What is Fintech?
Not that long ago, everyday life used to be incredibly different. This is especially true for financial transactions. What used to involve making physical trips to banks followed by days (or weeks) of waiting for deposits to clear has now been vastly improved by the rise of FinTech. In short, FinTech is the marriage of finance and technology in ways that make life substantially easier for consumers and financial institutions to work together. By automating processes, FinTech is all about simplifying and streamlining processes for everyone involved.
What is a FinTech App?
FinTech apps are generally mobile- or web-based applications that automate certain actions associated with financial transactions. An ideal FinTech application provides ease of use, personalization and — most critically — high-level security such as data encryption, along with solving an existing problem or fill a gap in the financial services industry.
Types of FinTech Applications
There is a wide variety of FinTech application types on the market, with the following being the most popular:
- Embedded Finance: This is exemplified by a retail store that offers instant credit and a repayment schedule for qualified buyers who purchase online.
- Investment: Robinhood is one the most commonly used investment apps around. It allows traders and investors to easily trade securities from their mobile devices without the hassle — or expense — of a broker.
- Neobanks: These are niche banking services, i.e. banks dedicated to pet lovers or sports fans.
- Mobile/Digital payments: Splitting lunch with Venmo or paying your hair stylist with Zelle are prime examples of this. So is the ability to pay your credit card bill at the touch of a button.
- Cryptocurrency: Trade Bitcoin and other cryptocurrencies in real-time with apps built for consumers.
- Financial Wellness: Keep track of your spending, create budgets and set savings goals with financial wellness FinTech apps.
- Others: PropTech apps that offer cash for your home or lending apps that match you up with the right loan for your needs also serve in the FinTech app realm.
In essence, a FinTech app is a gateway or portal to a service offered by a financial institution or a tech company. Whether it’s for money transferring, digital banking, lending, investing or borrowing, there’s likely a FinTech app out there for it.
How To Build a FinTech App
Creating a FinTech app is easy. Creating a good one that serves a need takes talent, intention and hard work. From your idea people to your development team to your business and marketing crew, it’s vital to have all cylinders firing when spinning up a new FinTech app. Here’s how.
Steps To Build a FinTech App
Following are some recommended practices for businesses considering building a FinTech app. Each element — from user experience to real-time transfers to authentication and scalability — is equally important if you’re going to create an app that people will actually use.
1. Solve a Personal Tech Problem
When looking for your niche in the world of FinTech app building, it’s important that your product actually solves a real-life problem. Stripe, for example, solved the problem of complicated online transactions by allowing companies to add a few simple lines of code to their site to accept payments. In the end, seven lines of code forever changed the way e-commerce is transacted. It’s tempting to want to build a product, but ask yourself first, “what need does this app fill that doesn’t already exist?”
2. Be Committed and Have the Right Team in Place
Many app developers simply don’t spend enough time on the business side of the equation. Before developing an app, take time to recognize your strengths as well as your shortcomings. You’ll need a team that includes business folks, project managers, architecture designers, front end developers for UI as well as a full stack or “Swiss army knife” coder. Do your homework first — there’s a lot more that goes into building a FinTech app than many organizations imagine.
3. Have the Right Data at Your Disposal
Data is the new money. It’s a form of currency that is critical in today’s high-tech landscape where elements such as Financial Data Aggregation and Instant Account Verification are must-haves. Not only do you need data, but you also need the right data, the right intelligence and a high level of accuracy. We’ll discuss this further shortly.
Are There Requirements for FinTech Apps?
Whether it’s multifactor authentication or the user experience, there is a lot to consider when building a FinTech app.
1. Be Scalable for the Future
If your app gains traction, you’ll need to consider what happens when you expand your company. During the fundraising process, it’s easy to think in the short term about what it takes to get the app off the ground. Thinking about future scalability and all the associated costs (cloud storage, etc.) will help you be successful in the long run.
2. Remember the User Experience
In the end, it’s a real person who will be using this app. It should help make their life easier in some way or another. That starts with intuitive design. Or, in other words, if it can’t be done in a couple of clicks, you might want to consider why you’re doing it in the first place. Consumers today expect frictionless experiences — AKA a dynamic user experience unsurpassed by the competition. It’s important to deliver all of this when building a FinTech app.
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Envestnet® | Yodlee®’s platform and financial API are the machinery behind financial apps, services and a multitude of use cases for thousands of companies across the globe. With access to more than 17,000 financial data sources, we provide the most comprehensive data coverage available.
