Looking for a Fintech project partner
Financial technologies are becoming more in demand. If in 2020 the global FinTech market was estimated at $7301.78 billion, then by 2026 it will amount to $31.503 billion. Businesses are aware of the importance of digital presence and are trying to invest more in Fintech. KPMG found that in the first half of 2021, investments in financial projects increased by $ 12 billion compared to the second half of 2020. But to implement a sensible business idea, not only money and innovation are needed. What is more important is a technical business partner who creates a high-quality software product. How not to make a mistake when choosing a Fintech app development company?
Fintech market overview
The main goal of Fintech application development is to modernize classic services and operations with the help of information technology. Organizations strive to maximize the use of innovation to improve the digital customer experience. For 80% of the Statista survey participants, this was a strategic priority for 2020-2021 and remains relevant in 2022.
49% of financial organizations want to use technology to expand the capabilities of data analytics. 38% — reduce the cost of operations. 25% want to improve back office processes. 19% seek to update an outdated system.
The goals may differ, but the essence is the same — to improve the work of the enterprise in order to attract more consumers and bypass competitors.
Medium named trends changing traditional money transactions:
- digital banking;
- chatbot;
- Regtech;
- voice banking;
- blockchain;
- robotic process automation (RPA);
- AI and ML;
- biometrics;
- open banking.
These technological trends are taking financial services to a new level. They provide flexible payments/settlements, accurate data analytics, faster collection/processing of information and other important processes.
Statista.com determined that the largest segment of the market a year ago was digital payments with a total transaction value of $ 5.4 million. Personal finance was the second most popular ($1.4 million). Then there was alternative lending (334 thousand dollars).
The above statistics illustrate the growing pace of Fintech adoption. The more companies are interested in business modernization, the more competition in the market becomes. It is all the more important to find a technical business partner who will create useful software for the enterprise without ignoring the legislation regulating the industry.
What Fintech rules should be followed?
Fintech app development, like the financial sector, is regulated by international and local government laws. In order to legitimately introduce technologies into banking, it’s worth focusing on official documents and getting permission from regulatory authorities.
The set of regulations depends on a particular country, state or city. The rules check the correctness of the program from the point of view of cybersecurity in order to protect consumers from risks. Let’s look at the organizations and rules that regulate the development of Fintech in the USA.
Federal Deposit Insurance Corporation (FDIC)
An institution that analyzes the work of federal financial organizations and assesses how securely clients and their confidential information are protected. This is facilitated by the adopted Consumer Credit Protection Act.
Office of the Comptroller of the Currency (OCC)
The OCC regulates the work of national and foreign banks, as well as federal savings associations. It ensures that financial firms treat consumers fairly and comply with the law “Banks and Banking”.
Securities and Exchange Commission (SEC)
An independent agency protects investors from fraud and manipulation on the stock exchange. Regulates the securities market. There are eight laws controlling the industry.
Commodity Futures Trading Commission (CFTC)
The CFTC protects customer funds by regulating the derivatives market, including futures, swaps and options. This is facilitated by the Commodity Exchange Act (CEA).
Consumer Financial Protection Bureau (CFPB)
The Bureau monitors the work of enterprises offering financial products and services to people. Protects consumers from fraud and teaches them their rights. For example, the CFPB regulates electronic transfers of funds by a special Regulation E.
Financial Crimes Enforcement Network (FinCEN)
The Bureau of the US Treasury Department fights illegal use and money laundering, as well as tax evasion. Organizations are required to follow the Bank Secrecy Act, the USA Patriot Act and the Anti-Money-Laundering (AML) rules.
Financial Industry Regulatory Authority (FINRA)
This body oversees broker-dealers, seeks to protect investors and provides integrity of the market. Ensures that the industry functions fairly and honestly. Thanks to FINRA, depositors receive complete information about the investment product before buying.
FINRA has a rule book that covers all the peculiarities of broker-dealer operations. The Register includes ethics rules, a ban on fraud, transaction instructions, anti-money-laundering methods, a Uniform Practice Code and other legal acts.
Federal Trade Commission (FTC)
A fintech product is created primarily for consumers, so their rights should be protected by FTC laws. For example, GLBA, which obliges organizations to explain to customers how data is transmitted and protected. The Fair Credit Reporting Act (FCRA) — rules for firms collecting credit data.
To check the compliance of the software with the legislation of the country in which the financial company will conduct business, it is worth hiring a lawyer with regulatory experience in this area. Find a reliable IT-service provider who knows how to ensure compliance in practice.
Features of Fintech applications
Organizations create programs with functions that are most suitable for the specifics of the business. Nevertheless, there are general requirements for systems that don’t depend on the company’s orientation.
- Security. A key feature of financial organizations, because they work with personal data of consumers and often become a target for hackers. Therefore, a fintech application must protect personal information and transactions by encryption, tokenization, multi-factor authentication, biometrics or other means.
- Compliance with the legislation. Before starting the Fintech app development, it is worth studying the regulations of the region where the product will be promoted. Such a measure will protect consumers, the reputation of the organization and prevent the receipt of fines. For example, in the EU, any system must comply with the General Data Protection Rules (GDPR). The law obliges companies to warn customers how and for what purpose their personal data will be stored.
