Financial Software Development: The Ultimate Guide for Businesses

by Inna M. on Aug 9, 2024

Fintech is an industry we constantly hear about, whether or not we are actively following tech trends. And most of the mentions of fintech have to do with its popularity, profitability, and growth potential. Naturally, after hearing all that, as well as how much investors favor financial software products over many other application types, one cannot help but wonder: “Should I also join the fintech craze with a new product?”

As tempting as this idea may seem, it takes a lot of consideration and planning to make sure the venture into financial software pays off. From generating a promising app idea to adding the finishing touches to a fully developed and comprehensively tested product, financial software development is a major endeavor. Find all the information you need to succeed in the world of banking and fintech in our detailed guide to building financial applications.

Key Takeaways

The financial software market has been growing steadily for years and is expected to reach $917 billion in value by 2032.
The most popular types of financial applications include direct transactions, lending and borrowing, personal finance management, investment management, insurance, and cryptocurrency.
Key benefits of financial software development include increased operational efficiency, higher level of control, prevention of fraud, access to a wide range of integrated products, and improved customer experience.
Top technology trends in the fintech market right now include the use of AI and ML, blockchain, open banking, gamification elements, and working towards green banking.
Building a financial application can cost from $20,000 for a small API to $250,000 for a full-scale app, $50,000-$200,000 being the most common price range.
Challenges of building financial apps include finding the right gap to fill, complying with the many regulatory requirements, mitigating security risks, and ensuring a top-notch user experience.

What Is Financial Software Development?

Financial software development is the process of creating software products for a wide range of banking and financial institutions who rely on those products to streamline and speed up their operations, make them more accurate and secure, and provide users with new, more convenient ways to receive financial services without being tied to a brick-and-mortar branch.

Finance software is incredibly diverse and can range from a single-purpose API designed to be used as part of a larger product for financial operations to a full-scale financial management platform designed for corporate use. This, in particular, attracts many new players to the market, as the industry provides an opportunity to build products using smaller software elements like APIs and modules, significantly speeding up the development process and lowering its cost.

Moreover, digital products for the financial sector need to fit a specific set of security and compliance criteria to ensure that the software handles sensitive user data responsibly, conforms to all local laws and requirements for venturing into the international market, and is able to provide financial services without any delays or interruptions due to poor software engineering. This is why comprehensive testing and QA are crucial steps on the way to creating top-notch financial software, just like the development itself.

Why Is Investing in Financial Software Development a Good Idea Right Now?

Financial software applications are far from being a novelty. Companies and various institutions have been relying on software to manage their financial processes for decades now, and financial solutions have only been getting more intricate and advanced. However, we are currently witnessing the golden age of banking and financial management software, and it’s hardly a coincidence. Here are just some of the reasons why organizations should pay closer attention to this segment and add a fintech product to their portfolio:

The fintech market is estimated to be worth $226 billion, a number that has been growing steadily for years. By 2032, this industry is expected to reach $917 billion in value, meaning now is the perfect time to jump on board the financial technology train.
64% of consumers worldwide have reported using at least one fintech product. The numbers can be even more impressive in some regions: for example, 90% of consumers in China use at least one digital product for financial transactions and other related activities.
There are over 30,000 financial and banking startups operating globally, disrupting the market, and offering new ways for users to manage their personal finances and forgo traditional banking.
Compared to many other industries, the level of investments in financial software development has remained steady over the years. At the same time, statistics point towards later-stage startups being favored over early-stage ones, meaning the eventual market shakeup is inevitable and you can become part of that shift.
Partnerships and alliances have become a major focus of the financial industry. Getting attached to a prominent fintech institution by providing financial software development services or pairing different products to better meet the needs of the users seems to be one of the most effective ways to join the industry in 2024.
As the audience is growing more reliant on new financial software to access and manage their banking information, the share of in-person branch visits is on a steady decline, both in the US, the UK, and in other regions with robust and widely available financial systems.
The user base of financial institutions is growing increasingly aware of the potential security threats and will no longer cooperate with fintech companies that don’t take security seriously. Investing in custom software development allows organizations to stay on top of security trends, rapidly adopting trends like multi-factor authentication and safe data storage.
Banking and financial institutions are looking to cut costs, and while developing innovative financial software requires an initial investment, the result is the significantly reduced reliance on human labor and office/branch space, automation of financial processes, lower risk of human error, and efficient acquisition of new customers who would rather choose a company with a powerful digital presence over banks and financial companies that still largely depend on in-person visits.

