Last Updated: February 19, 2024
Financial Software Development
Published On: November 24, 2023

Fintech is an outstanding blend of technology, business analysis, and finance. Financial software development has become one of the most popular buzzwords in today’s digital world.

Since businesses are transforming from conventional to innovative methods, the relevancy of this development method is becoming increasingly undeniable. It allows the companies to provide their services more efficiently and quickly to the clients in the online world.

Financial software development solutions are slowly gaining momentum and enterprises are turning to sophisticated algorithms and technologies for powering their products.

A personal finance software market size report by Grand View Research, estimated at USD 1.08 billion and is anticipated to reach a CAGR of 5.1% from 2023 to 2030. In other words, traditional banking is slowly getting outshined by the limitless potential of fintech technology.

What is Financial Software Development, and Why is it Important?

Fintech software development is the development and implementation of software for facilitating disruptive financial activities. It includes insurance technology for mobile payments. Fintech harnesses various technologies like Machine Learning (ML), Artificial Intelligence (AI), Big Data Analytics, Blockchain, and many more.

Can you imagine transcending all the geographical & physical barriers and transferring money with a single tap or click of a financial application on a device?

Well, FinTech offers secure and swift monetary transactions, real-time spend tracking, customized investment suggestions, and many more with ease. It empowers businesses and customers simultaneously to control their finances better by implementing innovative and modern digital technologies.

Fintech has become a popular game changer for financial businesses by making their services more accessible and redefining the customer experience more comfortably than before. In other words, it is assisting in reshaping various economic activities all across the globe.

Top 5 Fintech App Trends to Follow

The latest fintech trends include net banking, capital raising, digital payments and investments, and more. Many digital investment platforms are gaining attention by providing user-friendly and low-cost investment alternatives. The top fintech trends that need special mention include:

1. Personal Finance Management App

Nowadays, more people are seeking financial independence early in their life. Thus, personal financial management applications like Pocketguard and Mint have become a necessity for them.

It assists them in managing their revenue resources efficiently by offering real-time alerts for tracking their budget and spending habits on their devices. It gives detailed financial insights to users through features like debt management, monetary holistic views, and expense tracking.

2. Robo-advisory Platform

The robo-advisory industry is experiencing high growth and might reach USD 5 trillion by 2027. If you are unfamiliar with robo-advisory, then the platform will appear like a sci-fi movie. This digital platform offers algorithmic financial management and planning.

Robo-advisory also provides account services, portfolio management, and goal planning at pocket-friendly prices. These financial software development services do not need any human intervention to assist clients.

3. Blockchain-based Payment System

Blockchain-centric payment systems decrease the dependency on cash transactions and improve reliability & speed. Digital remittance software, POS (Point-of-Sale), mobile wallets, and many more are all subsets of different online payment solutions offered by finTech Solutions.

The contactless transaction preferences for safety concerns further emphasize the necessity of these services today more than before. The convenience of creating invoices, managing upcoming payments, and many more have made it popular among various business sectors.

4. Peer-to-Peer Lending Platform

P2P lending platform is one of the most revolutionary outcomes of custom financial software development. Platforms like LendingClub or Prosper allow lenders to lend their money to borrowers directly. It thereby helps to cut out numerous conventional cost layers related to the banking institutions. It allows better loan terms to the borrowers, offering high returns to the lenders.

In other words, P2P lending platforms are the best testament to how banking software development can turn around the traditional rules of the financial sectors. The lenders can make risk-free assessments about the borrowers and make informed decisions about them with the help of AI algorithms of the P2P lending platforms.

5. Cryptocurrency Exchange

Digital cash tokens and cryptocurrencies rely on blockchain technology, enabling the usage of computer programs called smart contracts.

It allows contractual agreements and trusted transactions among different parties with no necessity for a legal or central authority system. Cryptocurrencies allow rapid and affordable money transfers, and the decentralized systems never collapse for a single failure.

6 Phases of Financial Software Development

The fintech software development comes with its peculiarities based on its solution. The 6 phases of fintech development are as follows:

1. Idea and Conceptualization

Before creating an outline for the project requirements, it is necessary to conduct market research and brainstorm different ideas. It will help to identify what the niche audiences want from the service or product and how it can solve their problem.

Many organizations also conduct business analysis to recognize the growth points and conceptualize the idea. In other words, it will act as a guide to financial software development and will stand out from the software created by rival companies.

