The Scope Of Fintech App Development And Why It Matters
15 Jul 2022 | Mobile App Development
‘Fintech’ is a term getting more traction and probably a buzzword thought to be understood only by a few tech-savvy persons or clued-up entrepreneurs.
But if you take a step back and see it clearly, Fintech is neither a buzzword nor a term you can’t familiarize yourself with. It’s probably not in your dictionary yet, but if you split it as Finance and Technology, you’ll get a handle on it.
When it comes to the scope of Fintech app development, it can be not very clear to many people. The good news is — if these areas are confusing to you, don’t worry. Today, we’ll discuss more on Fintech, Fintech app development, and everything that surrounds it.
Fintech, an abbreviation of Financial Technology, is a term used to refer to the emerging industries that use technology to improve the delivery of financial services.
Therefore, Fintech app development is the creation of software applications that helps financial companies take advantage of technology to advance the provision of financial services.
Understanding the main areas of the Fintech industry is the first step to recognizing the scope of Fintech app development. These areas include the foundation of companies that create Fintech applications.
There are six key areas that Fintech apps revolve around, which include:
This understanding is crucial because a Fintech app is an entrepreneur’s creativity in developing a software solution that solves users’ problems in these industries.
So, let’s now dive right into the scope of Fintech app development and the challenges facing this industry.
So, let’s get started!
The scope of Fintech app development is the extent that Fintech applications offer financial services for companies that want to leverage the benefits of technology.
FinTech is not a new industry but a large one that spans numerous others while leading to the growth of others. Sectors like banks, payments, lending, insurance, savings, cryptocurrency, and blockchain are examples that FinTech has had the most impact on.
But, which financial services?
The banking sector continues to reshape innovation in the banking sector through open banking. Open banking allows third parties to access bank data through Application Programming Interfaces (APIs) to allow other financial institutions or banks to provide financial services through their technological platforms.
Innovation in Fintech is possible when the banking sector relies on data networks instead of data centralization. This innovation has allowed more customers who securely use these ‘open data’ for various other financial services.
As more and more banks continue to provide more open APIs for their services, many startups have taken advantage of these opportunities to develop apps to offer better services innovatively.
Cryptocurrency has an impact on the global finance industry. It offers a low fraud risk, faster transactions, and few interventions of intermediaries between transfers. Thus, it has become more attractive to companies in the financial business.
Financial institutions of all sizes embrace the speed and security of blockchain technology, creating new opportunities to take advantage of the distributed ledger systems used by these digital currencies.
While it is not only the technology behind the cryptocurrency that has attracted a whole range of companies within the banking and FinTech industries, these digital currencies have also gained more attraction.
While cryptocurrency is not at the top of the current trends of Fintech app development, it is quickly rising to reach there. Therefore, it is a powerful technology with tremendous potential for revolutionizing the industry.
Insurance is typically financial risk management. The insurance industry encompasses all the businesses whose main aim is to protect their customers from financial loss.
Insurtech is a subset Fintech industry, using technology to automate the acquisition and use of insurance policies to level up the cost of risks to offer highly customized policies and dynamically optimized premium pricing.
Insurtech app development is growing because the industry is believed to be ripe for disruption and innovation. Thus, it explains the increasing investment in the insurance space.
Experiments with automation like the early adoption of Robotic Process Automation (RPA) in software development speed up most insurance processes. However, the current application of AI and Machine learning has revolutionized the core functions and productivity in the industry.
Insurtech app development is geared towards utilizing these technologies to improve key decision-making processes in underwriting, claims, pricing, and other related areas. This technology will also enhance the customers’ experiences while reducing costs and speeding up insurance service delivery and development.
Financial Technology has made it easier to make cross-border money transfers through peer-to-peer platforms between individuals or businesses. Fintech app development has provided an efficient way to send your money faster and more conveniently to anyone.
Even interbank transfers no longer require doing business only on a timeframe — technology in finance allows doing such money transactions outside the banks even during non-business hours. Thanks to mobile banking and top-notch app development, users can now make money transfers a breeze at the touch of their fingertips.
Regulatory Technology is a subset of the Fintech industry that allows more businesses to enjoy a secure and cost-effective solution to cope with the rising regulatory reporting. Regulatory reporting lets companies monitor their data to meet strict regulatory requirements.
As more and more companies face penalties and fines through their inefficient regulatory reporting procedures, they now look into technology to automate their data monitoring processes. As a result, Regulatory data monitoring using technology becomes Regulatory Technology or Regtech.
There are more rising challenges for banks and other financial institutions resulting from regulations against money laundering and terrorisms funding. So, it is an industry that many financial institutions look forward to creating beneficial applications that use AI/ML to respond to these demands in regulations.
As technology reaches every corner of the world, technology has become the standard in every industry. Nowadays, people treat businesses equally, regardless of size, and technology will make equalization possible.
Small businesses with great technology can quickly overtake larger companies that have not yet embraced or have limited leverage on technology. And the good news is that it is now cheaper to appreciate technology for your Fintech business, from setting it up to expansion.
The proliferation of cheap but powerful smartphones means that people are now more likely to need several Fintech applications on their phones. Coupled with the fact that people now expect to handle their finances conveniently, mobile app development also matters.
That means — Fintech is crucial — and mobile applications are the easiest ways to leverage them in your business. Why? Because turning a device that thousands of your users own is a revolutionary strategy for your business.
Additionally, no matter your business size, Fintech is a great leveller. You can now enjoy the opportunities that were only accessible to big businesses in the industry just a few years ago.
The growth in the Fintech industry came with more serious concerns that are worth considering. These include security, costs, integrations, compliance, and user acquisitions. Let’s check them one by one:
Cybersecurity is the leading concern in app development. The vulnerability of Fintech apps has increased, adding more doubts to more doubts to companies yet to embrace this power of technology.
Data security is especially a primary concern to the Internet world in general. In Fintech app development, data security is more virtual and employing the earlier solutions like more robust doors, security guards, or CCTVs to safeguard the data is impossible.
While this is a severe concern, technological advances make it harder for cybercriminals to access the data.
At Aveo Software, data security is our priority. We have gathered enough expertise to establish a high level of security for all our Fintech app development. Whenever possible and reasonable, we will often consider the following and many other factors to secure your data:
Cost is often the most significant factor many companies consider a top consideration when building a Fintech software application. The reason is that funding is a mandatory requirement to meet the demands of your business and the app development market.
When not planned, organized, and studied carefully, costs for software development can skyrocket quickly. However, if you do your due diligence, you can improve your odds of choosing the ideal software development company.
It’s typically impossible to escape the eyes of your government overseeing the financial sector. While this seems like a simple concern, everything will turn upside down if your software application goes against the legal regulations in your industry.
Thankfully, it is easy to get legal consultants or experts in any part of the world who will help you understand all the policies and regulations around the industry. So be sure to do your due diligence to avoid what you will create in alignment with your government’s latest legal policies.
There’s a lot to expect soon for Fintech apps. From more integrations of Artificial and Machine Learning to embedded finance and pay-as-you-go eCommerce platforms, Fintech will continue to soar.
Just as the scope of the Fintech industry is broader, Fintech app development will continue to widen with the growing demand. Therefore, app development costs may rise as micro-industries keep rising each day.
Furthermore, Android users keep growing daily, and more Fintech companies find it more beneficial to create apps for the millions of their users already using the platform. As a result, a company can access a large pool of users to provide a better user experience by leveraging technology to share their services at the convenience of their users.