Let’s explore the potential of financial software together.

Types of Financial Software Systems and Where They Are Used

As companies worldwide invest in developing financial software on an increasingly larger scale, it’s worth noting that the variety of applications and their uses continues to grow exponentially. Still, most financial applications can be broken down into several types, and here are the most common ones.

Lending and Borrowing

The lending industry has benefited significantly from the emergence of financial software. Not only has it sped up and streamlined the lending landscape by automating many of the processes, but it has also improved fraud detection, lowering the risks for all parties. Plus, many lending and borrowing applications allow direct transactions between individuals, making loans more accessible.

Payments and Money Transfers

One of the greatest achievements of financial software developers is the existence of web and mobile apps where users can make direct money transfers and payments, eliminating the middleman completely. This type of financial application is widely used for personal financial exchanges, as well as when paying for goods and services using various eCommerce platforms and online marketplaces.

Budgeting and Personal Finance Management

Being fully aware of one’s spending habits and proper budgeting are important in any era, but even more so during an economic recession. Personal finance management and budgeting applications provide users with real-time access to financial data, income and expense statistics, and purchasing trends. Most of those apps also allow users to start saving by allocating a specified portion of the monthly budget towards a definitive goal. Oftentimes, this type of software also includes financial advice to help users reach their financial goals.

DeFi and Cryptocurrency

DeFi, or Decentralized Finance, is one of the newest areas of financial software that goes hand in hand with cryptocurrency. Leaning heavily on blockchain technology, DeFi provides users with a more private and more secure way to conduct transactions. With the help of this type of financial applications, users can maintain a degree of anonymity while taking advantage of the latest and best in fintech.

Investment Management

Investment has been the subject of interest for millions of people around the world for decades, and it’s also an increasingly important part of financial application development. Investment management applications can process years worth of data in a matter of seconds and help the user make important financial decisions without the bias or impulse thinking typical for this segment.

Accounting and Taxation

Many financial software products are aimed at regular users, but this is the type of fintech app that is also widely used by organizations of all calibers. Accounting software deals with a whole range of a company’s finance management needs, including payroll and expense tracking. A crucial subsection of accounting applications is tax management software, which can be used both by organizations and individuals to calculate, prepare, and file taxes without any risk of error.

Financial Reporting

Used mainly by organizations, financial reporting software plays an important role in the company’s financial life. This type of software paints the most accurate picture of the financial health within the organization, streamlining operations and generating detailed, accurate reports whenever needed. Moreover, financial reporting software can become a valuable addition to meeting industry and government finance-related obligations.

Benefits of Financial Software Development for Your Business

Even though fintech software development is a hot topic in the IT community, it’s worth noting that developing software products for financial use is linked to extra time, money, and effort needed to make the systems flawless, ensure regulatory compliance, and provide maintenance services to keep the software functional, appealing, and reliable. Still, the idea of developing financial software doesn’t get any less attractive to companies, and it’s mainly thanks to the following undeniable benefits.

Increased Operational Efficiency

Financial software automates and streamlines processes that normally take too much of the team’s time. As the organization grows and there is more financial data to process, there are two main options for handling the increasing amount of work: to hire new personnel or invest in software that does it all more efficiently and in less time. That way, the company can save money on financial resource management while having these tasks done faster and with minimal human involvement. Moreover, most financial solutions can be successfully paired with other tools, cloud computing services, and other technologies for even better results.

