How to get into Fintech?

Entering the fintech market is a challenge for both tech entrepreneurs and established financial companies because that is a place they meet fierce competition. Emerging financial software companies explosively pop up around the globe. The fintech industry soared in 2021 after the Covid-19 pandemic, so the global fintech investment nearly doubled over the past two years. Now, the question arises: how to earn a spot in the booming market?

Smart IT have partnered with a number of international fintech companies and banks, allowing them to enjoy fruition despite the intense competition. So we will break down a reliable action plan to help you build the foundation for your fintech initiative, whether it considers financial app development or finance software development. 

Where to begin:

1. Choose your niche market
2. Check legal regulations 
3. Select technologies to adopt
4. Gather the team
5. Iterate and test your solution

1) Choose your niche market

The landscape of the fintech industry is abundantly diverse. The variety of forms of businesses and technologies allow new fintech companies to choose the most approachable subsector:

• Payments and transactions services

According to Statista, digital payments is the largest branch of fintech. The market has surged due to the growth of e-commerce. Fintech app development companies craft online payment solutions to empower customers with cashless, streamlined, and safe money transfers. This category mostly entails cryptocurrency apps, e-wallets, and cross-border transfers. 

• Banking

While 65% of consumers use a traditional bank for their primary bank account, 61 percent report they are likely to switch to an online-only bank. Assuming this fact, traditional banks set up advanced technologies.

To ensure smooth customer experience, financial institutions implement state-of-the-art banking CRM software, software tools for bank account reconciliation, and applications to manage personal banking. Software, whatever its purpose is, should comply with enhanced data protection requirements in the banking industry. 

• Lending

Nowadays, a borrower access even more seamless interaction with a lender due to a loan lending mobile app. Development of such products implies optimization of the overall loan process, enabling customers to use funds in several minutes. If you plan to build such kind of app, take into account that finance lending software can be designed for either B2C or B2B consumers. 

• Investments

Investment solutions have promoted the asset management industry, making the stock market even more accessible for individuals and organizations. With robust software, investment banking becomes easy to manage. It enables a user to navigate through numerous options for capital allocation and reduce investment risks. 

• Insuretech

Individuals use digital insurance solutions to be able faster acquire insurance that covers travel, property, and health options. Developing such apps, insuretech companies digitize claims processing. The solutions for the insurance industry should also address the risk of fraudulent activities as they tend to happen. 

When you’ve outlined the niche you want to enter, conduct careful market research. Who are your buyers? Why would they choose your product and not the competitor’s app? Do you have solid fintech expertise to beat the competition? 

After that, you need to explore regional legal requirements regarding fintech software development.

2) Check legal regulations

The fintech industry is one of the most strict technology markets in terms of compliance.  Many governments rigorously preserve the finance sector from possible data breaches and cyber attacks by creating new regulations. 

For fintech software companies it’s imperative to align a product with local regulations governing FinTech. For example, in the US, the Electronic Fund Transfer Act (EFTA) regulates credit card transactions. If you want to handle crowdfunding, investigate Jumpstart Our Business Startups Act (JOBS). If you want to go global, the risk to get into the trap becomes higher. 

To eliminate the likelihood of a hazard, you can delegate to manage the compliance issues to a lawyer. Whenever you decide to get professional assistance or not, don’t forget to check legal regulations while incorporating new features.

3) Select technologies to adopt

Financial software development companies drive disruptive business models, spreading even more advanced technologies. That makes the fintech industry players run even faster. To make sure, you keep up with the other fintech software companies, your solution needs to exceed the expectation and bring unique value. How to do that?

Fintech trends are deemed to inspire and create even better solutions. Your eyes may fall on any handy feature, for instance, an AI-based virtual assistant, anti-money laundering, or two-step authentication. 

However, injecting a cutting-edge add-on implies your team is skilled enough to maintain the quality of fintech development services in a long run. One day you will also need to consider possible ways how to scale the business. Therefore, it’s better to think of team expansion in advance. 

4) Gether the team

Picking the right experts is as important as choosing the core technologies. The competence of developers will define the success of the product. FinTech is well-known for its specific architecture and strict compliance requirements that would trigger you to quit the game if you don’t have a reliable team behind. 

Thus, it would be the best option to get experienced fintech engineers from the beginning. Besides fintech development expertise, they have to possess experience in delivering cybersecurity (at least one team member). 

Hiring new employees, you can either onboard an in-house team or tap into fintech development outsourcing. Whenever you choose, remember about intense competition. Investing in your team equals investing in your business growth. Rethink your past recruitment experience. Have you faced challenges in timely filling tech positions?

If your product development needs extra minds to make the solution neer-perfect, you can address the challenge to our fintech development team. We have varied experience in financial applications and software development, moving global fintech startups and established banks forward. So, at any time, we can assist you. In any case, choosing a reliable team cut your expenses, especially during the iteration process. 

Iteration plays a foundational role in fintech product development. Let’s explore how to handle it.

5) Iterate and test your solution

Having severe legal regulations, the fintech industry doesn’t forgive mistakes. Even a tiny error can lead to millions of dollars in losses and lawsuits.

Ensure your solution pass through the three stages of testing: 

• Functional testing

Does the system meet the functional requirements and specifications?

• Performance testing

Can the solution tackle large volumes of transactions?

• Security testing

Does the application withstand external threats and risks?

Now, you are backed with fundamental information to break into the fintech market. To ensure you turn your ideas into reality, tap into a reputable fintech development company. 

WRITTEN BY

Maro Abuladze

[email protected]

#FinTech