How to Build a Fintech App: Development Guide

Overview

Who isn’t fond of numbers? Everyone, I guess. Unfortunately, not everyone is capable of handling money; whether it was back in time when lots and lots of gold coins were kept in chests, to paper money and taking care of investment portfolios. Thanks to the evolving concepts, such as fintech or financial technology. The pace and speed of innovation is pretty unmatched from mobile banking to peer-to-peer lending, AI-powered robo-advisors, the Fintech industry definitely seems to have revolutionised completely over the decade, and the way we manage our finances now is way better. For example, you no longer have to spend hours and hours waiting in line at the banks. Everything now seems to be easily accessible and convenient financial services, which are precisely tailored in regards to each user's preferences. Did you know approximately more than 500 fintechs are launched every year, and the numbers keep on growing with new players entering the field.

The following post is for those who are still wondering what exactly fintech development is, how it is beneficial and of course, how one can develop a sustainable and successful fintech app to stay competitive. And 2025 is the year where investing in a fintech development project will make a strong comeback, especially after the uncertain dynamic dip.

Fintech Development - A Booming Market

After the massive COVID-19 hit, the priorities have certainly changed to a great extent. The ramifications of wide-scale lockdowns, precise travel restrictions, working from home scenarios, have led to severe banking challenges worldwide.

In simple words, the tectonic shift has resulted in a business paradigm, we can witness a new range of services spawing and approaching to address consumer needs. With easy access to mobile banking, convenient digital payments, and money transfer tools, Fintech is gaining momentum like never before.

What is Fintech? In short, for financial technology, this is about enhancing your financial services to a great extent. Unlike traditional financial services, it is possible to conduct quick and easy online payments and transfers, financial planning applications, insurance, financing, money management programs, and much more. In addition to all this, fintech offers absolute data processing and enhanced customer security, which apparently means the chances of fraud protection are pretty less.

Types of Fintech Apps

• Wealth and investment apps

• Mobile Payments

• Lending Apps

• Insurance Apps

• Personal Finance Apps

• Cryptocurrency apps

• NEO Banks

Why a need for a Fintech App?

It may quite interest to you to know that back in 2021, the fintech investments hit around $91.5 billion and by the year 2028, it will hit $16,652.68 billion. Why is now the time to develop a fintech app? Down below I would like to give you a few compelling reasons to do so.

Reason 1: Financial Illiteracy

Many of you often have this misconception that, with the growing student loan crisis and international economic tensions, people are expected to be more educated regarding managing their finances, which is certainly not the case. Financial Literacy Survey reveals that 47%, among which Gen Z holds the lowest financial literacy and baby boomers rank the highest.

As per the millennials, 76% do not have a basic education and imagine these people being in charge of the world economy.

Reason 2: Penetration of mobile devices

Do you know how many people across the globe use mobile phones these days? Around 5 - 7 billion, and the numbers somehow just keep on adding up. So this is quite justifiable, stating that the world craves for more and more apps, and most of them require having a strong internet connection, so it is quite safe to assume that smartphone users tend to have proper internet access.

Of course, in comparison to apps used for shopping, education, and healthcare, fintech apps haven’t gained much hype since they are not endorsed or limited to banking services such as managing bank accounts, making online payments, transfers or creating proper budgets. However, there is a large room for improvement; all you need to do is try incorporating more creativity.

Reason 3 - Open Banking

Earlier, people have always had to go to the bank, be it was a trivial matter or an important one. By going digital, banks are lessening the burden on the commoners by bringing services to their fingertips. Open Banking is the new approach.

Banks now do understand the significance of being interconnected. Here, the data is precisely incentivised and remains highly relevant to the end customers in the current digital age. In the present scenario, millions and millions of dollars are being invested in developing fintech APIs which assist well in developing value-added banking services:

• Real-time capital management

• Mobile credit score monitoring

• Loan processing

• Treasury management

Benefits of Fintech App - As from the customers perspective

• Personalized services

• Great convenience and speed

• Easy access

• Great technology

• Absolute transparency

• Addition of new products and services

How to Develop a Successful Fintech App?

I am sure you must be tempted with the concept and eager to build your first custom mobile app development, so without wasting any further time, let’s get started!

Now, for example, let us believe that you are willing to develop a rental management app. One kind of app enables users to keep tabs on prospective tenants as well as their credit scores. In addition, you need the app to successfully accept leasing security deposits, place them successfully in escrow, the ability to renew contracts for the chosen tenants and a lot more. So basically, here are a few things which the app needs to do right away!

• Encrypted User authentication

• Use multiple failover redundancies, which can result in secured hosting

• Keeping tabs on the Credit score

• Access to banking data and real-time transfers

• A highly secure payment gateway

• Instant communication channels

Now let's get started with the step-by-step guide here.