Extensive and Continuous Control

Compared to the traditional way of managing the company’s financial information, which is primarily manual and leaves a long paper trail, using modern fintech solutions gives the organization an unprecedented level of oversight and control. You can be as hands-on when managing the company’s finances as you like: in any case, it is easy to track down every piece of data back to when it first entered the system. This way, you will never lose important financial information, miss vital relationships between different sides of your business, or be left clueless when you have to report to regulatory bodies.

Rich Software Integrations

One of the reasons why financial software has become as popular as it is right now is that it rarely works in isolation and can be quickly upgraded with the help of other fintech products. For example, a financial application used by an organization can have some basic accounting functionality out of the box, while features like payroll, taxation, and reporting can come from third-party products integrated into the main system. This makes the possibilities for enriching and adjusting the solution to the company’s needs nearly endless, and this microservice-based approach is becoming more popular than the monolithic software structure used before.

Improved Customer Experience

With most users having tried at least one financial application over the years, high-quality applications with rich functionality help financial institutions offer a better customer experience, attracting and retaining more customers and building a solid foundation for continued growth. A company that offers a superior product aimed at the right audience, even at a higher price, will always come out on top. Of course, there are dozens of components to a positive customer experience in a fintech product, from correct localization to sufficient accessibility. This is why UX should be treated with the same amount of attention and precision as the functionality of the product at the development stage and beyond.

Effective Risk Management

Security and risk management are two of the most pressing issues for the fintech market. As the security threats are getting more sophisticated and the potential negative outcomes are getting more dramatic, security is not something businesses can take lightly. And modern financial software continuously introduces and improves security standards, helping companies keep user data and their own sensitive information intact, offering a more secure experience to users. Timely adoption of these mechanisms allows businesses to quickly close the security gaps and react more comprehensively to potential security threats.

Quick and Easy Scalability

The nature of financial software products and the architecture they use, which often consists of microservices rather than a single monolithic structure, makes them highly scalable and easy to adjust to the company’s needs. At any stage of the company’s life cycle, you can ensure that your software can keep up with the changing operational needs. With a knowledgeable development team, you can scale the app up to accommodate a growing number of users or down when things slow down.

Access to Cutting-Edge Technologies

The range of technologies used for custom financial software development includes every technology you can probably think of. These days, developers can create innovative products precisely tailored to the company’s needs with the help of pretty much any technology available right now. From AI and machine learning to blockchain and IoT, the options are nearly unlimited, and it all comes down to the project requirements and expertise of the service providers rather than the limitations of the tech landscape.

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Key Tech Trends of Fintech Software Development

Traditionally, financial software has always been at the forefront of cutting-edge technology, and the current era of fintech applications is no exception. There are several clearly visible technology trends that are shaping the industry at this very moment, and here are the most important ones to know about.

1. Open Banking

Open banking is a fintech trend that focuses on using open APIs in banking and financial applications. Open banking provides users with more financial services to choose from while offering better security and transparency. The global open banking market is already valued at $57 billion and is expected to reach $330 billion by 2027, so now is the perfect time to add this technology to your development process.

2. Embedded Finance

Embedded finance is the practice of including fintech elements into applications not belonging to the fintech domain otherwise. Key examples of embedded finance products include lending and insurance services on car or property sales platforms, branded payment systems built into eCommerce stores and marketplaces, and subscription management in a music application. The embedded finance technology makes financial services more accessible to users, strengthens the company’s brand, and increases sales, so this trend is definitely here to stay.

3. Biometric Authentication

Multi-factor authentication has long become the norm in banking and fintech, but the latest trend is biometric authentication, which is already being used in hundreds of products. This technology helps companies kill two birds with one stone: one, it increases security by preventing unauthorized access, and two, it allows users to log into the application faster compared to using a password or other authentication methods. This enhances user experience and helps foster brand loyalty, which is integral given how stiff the competition in the fintech market currently is.