2. Requirement Gathering

The requirement and description of a fintech software development project includes a gist of disciplines, frameworks, objectives, and tools. The process involves conducting meetings with clients and gathering their project details, business, target customers, goals, etc.

The business analysts will understand the objectives, and requirements and create a scope for the project, highlighting the timelines and milestones of the project. By collecting all the relevant data, the technical team will create a digital strategy and its specifications. Based on the products, the team will analyze the targeted market and determine an in-depth business plan.

3. Design and Prototyping

In this stage, the designers will create the interface elements of the application with the approved visual style. They will also use the service navigation to simplify the customer’s user experience.

While creating the wireframes and prototypes of the finance mobile app, the designers concentrate on the tools, functions, and high-standard UX/UI. They create an interface of the product that even inexperienced users can easily understand.

Safety is another crucial concern while designing and prototyping the software, as the user will entrust their data and information. Thus, it requires a high guarantee against any hacking and security breaches.

4. Technology Stack Selection

After completing the app design and prototype, the coders will then include the necessary technologies, and features and incorporate the highest security measures into it.

The coders select the best technology stack that will meet all the requirements of the fintech software and define its success. They implement the most reliable and latest technology that helps the app for finance business in the long term.

However, the technology stack selection is dependent on the feature choice. Some of the popular technologies include Java, MySQL, Hibernate, financial data APIs, AWS, Node.js, Spring, Tableau, C++, WebSphere, D3.js, Oracle, trading APIs, Python, and many more.

5. Development

The development phase includes creating an MVP (Minimum Value Product). It is the software’s basic version, including all the core functionalities and features. While performing financial software development, developers first create an MVP functional prototype to understand the UX of the product before the real development.

Thus with MVP development, the developers can prioritize the vital functionalities & features, and prevent overloading to the design elements. It also assists them in making all the changes before moving on to final development. It helps them to do all the work without disturbing or reworking the lifecycle of the software development, saving them time and effort.

6. Testing

It is the final phase of fintech software development. During the development stage, many bugs are overlooked and left unidentified by the coders. However, if a financial software development company creates software and launches it for its clients without testing, then it will face major performance errors and other difficulties.

The software will stop working at its peak performance time and will create a bad outcome for the client. Thus, it is always necessary to test the final software again and again for each bug till it becomes fully error-free.

The quality analyst engineers prepare the test documentation, check the app’s compliance with the design, conduct automated and manual testing, and troubleshoot all the specifications related to the app. It will assist in reviewing different segments of the software and reduce the bugs.

Key Features to Consider for Financial Software

It is necessary to have a clear picture of all the functionality and features of the final product to create exclusive financial software. Since features always play a vital role in defining the project’s scope, it is essential to identify the best and most advanced features. They will make the brand distinguished and increase its success exponentially.

1. Account Management

Account management includes expense tracking, financial reporting, and invoice creation with the help of deep learning networks and machine learning algorithms. This feature helps to improve the efficiency and accuracy of the application even without any committed staff. It means lower operational costs and less hiring. Automatic account management also saves precious time on manual data entry.

2. Transaction Tracking

Transaction is one of the most common features that most finance mobile apps have. Whether it is software for B2B vendor management or a lending application, every user wants the feature of feasible and secure real-time payments and transaction tracking.

The app can include a QR code, in-app wallet payment, or bank-to-bank transfer for this functionality. By analyzing the data, transaction tracking provides exclusive financial insights to the users.

This feature also allows users to analyze and monitor their financial performance without difficulty. They can track their cash flow and optimize financial decision-making. This feature will also help to recognize the problem areas and reduce the threats.

3. Budgeting Tools

Including the budgeting tools in the app for finance, and business is helpful for both companies and individuals. It will allow them to manage, monitor, and plan their finances. AI modules of the software can forecast the cash flows, track the transaction results against the goals, and create the budget for users accordingly.

It will assist them in preventing any issues in the future cash flow and staying on top of their finances. Users can also create notifications and alert systems to inform them if anything goes out of hand.

4. Investment Management

With the help of the best financial software development solutions provided by artificial intelligence, one can get outstanding investment advice for their business. AI’s smart algorithm assists users in learning about past trends and data.

