it easier to perform money transactions. In addition, fintech solutions can reduce costs and generate an additional source of revenue. Thus the combination of technology and financial services is predicted to be a thrilling and rapidly growing sector by 2022.

Fintech Market Overview

We've heard it said many times about fintech being a flourishing business with plenty of potentials. However, without any proof, the claims are only words. To help you determine whether developing financial apps is the right option for you, below are a few figures to think about:

  • Sixty-five percent of Americans use online banking. (Statista)
  • The total value of fintech-related investments is estimated at $33.9 billion. (Statista)
  • It is estimated that there are 10,755 fintech startups in the Americas, 9323 in the EMEA region, and 6,268 in Asia Pacific. (Statista)
  • E-commerce is growing at around 10-12%, one of the most significant tech growth engines for fintech. (IndustryARC)

Types of Fintech Applications

Loan Apps

Loan applications facilitate the lending process by directly connecting the lending institution with the borrower. They manage everything from application processes to loan repayments.

What's unique about loan apps is that they aren't restricted to banks or credit unions. Some apps offer peer-to-peer (P2P) lending, allowing individuals to borrow money and earn interest.

Digital Banking Apps

Digital banking apps allow customers to control their financial accounts and access services and financial information without going to a brick-and-mortar location. It covers mobile and online banking, allowing customers to access services anywhere and anytime.

Digital Investment

Digital Fintech software for investment lets investors research and invest in various stocks and financial instruments. They provide relevant information for investors to make educated decisions regarding their investment plans. They also act as a platform for the process of investing.

Consumer Finance/Personal Finance Management Apps

Consumer finance fintech apps aid their users in personal financial management. They provide helpful features and tools to users to manage their spending effectively, budget their spending, and enjoy a thoughtful budget.

Capital Raising

Discussing the various kinds of fintech applications without mentioning innovative capital-raising methods is impossible. Fintech provides creative ways of raising funds without turning on traditional institutions for financing. Small and micro-sized companies can attract investors with the help of different kinds of fintech-related services.

How to Build a Fintech Application Step-by-Step?

Analyze Target Audience

Suppose you choose to develop a fintech application. In that case, you'll need to solve users' problems and distinguish yourself from the competition. In this phase, you must thoroughly research the market and determine the features you'll offer.

Choose your Niche

You've probably discovered this all by yourself if you're reading this. Otherwise, you wouldn't have read this post at all. It could require an expert in business analysis to search the market for niches that need to be explored and opportunities that others might have missed. Once you've got a concept, you're prepared to get started.

Understand Compliance

For mobile application development for fintech companies, compliance is more extensive than adhering to guidelines for app publishing on Google Play and Apple's App Store. It could also require stricter quality assurance practices focusing on penetration and security testing. It could also require more rigid quality assurance practices focusing on penetration and security testing. Depending on the target market, you must research compliance to find possible legal obstacles and limitations. After identifying them, you can adjust your development procedure to meet compliance.

Partner with a Vendor

If you need an internal team to deliver your product or its components, partnering with a trusted fintech development firm is a great idea. They'll be able to recommend open-source features that can help you get started efficiently and in a cost-effective way.

Design UI/UX

This is the time when your inner artist must shine! Select vibrant colors for your application. Include user-friendly features. Beware of clogging your dashboard with optional features. However, remember that all the features you need are available on the dashboard without the user having to do an endless search.

Test and Launch

Before launching your app, testing an initial Beta version is essential. It can be made available only to local customers or employees at your workplace. Feedback from users will aid in the correction of inconsistencies. If it's bug-free, your app is all set to go live!

How to Ensure the Security of Fintech Applications?

Fintech apps earn most of their profits through advertising. A third-party advertising network pays the app's owner. The money is also earned whenever an individual click on advertisements. Consider a few important strategies to design an efficient and safe Fintech application.

Multi-Tiered Authentication

With the advanced capabilities of organized cybercriminal gangs and their capability to hack passwords, FinTech businesses shouldn't rely solely on passwords to secure their customer's data. When developing FinTech solutions, it is essential to utilize multi-tiered authentication.

Multi-factor authentication (MFA) is a method that lets users submit two or more statements to verify their identity. A program that uses this authentication procedure validates these assertions; users can then use a particular service.

Data Encryption

Encryption is a method of security that renders information encrypted and unreadable until specific keys are created. The algorithms you can apply to encode your data include:

  • RSA is equipped with both private and public encryption keys
  • TwoFish - Transforms data into 128-bit blocks
  • 3DES is a term used to describe data that has been encrypted three times in an endless loop

Another technique that operates similarly is tokenization. Instead of encryption data into an inaccessible format, the method gives your data a distinct key. These tokens are then stored in vaults called token vaults. To make these vaults even more secure, it is possible to encrypt them.

Factor Authentication

This is a fantastic option to improve your application's security and surpass the traditional authentication process, which includes the username and password. The most commonly used method of 2FA is using a one-time password through SMS or email. Another option is a push message that allows users to sign in with a single click.

Monitor, Alert, and Block

It is essential to track every transaction and then freeze ones that appear suspicious to be reviewed later. You can develop unique fraud scoring techniques or integrate them with third-party solutions. Transactions can be classified as medium, low, and high-risk. If a transaction is considered to be a high-risk transaction, the system will deny the request. It will send an alert to the employees responsible for it, who will review the transactions in the log.

Protect Web Server

Since web servers (or application servers) are the most critical out-of-the-world devices, they are one of the most important aspects of any company. Web files should be stored on a separate drive from your operating system logs, the OS, and the other files of your system.

You may also apply a Content Security Policy (CSP). This additional security layer blocks attacks like Cross-Site Scripting (XXS) and data injection.

Signed cookies are an excellent option if you need to limit users from accessing your site but not altering its URL.

Technology Stack for Fintech App Development

The specific tech stack required for developing a fintech app will depend on the nature of the application, the particular specifications, and the budget.  But since the majority of fintech apps meet the minimum technology requirements, we can give an approximate list of tech requirements that can be utilized to build your application:

  • Backend: Java, Python, C++, Ruby
  • Frontend: React Native Node.js, Angular, 
  • Server AWS
  • Database: PostgreSQL, MySQL
  • Gateway and Payment systems: Stripe, PayPal, Braintree

The Key Takeaway

So, there is no doubt that the shift from traditional payment methods to online payment solutions is inevitable. With online payment solutions, users can cut costs and efforts. Fintech mobile applications have proved themselves as one of the top-notch solutions for all financial requirements. Fintech applications are high security, low maintenance as well as user-friendly. We hope this blog has helped you to understand all the needs for developing a Fintech application. But above all that, you must partner with a reliable Fintech app development company to ensure a successful development process.

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