4. Cloud Services

Using cloud services in financial products is one of the tech trends that is barely noticeable to customers but makes a world of difference for companies. Moving the operations to the cloud enhances their security, helps speed up the processes, releases administrative burden on the personnel, and lowers operational costs due to no longer having to build and maintain the on-premise computing infrastructure. We can expect cloud services to become more sophisticated and to make their way into more aspects of the financial software domain, including payment processing and stock trading.

5. Blockchain

Out of all emerging technologies over the past decade, blockchain is the one that has impacted the fintech market the most. Operating as a distributed ledger managed through cryptographic hashes, blockchain has revolutionized the world of P2P transactions. Since it doesn’t require an intermediary to complete a transaction, the security of each move is thoroughly protected, and the speed and accessibility of blockchain technology have made direct transactions available to people who have traditionally been underserved by banking services. In the upcoming years, we can expect blockchain technology to penetrate even more areas of fintech.

6. AI and ML-Powered Solutions

Without a doubt, artificial intelligence and, to a lesser extent, machine learning are some of the biggest buzzwords of the tech world of the 2020s. It’s safe to say that this craze is totally warranted, seeing as ML and AI-driven financial software dramatically enhances the scope of customer services, ensures the safety of all aspects of the financial lives of users, and automates processes that would be too time-consuming or tedious otherwise.

Some of the most popular uses of artificial intelligence in fintech include managing client data, suggesting new services, performing quality control of the banking process, and catching human error. Machine learning, on the other hand, is widely used for increasing the efficiency of personalized banking, identifying unusual activity or usage trends, speeding up decision making, and conducting in-depth risk assessment and fraud prevention.

7. Gamification

The gamification industry is worth $3.8 billion in the US alone, and using gamification in various types of software has become so ubiquitous that we often use it without even noticing it. Gamification in financial applications has a lot of unexplored potential that can speed up user adoption, increase brand loyalty, and become a valuable competitive advantage in a saturated market. Common examples of using gamification in fintech include using gaming elements to conduct user onboarding, introducing games where users can win cash or prizes, and handing out badges to users who complete a specific task — for example, spending a certain amount of money in a certain category or logging into the app a certain number of times.

8. Green Banking

Green banking is an emerging trend that stems from the increasing concern for the environment of users worldwide and the growing need for businesses to comply with these changes. Digital banking and financial services are already more environmentally friendly than using cash or credit cards, which attracts environmentally conscious users. However, institutions that demonstrate commitment to environmental and social causes with not just words, but also actions, are even more likely to attract new customers.

Top Features of Fintech Development

One of the reasons why popular financial and banking applications have managed to attract millions of customers is that they offer comprehensive functionality to their users, and that functionality is not limited to just making payments or reviewing credit card records. However, when you are about to embark on a journey of developing your own fintech application, you cannot realistically include every single feature and need to make some important functionality choices along the way. These are the features most commonly included in financial and banking products:

Instant transactions — an ability to send money to another user or receive funds in a transaction that is processed within moments, not days.
Financial management tools — this can include access to credit card and spending data, investments, savings, rewards, taxation, and so on, depending on the type of the financial application.
Secure authentication, which can be carried out via multiple options. The common option right now is authentication through an OTP, but biometric authentication is quickly catching up in terms of popularity.
Dashboard — a section of the app where the user can get definitive information about their financial activities and take appropriate measures if anything requires their attention.
Reporting — using various data analytics tools, AI-based or otherwise, this feature will generate reports on a predetermined schedule or at the user’s request to display integral financial data.
Real-time updates, which are used to automatically update the user’s account information and other valuable data without having to wait or constantly refresh the app’s page.
Push notifications, a crucial part of the fintech world that allows the user to be on top of everything that’s happening in their financial ecosystem and react accordingly without any delays.
Predictive analysis — a feature that is often based on machine learning capabilities, taking user data from multiple sources and using it to generate accurate predictions and actionable tips.
Fraud prevention, which is also often based on AI and ML technologies, creates real-time alerts in case any suspicious activity is detected and requires the user to take appropriate action to prevent, stop, or reverse the damage.
Chatbots, which, once again, are typically created with the help of artificial intelligence and help the user complete a variety of actions without engaging with a real-life representative, saving time while the organization also gets to save money.
Integrations with third-party systems, ranging from payment gateways to investment modules, enhance the standard functionality of the app without requiring months of additional development efforts from the organization.