Based on this information, the software will provide customized investment management and advice on expense management, tax planning, and debt reduction. Investment management is highly helpful when someone is planning to introduce personal financial applications or enterprise-centric customized solutions.

5. Reporting and Analytics

Reporting and analytics are other advanced features that are present in most banking and financial software development. Analytics studies the user’s financial data with the help of statistical models, recognizes the trends & patterns, and finally creates a report for easy understanding. It will help in making proactive financial forecasting, data-centric decisions, and controlling the risks.

Users can also access insights to optimize financial performance and potential growing opportunities. It is also possible to recognize any potential threat beforehand that can damage the daily operations of a business.

6. Security and Compliance

Authorization is one of the primary methods of making your application secure through phone number or email verification, biometric authentication, OTP-dependent registrations, and more. In this stage, the user will know how safe their experience will be, particularly in the case of security. Biometric authentication prevents any fraudulent 

7. Transaction and Improves Security

Users can control their account in the financial software application once it is verified with their fingerprints, eye retina, facial recognition, or any other authentication methods. This type of security and compliance is particularly helpful in mobile banking, online, and contactless transactions.

8. Mobile Accessibility

The best way for mobile accessibility is through cloud-centric storage, enabling users to access and store data from anywhere across the globe with a smartphone & an active internet connection. It offers convenience with flexibility by working remotely and collaborating with others.

Cloud-based mobile accessibility in custom financial software development reduces the chances of theft and damage due to natural disasters. It also assists in improving data backup and security by storing the data in an offsite and easily restoring it.

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Benefits of Financial Software Development

Today’s fast-paced world is rapidly moving towards digitization. The trend of fintech software solutions has given rise to the field of fusion technology. There are several advantages of fintech financial software solutions in different sectors like insurance, investments, payments, banking, and many more. It is now time to check out some of the benefits below:

1. Efficiency

Operational efficiency is important to flourish in the highly competitive landscape of the business realm. Efficiency can decide the profit margins with the customer retention rates. For example, RPA or Robotic Process Automation significantly decreases human involvement through automatic processes.

It leads to rapid decision-making for underwriting loans or decreases the processing time for insurance claims. Blockchain-enabled smart contracts assist in faster payment reconciliation and eradicate any transaction discrepancies. In other words, fintech banking software development assists in money movements across borders with no loss in efficiency.

2. Accuracy

Maintaining accuracy can be a tedious task for giant enterprises when handling it manually. But with the help of financial software with AI outstandingly improves financial reporting accuracy. It is done by making sure the app is compliant with regulations and does not include any human errors.

Businesses need to prevent any financial penalties. Precise financial software also helps the companies to remain ahead of the tax deadlines.

3. Financial Planning

Another advantage of financial application development is financial planning. The applications provide a safe space to users by accessing the previous data and analyzing them. It will act as a guide to financial software development and inform users about their budget and upcoming planning.

4. Expense Tracking

The financial software will offer unprecedented control to the organization on the financial data. Long paper is a disaster, particularly since it is impossible to keep track of the money or need help to identify the relationships for various business aspects. Financial software can keep track of these expenses by cleaning all the unnecessary data and keeping the important ones for enhanced visibility.

It also allows the data to move between the systems seamlessly. In a nutshell, this software is the best solution for finding a specific pattern between expenses and income and consolidates the information for final financial reports.

5. Reporting and Analytics

The best advantage of next-generation financial software development includes access to real-time financial data. The user can implement AI modules for detecting anomalies, KPIs, and trends for making a data-backed decision.

It becomes hassle-free for the user to track their investments and expenses with the help of accurate reporting and analytics and adjust it with a customized solution. Real-time financial software development also helps to recognize all the financial discrepancies.

How Much Does a Financial Software Development Cost?

The cost of creating the best custom financial software development ranges from $30000 to $500000. But the fact is there is no definitive answer for the cost of financial software development. The price range varies due to numerous elements like application type, team type working on them, complexities, features, and many more. 

Fintech Software Development Challenges

Along with the benefits, fintech software development also comes with some challenges. By concentrating on the below aspects, one can move towards successful management and usage of their desired financial software. Developing software is a complicated task and needs careful consideration for a well-regulated and glitch-free app.

