The fintech sector has significantly emerged in the past decade and slowly becomes the main driver of changes in the digital financial services market. It serves the interests of both consumers and businesses in multiple ways.
Fintech as it stands
Fintech is a derivative of «financial services» and «digital technologies» and represents almost every business that uses financial technologies to improve services and automate as many processes as possible. While being at the interface between innovative business models and modern technologies, fintech has brought major improvements in the digital systems’ integrity, in automating lots of services, and in new data to enable.
What are the 4 spheres of Fintech?
The digital revolution has given rise to many fintech startups and has facilitated an enormous impact on banks and other financial institutions worldwide. It helps to reach quicker global mobility of financial services and enhance financial inclusion, which stimulates international economic growth. To “get into Fintech”, first of all, one should be sure about the course of action. Key business areas of fintech to note include:
1. Asset and wealth management
Businesses of this category provide consumers with more influence over their financial outcomes. They typically propose tax and investment planning, education and retirement planning, risk management, asset transfer and allocation, and others.
2. Consumer banking
Software development for fintech in the banking industry has affected it the most significantly. The legacy systems are more often replaced by alternative data sources and modern credit sources. Consumers and businesses need faster access to their capital, so providers use fintech solutions towards peer-to-peer lending, inbound and outbound remittance transactions, and various online and mobile payment options.
There are a lot of fintech technologies that have enhanced the insurance industry. The most valuable mobile insurance solutions driven by fintech are automation of claim processing, personalized insurance pricing, and different predictive analytics techniques.
4. Payments and transactions services
These services spare the consumers of physically attending banking institutions. Whether customers need to check account balances, make payments or transfers online, financial industry software development helps to eliminate slow and risky processes.
Once you are confident with the direction chosen, it is the best time to dive into financial software application development. But there are a number of challenges that have adversely affected the working modalities recently, and constant growth of the sector and unexploited potential may not only be advantages.
Five challenges on your way to Fintech
- Fast innovation. Modernization is always considered to be for the better. However, not that any company can quickly evolve and implement a new way of delivering services. More importantly, the focus on fintech development can easily leave behind customer needs, which, in turn, threatens business goals’ achievement.
- Raising venture capital financing. It is hard to find a reasonable balance between venture investors’ requirements and what your customers seek. Sometimes startups underestimate potential risks, have a lack of qualified management team members or reliable fintech software developers. Plus, business owners may simply don’t have adequate business objectives to pitch.
- Regulatory risk. It may come as a surprise to someone, but it is obligatory for fintech companies to obey the same serious regulations as banks. There must be a solid understanding of all regulatory hurdles and laws, and how to comply with them.
- Gaining a competitive edge. No doubt, it seems impossible for a newborn fintech company to win a competition with a giant like Amazon or Goldman Sachs. But there are spots even in the sun. A financial software custom development should be started by thorough market analysis, concentrating on existing customer pain points, and aiming to be transparent and trustworthy from the very beginning.
- Data privacy and technology issues. It is obvious for any financial software developer that cybersecurity is a matter of special concern. This applies to both company’s technology, including software and intellectual property, and customers’ private data. As fintech startups may have access to highly confidential information, a lot of risks shall be foreseen.
Smart IT is ready to be by your side
How can you get it all right? If you decide to start your fintech mobile app development, you need professional expertise and professional technology-based solutions to lean on. Here at SmartIT, we have varied experience and a solid understanding of software development fintech startups can rely on. Here are only a couple of topical cases you can discover:
- Web and mobile financial custom software development;
- Automated document management solution for banking;
- Development and customization of lending platforms;
- Fintech MVP software development and cloud integration;
- Financial asset monitoring system and mobile application and others.
From building Fintech big data solutions to delivering financial trading technology, we help financial organizations to provide more personalized services and security up to the highest industry standards. Challenge us
06 October 2021