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Choosing the Right Financial Tech Stack for Custom Financial Software

The correct choice of technologies to use in custom financial software development may be more important than some think: not only does it allow you to include all the functionality and design cues that you’ve had in mind in the final product, but it also allows you to get there with a minimum amount of steps and with a smart use of your resources.

Of course, the choice of the tech stack for fintech development depends on several factors other than the goals you want to meet, including the current trends in the financial software market and the platforms where your product will be made available. In case you are entrusting the development process to your in-house team, the choice will also depend on the technologies the team members are familiar with, as you may not have the time or resources to get them to master a completely new tech stack. This is not the case when you outsource development, as an outsourced team can typically provide the necessary specialists in a matter of days. Here are the technologies to consider for your financial software development project:

Front-end: HTML/CSS and JavaScript for web applications, Swift and Kotlin for native mobile apps, React Native for cross-platform mobile applications.
Back-end: Node.js, Java, Ruby, and Python for web apps, Node.js for mobile financial solutions.
Database management: MySQL, PostgreSQL, and MongoDB for web applications, SQLite and Firebase for mobile apps.
Cloud services: Google Cloud, AWS and Azure both for web and mobile applications.
Payment gateways: PayPal and Stripe for all types of applications.
Analytics: Google Analytics, Mixpanel.
Open banking and other APIs: REST and SOAP.
Security: SSL, OWASP, PCI-DSS.

Stages of Fintech Development: The Development Process from A to Z

The process of developing a software product is a complex one, even more so when we are talking about products for the financial industry. At the same time, the process can be broken down into several essential stages, and they are all closely connected, so you cannot have one without the other. So, how is the work on your project going to go? These are the key stages of custom financial software development.

1. Ideation

At this stage, the idea for the future application is generated and validated. Even if you think you already know exactly what kind of product you want to build, skipping this stage and moving over to the next one would be a mistake. Any idea needs to be validated by gathering data from various sources and measuring the viability of the idea against the obtained data. Researching competitors and interviewing potential customers are the two most popular ways to flesh out and validate a product idea, although an experienced business analyst can come up with more. Plus, at this stage, you may see new ways to improve the product idea, which is why it requires involvement from the entire team.

2. Project Planning

This is the stage where the team once again comes together to plan the entire project from start to finish. Planning includes setting goals and milestones, identifying key project stakeholders and the areas they are responsible for, and allocating the resources needed to complete each part of the project. This is also the stage where the requirements are gathered and finalized. With the help of the data collected at the previous stage, as well as use cases and user stories, the team will round up functional and non-functional requirements that will then impact every subsequent stage of the development process.

3. Design and Prototyping

This stage of the process is all about the way users will interact with the product. A skilled UI/UX design team will analyze the requirements, user feedback, and other sources of data to fully understand what users expect of the product and how to communicate with them in the most accessible, efficient manner. The design team will produce wireframes, clickable designs, and prototypes, depending on the scope and size of the project. The project stakeholders will then collaborate to agree on the designs that should make it into production, often relying on newly collected customer feedback to make the final decision.

4. Development

This is the stage of building financial applications where the magic happens. The development team will turn the abstract idea into a usable product, one line of code at a time. They will use the technology stack picked beforehand and follow the chosen development model, which is why it’s important to have discussions about both long before the development stage starts. A team of developers who have worked together on previous projects can usually self-manage rather successfully, but putting a project manager in charge further ensures the results are consistent with the requirements and obtained just on time.