1. Security and Compliance

Security is one of the major concerns in the development of a finance mobile app. Since the financial data of the customers is sensitive information containing bank accounts and personal details, it can create a massive problem if it goes into the hands of the hackers directly. Hackers can use this sensitive information and cause immense damage after accessing the data

Thus, the developers should have complete security control over the software. They can use the latest and updated technologies to prevent these threats. Biometric or multi-factor authentication is the best way to handle these security difficulties.

2. Regulatory Changes

Frequent changes in the regulations are another common challenge the financial software has to face. The primary reason behind regulatory compliance is that protocols differ according to the operating countries and thus change accordingly. Thus, it is necessary to stay updated with these frequent changes and maintain critical compliance.

So, constant monitoring will help in tracking all these regulatory changes. The business should be well-accustomed to all the regulations related to the targeted market. By following these regulations and protocols, financial businesses can avoid any legal consequences and hefty penalties.

3. Data Accuracy

Fintech software development companies must ensure that the data they are providing and collecting is of high quality and authentic. It should always be accurate, relevant, and reliable to the business.

4. Scalability

The fintech software should tackle a massive number of transactions and users to be successful in this industry. It should be scalable enough to meet all the demands since, nowadays more users are adopting these services. The app should also incorporate several third-party services like credit bureaus, banks, and other payment gateways.

These services can be time-consuming and complex, leading to high delays in product development. Since market trends and user demands can change abruptly, financial software development should also have the scalability to adapt to these changes accordingly.

5. Legacy System Integration

Fintech software development often needs help in integrating data from legacy systems, which can sometimes be outdated and tough to work with. Thus to integrate and extract the data from these systems, the companies have to invest to modernize the systems or use any specialized tools.

Sometimes, the software uses numerous data sources to integrate it into the system to offer meaningful insight to the users. But without appropriate expertise and tools, it can not be easy.

6. Cybersecurity Threats

Designing the documentation and transferring the knowledge to the external provider can be exceptionally risky if the financial software does not include strong security measures. Data compliance and security are particularly vital to tackling sensitive and highly risky financial data.

Comprehensive security for the data needs a multiple-pronged approach. To completely ensure data security during financial software development, developers need to follow the best practices for proven industrial frameworks.

User privacy and cybersecurity threats are thus a big issue for financial software development as they mess up identity and accessibility issues. However, companies offering software development can handle these issues by implementing innovative AI-centric systems and blockchain technology. They help to detect fraud in many ways and thus protect the user data.

Summing Up

The financial sector’s landscape is heavily dependent upon using and developing software tools. From big data and cloud computing to blockchain technologies and AI, future financial solutions are dependent upon exclusive collections of innovative and automated software solutions.

Thus, financial software development solutions will continue to extend in functionality. It will enable outstanding decisions and bring together diversified services through the power of data and information.

FAQs

Accounting software is responsible for helping account professionals in their daily financial and accounting operations like financial reporting, invoicing, record keeping, and billing. It stores all the financial information of the business. Financial planning software assists a finance manager in analyzing and tracking a business’s financial stability and making predictions related to its future financial performance. It automates the procedure for users and helps in functions like delivering financial reports, while ensuring compliance with the accounting standards.

The custom financial application development helps to maintain the system by simplifying the management and recording of financial operations. It also makes the difficult tasks easier to complete. Custom financial software provides patterns and instruction sets that allow the financial process to be performed within a few minutes. The software also helps to streamline the reporting and forecasting for enhancing financial and budgeting planning.

Yes, financial analysts need Python. Those financial analysts who remain updated on banking and financial software development also have advanced knowledge of programming languages like Python. Python is the only common language that is used in the platform and predictive model development. Thus, to become a successful financial analyst, learning about Python is necessary.

Customer Relationship Management or CRM assists the business in tracking the interactions with the clients. These solutions are extending and converting into mobile solutions with the cloud-based model growth. CRM can track customer interactions on multiple channels and platforms including emails, usage of banking software development, telephone calls, and text messages. It automates the process of marketing outreach or data entry. The software can rapidly create emails from detailed interest rates, previous data, and other pre-existing templates.
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Jayanti Katariya

Jayanti Katariya is the CEO of Moon Technolabs, a fast-growing IT solutions provider, with 18+ years of experience in the industry. Passionate about developing creative apps from a young age, he pursued an engineering degree to further this interest. Under his leadership, Moon Technolabs has helped numerous brands establish their online presence and he has also launched an invoicing software that assists businesses to streamline their financial operations.

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