- Simple and user-friendly product design. UX directly affects users. A thoughtful design can increase conversion by 35%, and a bad one can “scare away” 80% of visitors. When a user likes to work with the program, he/she is more likely to remain a customer of the bank. Microsoft UX designer Joanna Ngai notes: “Design-driven businesses have outperformed the S&P by a whopping 228% over the past 10 years. The bottom line, good design = good business.”
How to find a technical business partner
Advanced technologies continue to move into the financial sphere so that businesses improve the user experience. Digitalization is primarily due to the establishment of cooperation between banks, financial organizations and IT-service providers. How to find a reliable technical partner who will help to implement and support Fintech projects?
Step 1. Visit specialized websites and platforms.
Websites and social networks that collect information about IT-service providers are available on the Internet: Clutch, Good firms, LinkedIn and others. Here it’s convenient to search for a company description, their portfolio, number of employees, price range, data on industry experience, reviews, ratings and other info.
So you’ll find 10-20 companies from different regions that specialize in the development of Fintech applications and have positive feedback. Then this list have to be “cleaned” by going through these steps.
Step 2. Explore candidate sites.
The website is the business card of an IT-service provider. It contains the necessary information:
- company specialization;
- technology stack;
- offered services;
- candidates’ CVs;
- number of completed projects;
- portfolio and so on.
Special attention should be paid to Fintech projects:
- how many of them have been implemented;
- how long has the company been working in this industry;
- what feedback did the customers leave;
- what projects have been created (purpose, essence, functions, technology stack);
- make sure that the Fintech solution development process meets cyber security requirements;
- study information about the stages of work on the project.
By clarifying the selection criteria, you will narrow down the list of candidates to five.
Step 3. Contact IT-service providers.
It remains to contact IT-firms to clarify the price offer, estimate the project budget, choose technologies and development methodology. Pay attention to how
- quickly the manager responds;
- exactly and concisely does the supplier’s representative formulate the answer;
- does the interlocutor solve your questions;
- does he invite you to the next stage of communication — the Discovery phase.
Step 4. Schedule a meeting with representatives of the IT-company.
According to the results of the correspondence, there will be a couple of suitable candidates. You can plan a meeting with them in order to:
- identify the specialists who will work on the project;
- set clear project goals;
- discuss the target audience and competitors, make a list of requirements;
- issue a document on the architecture of financial software;
- estimate the budget and development time;
- outline a plan for creating software.
After this step, you’ll understand which candidate is best suited for your Fintech project, and choose a reliable technical partner.
How Andersen can help a Fintech project
Andersen is a financial software developer with more than 14 years of experience. Our specialists help companies modernize their business and achieve the perfect level of technological maturity. Our experts have implemented more than 250 projects: they have created applications for mobile banking, mobile trading platforms, insurance software and other programs. Feel free to familiarize yourself with a few cases.
Mobile banking for small and medium-sized businesses
The company has ordered a cross-platform mobile Fintech solution from the mobile app development company to replace traditional financial programs. It was supposed to be a first-class tool for small and medium-sized entrepreneurs working in the Persian Gulf region.
The Andersen team implemented the software so that entrepreneurs could conduct business on a smartphone, for example:
- issue invoices;
- make and receive payments online;
- manage salaries and conduct other operations.
Financial software developers created the platform using Flutter. The mobile Fintech application uses the client’s IBAN and integrates with VISA payment processing through its API.
The system of short-term loans
The investment firm asked Andersen to create a system of short-term loans for individuals. Engineers have developed a flexible platform integrated with credit institutions, SMS/email providers and third-party systems.
Our experts have implemented the following functionality:
- scoring;
- administration of user groups;
- control of applications and loans;
- debt collection department;
- ability to export to XLS and so on.
As a result, the customer managed to increase the number of users in 14 countries, as well as reduce overdue debts.
Wallet for digital cryptocurrency
The Andersen team has developed a global Android cryptocurrency platform. Users can buy, sell, exchange and cash out fiat currency (Bitcoin, Ethereum, Bitcoin Cash, Ripple) through partner banks.
The financial software developers have included the following functions in the program:
- buying, selling and sending cryptocurrencies;
- two-factor authentication and biometrics to protect against hacking;
- checking the cryptocurrency exchange rate;
- open API for cooperation with other systems;
- user verification to prevent fraud.
As a result, we got a high-quality mobile application that works in 40 countries in Asia, Africa and Europe.
Conclusion
Outsourcing the Fintech applications development means a high level of trust. After all, on Fintech projects, the IT-service provider works with the personal data of the customer’s clients. Due to a small error in the system, users can lose money, and the company can lose its reputation.
Therefore, it is important to find a proven technical business partner who will responsibly approach the development. He/she will prepare a risk reduction plan, as well as implement the project on time and within the agreed budget. The technical partner will create a high-quality program that will protect users and comply with the law. He/she will accompany the program after entering the market to keep it up to date. It will help to introduce new strategic Fintech solutions and develop the business in the future.