Step 1 - Authenticate and manage users

The first and foremost step to consider is to successfully authenticate and manage users. In simple words, you are developing a skeleton on which muscles and organs will hang. You can even call it the scaffolding tool of choice when it comes to developing a successful app. Moreover, here you are bound to receive a highly secured user authentication, management and crash reporting. Also, in this stage, you need to decide on how to create the rich user experience.

Step 2 - Secure hosting

Now this is your engine room. This one is a well-encrypted cloud-hosted database solution when it comes to the app development project. In addition to exceptional development and user experience, it ensures automatic scaling, so in other words, high performance and simplified app development procedures are guaranteed.

Step 3 - Integrate credit score checking

Here, you tend to offer a consumer-facing API which successfully assists in pulling credit scores as well as credit reports. Try incorporating Credit Systems, So what you are bound to offer is:

• Full credit reports

• FICO scores

• Check on public records

• Ability to make credit inquiries.

Data accessible using the API includes:

• Pre-Employment Credit Reports

• 4506T IRS Tax Transcripts

• SSA89

• Social Security Number Verifications

• Criminal Searches

• Eviction Searches

• Decision-only Credit Reports

• Motor Vehicle Records

Step 4 - Access Bank Account

Have you come across plaid? Plaid connects the app to relevant bank accounts. Now, this is a major API in the fintech industry. After the inception of Plaid, several activities which were difficult to achieve previously are now pretty easy to do it. It’s very agile where risks are pretty minimized and development automatically speeds up since all user financial data is consolidated on a single platform.

Step 5 - Set up the Payment gateway

I am sure you must be well acquainted with Stripe, which is a global payments processor. Stripe features a variety of payment service providers into one specific solution. So what happens next is you no longer require store credit card details, and all this is highly compliant with PCI certification. It integrates with Plaid.

Step 6 - Implement chat

Using successful natural language processing and machine learning, it is possible to automate customer services with the help of Chatbot’s API. Since this is powered by machine learning, all kinds of complicated tasks can be well taken care of such as tenant pre-approval processing using open source libraries like Python scikit.

Step 7 - Adding bonus plugins

Check out the intuit API, this can offer you financial management for the landlord’s dashboard, they are known for Quickbooks and Mint as well.

Step 8 - Considering legal obligations

Lastly, when you are conducting an app development project, you need to understand that you will be in charge of tons and tons of sensitive data, which, if it falls into the hands of the wrong guys, can lead to severe destruction.

• Are you well aware of all legal agreements, especially in regards to accessing users’ financial data using these APIs.

• Have you created a data privacy and management policy?

• Secure a well insurance policy too

• What about the disaster recovery and business continuity plan?

Remember this, it is not limited to providing services, your end users are placing their life’s savings in your stewardship. Taking these extra steps can definitely work wonders and assist you in walking further on the long way.

How do fintech companies make money?

Fortunately, there is a wide range of revenue streams available, and some of the common and best ways to generate income here include:

• Transaction Fees

Fintech companies tend to charge fees for facilitating numerous financial transactions. Everything from peer-to-peer payments, foreign currency exchanges, stock trading, and every such thing is included here. Although you can think of charging a small amount or lets say some kind of a flat fee while each transaction is carried out so that users can engage seamlessly and in more interesting manner.

• Subscription Models

As a reputable fintech company, you can even consider offering premium services using different subscription models. So here your customers need to pay fees at regular times so that they can have easy access to all the advanced features, enhanced security, or personalised financial advice. Of course, the basic version is available for free but the premium subscription one comes with an additional range of tools and insights.

• Data Monetisation

Lastly, fintech companies often end up collecting as well as analysing large amounts of financial data. So when these tons and tons of data are monetised, it is possible to generate accurate insights, not just that you can offer a scope of future trends, & analytics based on the insights to third parties. So this is how it is possible to make more and more informed decisions and come up with newly developed financial products.

Final Words

So this is all for now! The fintech market is growing at a phenomenal pace, and with more and more consumers opting for it, there has been observed a sudden rise in its demand has been observed all across the globe.

You simply cannot ignore ever-evolving fintech trends such as intelligent budgeting apps, digital neobanks, online insurance companies, electronic wallets, online trading platforms and of course, conventional and cryptocurrencies. So all you can do is ride this wave of endless opportunities.

Are you ready to build a fintech app and contribute to shaping the landscape of the all-digital economy? All you need is the right idea and to seek assistance from a reliable, competent technology partner; I am sure you will admit that developing a breakthrough fintech app has never been more real. And we are done for now!