5. Testing and QA

Right now, when the competition in the market is stiffer than it ever was, releasing an untested or undertested product is a recipe for disaster. Users shouldn’t be the ones finding bugs in the product — otherwise, they will quickly lose patience and move on to a product that is free of those faults. In most modern development methodologies, including Agile, testing and QA can begin as early as the development stage starts. This allows you to find and correct bugs faster before they become too expensive to fix or before they can do any real damage to the product’s reputation.

6. Deployment and Maintenance

At this stage, the team will ship out the completed product to the users, whether directly or by uploading it to app stores. It’s always a good idea to create onboarding videos or tutorials to make sure user adoption is swift and smooth. The team should be especially aware of the user feedback at this stage and actively seek customer opinions to further improve the product. The development and testing team may be scaled down at this stage, but they still need to be present to deliver ongoing maintenance and improvements.

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Financial Software Development Cost Breakdown

In every software development project, there are many important questions to answer, including “What kind of product do we want to make?”, “Who is it for?” and “Where is the product going to be in 5 or 10 years from now?” An equally important question to consider is how much the software is going to cost to build. Unsurprisingly, there is no universal answer to this question when it comes to financial software projects because there are many factors that can affect the cost. Here are the main criteria the overall price of developing a financial product is going to depend on:

Project scope. This refers to the most critical aspects of the development process — most importantly, the features you want to include in the final product and the size of the application. For example, developing an API that will then be integrated with other products may cost around $20,000, while a full-scale mobile banking application can cost upwards of $200,000.
Secondary requirements. These are requirements that go beyond the app’s core functionality and significantly impact the application’s stability, scalability, performance, user experience, and longevity in the market. The more of these requirements need to be included, the higher the overall price will be.
Additional services. In case your in-house team has everyone but developers, you are unlikely to face any additional expenses. However, if you run a tight ship, you may need services beyond development to make your project succeed. This may include business analysis, UI/UX design, project management, DevOps, and testing. And, although you are probably not going to be employing those specialists, apart from testers, on a long-term basis, they are still going to add to the overall cost of the project.
Cooperation details. The most important one here is the cooperation model you choose for your project together with your development partner. In most cases, you will have the option to choose from three cooperation models: fixed price, time and material, and dedicated team. Here at QArea, we also offer a fixed price plus model, which combines the efficiency of the fixed price model with the flexibility of the time and material model. Other cooperation features affecting the price include the size and seniority of the team, and even the development lifecycle model you go for: projects developed under the Agile model tend to cost less in the long run.
Team’s location. When outsourcing your development project to an outside team, the location of the development partner is one of the most significant factors influencing the cost of the project. For example, US and Canadian developers are the most expensive ones and charge $150-$200 per hour on average. Western European specialists are not far behind with $100-$120 hourly rates. Asian developers are typically the most affordable ones of the bunch and charge $20-$40 for their services, but there is often a language barrier and cultural differences to be aware of. All things considered, developers from Eastern Europe — Ukraine, Poland, and Hungary — appear to be the most sensible choice in terms of rates ($40-$60 per hour), work ethic, lack of language barrier, and professional competencies.
Post-development maintenance. The work on a software product does not end with the last line of code being written or the last test being run. In order to stay on top of the market changes, respond fast to user feedback, and resolve any arising issues, there should be a maintenance team available at all times. The team may consist of just one or two engineers, but their presence is a valuable addition to the setup and significantly increases your confidence in the product.

All in all, you can expect your financial software product to cost between $50,000 and $250,000 to create. A good idea to keep the project budget lean is to start with an MVP, make the necessary adjustments, tailor the product idea to better fit the expectations of the customers, and only then proceed to developing the full-scale product.

From a flawless UI to unparalleled security — we will make sure your end product is full of strengths, not weaknesses.

Financial Software Development Challenges and How to Overcome Them

The financial industry is growing and transforming at a rapid pace. And that kind of growth is impossible to imagine without a few challenges on the way. Since the goal of our complete guide to financial software development is to give you the most comprehensive idea of what financial software development is and how to go about it, a discussion of potential challenges is an integral part of the guide. Here are the challenges companies most often encounter on a financial software development project and beyond.

Privacy and Data Security

When the application offers one-of-a-kind functionality, users can sometimes tolerate minor interface issues or localization errors. The one thing they won’t budge on is security. With how many stories we’ve all heard of people’s life savings getting stolen because of an unmitigated vulnerability in a software product, privacy and security should be treated with just as much attention as the core functionality of the product, i.e. its ability to manage financial information and complete transactions.

There is a set of measures used to ensure the integrity of user data. These include data storage encryption, multi-factor or biometric authentication, establishing a single point of entry, and using AI-powered tools for fraud detection and risk prevention. At the same time, while investing effort into the security of the system at the development stage, teams should remember that security work doesn’t end there and it takes continuous, strategic testing to make sure the application is fully equipped against potential attacks.

Regulatory Compliance

Regulatory compliance is a topic we’re hearing about more and more often, in dozens of industries and regarding all kinds of products. Some regulatory requirements, like GDPR, are used for every software product released in Europe, while others, like HIPAA, are relevant only to a specific industry — in the case of HIPAA, it’s healthcare.

Naturally, there are also regulations in the fintech market that govern the entire industry, and ensuring and maintaining compliance with all necessary requirements is one of the biggest challenges to overcome for the development team. Not only is it difficult to make sure that every component of the application complies with the very intricate regulatory requirements, but these requirements also change frequently, which means that testing for regulatory compliance should be a continuous process, not a one-and-done affair.

The exact list of regulatory requirements relevant for the fintech domain to comply with will depend on two factors: the specifics of the application and where it’s going to be available. For example, when releasing a fintech product in the US, an organization will need to comply with a string of laws, including AML/CFT regulations, consumer protection regulations, crypto regulations, AI regulations, tax laws, and state licensing requirements, among other things. The list of regulatory bodies in the US also includes many names like the Consumer Financial Protection Bureau, the Federal Reserve Board of Governors, the Federal Trade Commission, and the Office of the Comptroller of the Currency. And that’s not to mention that the UK, Canada, Europe, and other parts of the world have their own regulatory bodies and their own regulatory requirements to follow.

Ensuring compliance with industry regulations for a financial software product can be challenging, but it doesn’t necessarily have to be. Compliance testing is the most effective way to keep compliance issues at bay and avoid legal and financial trouble for the organization. Some companies choose to have an in-house Chief Compliance Officer who oversees and manages the entire compliance testing process. However, for small to medium companies, it also makes sense to outsource this task to a provider with both expertise in financial software development and knowledge of all regulatory requirements for a specific product type and domain.

System Scalability

Scalability is a crucial element of developing any software product, but it’s especially important for fintech. The product that thousands of users rely on for all kinds of financial activities needs to be able to accommodate any number of transactions and spikes in usage. Plus, scalability includes not just the application’s ability to accommodate a growing number of users and features over an extended period of time, and not just during peak load hours — it should be able to grow alongside the demand, helping the owner efficiently meet every single business goal. This is something a good software development partner should be aware of and design the product’s architecture with scalability and long-term ability to accommodate in mind.

“Performance testing is an important step towards ensuring proper scalability. At a certain stage, a new fintech system must be put under a high workload in order to see how it behaves in such conditions. It is important not to forget about this step instead of focusing on functionality and UI only. Even a flawlessly functioning system may appear to have serious bottlenecks when exposed to a bigger amount of users. Performance testing sessions help find such bottlenecks earlier and save the product from failed launches.”

Michael Tomara, QA Lead, QArea

Integration of Legacy Solutions

There are countless new financial software products released every year, from APIs to full-scale solutions. At the same time, many organizations still rely on legacy software to cover their core financial management needs or take care of a particular task. The prevalence of these legacy systems in the industry makes it tricky for developers to create software that would pair seamlessly with the existing solutions.

There are two main options to overcome this challenge. One is to build the entire ecosystem around the core system, which can pose additional compatibility challenges for the development team. The other one is to also invest effort into updating the existing software, which may take a lot of time and money but will result in more functional, stable, secure, and future-proof software.

Usability and User Experience

Financial software products are designed for the widest possible category of users, from enterprise users with significant expertise in financial solutions to regular users who have only just decided to give this type of software a try. This creates a challenge for the design and front end development teams of creating a user interface and designing a user journey that is equally enjoyable and accessible to all groups of users.

To achieve this, the team needs to create a design that makes it easy to find and use all of the functionality offered by the service, aligns with the latest UI/UX design trends, and masterfully conveys the company’s mission and message. Plus, a very important part of designing a financial application is taking care of users with special needs to make the services accessible to everyone.

Finding a Gap to Fill

Most of the challenges we’ve highlighted above are technical in nature, and therefore, the ways to mitigate them are also technical to a degree: for example, to ensure regulatory compliance, you need someone on your team with extensive knowledge of regulatory requirements in every domain, while solving UX-related challenges requires extensive knowledge of current UI/UX design trends and things users are looking for in an application. However, the final challenge is the one where technical savvy does not guarantee the desired result. Before you can even start to apply your technical knowledge, you need to find a niche for your future financial application. And that can be one of the biggest challenges you’ll encounter.

The fintech market has been growing at an increasingly impressive rate for years now, and it seems like there is an app for everything, whether it’s P2P transactions, cryptocurrency operations, or investment management. Unique ideas for one-of-a-kind products don’t appear all that often, which is why many new applications mostly rehash existing ideas. However, that is not necessarily a bad thing, because there are many cases in history where a new product shares the core idea with an already existing product, but executes it in a way that generates interest and attracts customers. This means that you can develop a personal finance or digital transactions product and still achieve success — it’s all about finding the right USP and marketing it to the right audience. An experienced business analyst can help you with both.

Why QArea is Your Best Financial Software Development Company

Here at QArea, custom financial software development and testing are what we do best. Over the years, we have worked with dozens of financial and banking products, helping owners turn their vision into fully functional applications and using manual and automated testing techniques to make sure the products were release-ready and bug-free. Take a look at our top fintech cases to see us in action.

Our cases

Loan Management System For Thrift Plus 1

Developing a web app for quick and easy loan management that can synchronize data across different servers and financial institutions and is based on our previously developed solution.

Development services for iConnect POS – Point of Sale System

iConnect POS is a great Point Of Sale app for merchants, shop owners, retailers and other sales people.

Odoo Development For An Insurance Company

Developing an Odoo solution for an insurance company that wants to streamline the processes for its partners and make sure that insurance calculations are quick, precise, and fault-free.

QA for POS Hardware & Mobile Banking Application

Complex quality assurance activities for POS hardware and mobile application of a European mobile banking service provider.

Final Thoughts

Joining an actively growing industry as a new player may seem like an intimidating task, but, at the end of the way, it takes two things to succeed: a brilliant product idea and a thorough execution of that idea. And, as a full-cycle software development company, we can help you with both. If you feel like the world of finance needs your product, get in touch with us, and let’s go over the details.

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Written by

Inna M., Technical Writer at QArea

Inna is a content writer with close to 10 years of experience in creating content for various local and international companies. She is passionate about all things information technology and enjoys making complex concepts easy to understand regardless of the reader’s tech background. In her free time, Inna loves baking, knitting, and taking long walks.

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Your tech partner needs to be well versed in all kinds of software-related services. As the software development process involves different stages and cycles, the most natural solution is to have them all performed by the same team of experts. That’s exactly what our diverse range of services is for.

The choice of technology for your software project is one of the defining factors of its success. Here at QArea, we have hands-on experience with dozens of popular front-end, back-end, and mobile technologies for creating robust software solutions.

In-depth familiarity and practical experience with key technologies are one of the cornerstones of successful software development and QA. But it also takes specific knowledge of the industry to develop a solution that meets the expectations of the stakeholders and propels its owner to success.

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