Building a Successful Fintech Product in 2021

Building A Successful Fintech Product In 2021
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With financial technologies being on the rise, numerous fintech startups struggle to withstand competition. This raises serious questions about how to build a product that won’t fail in 2021. There’s no doubt you must understand the challenges of the industry and apply the right tools.

In our guide to FinTech, we’ll look into how to build a fintech product that can stand out from its competitors and provide high-quality end products.

Fintech Industry Overview

Fintech has been maturing since the COVID-19 pandemic, helping to expand access to financial services. Over the last few years, the industry’s pioneers like PayPal, Apple, Amazon, Samsung, and others have established a strong presence in the market. However, the fintech sector is growing exponentially, with many innovators entering the marketplace hoping that they will succeed.

According to Statista, the American region has the largest number of fintech startups. As of February 2021, there were 10,605 fintech startups compared to 9,311 in the EMEA region (Europe, the Middle East, and Africa), and the global market growth rate is anticipated to be 6% CAGR to value at $26tn in 2022.

2020’s global pandemic boosted online banking and forced banks to create more efficient ways to meet consumer needs. Banks and other financial institutions have to reconsider how they execute operations and deliver services, adhering to a more customer-centric approach. Here are a few evolving trends that will help banks and financial institutions stand out.

Online Banking

The use of digital banking isn’t a new phenomenon, but the pandemic restrictions boosted online payments. According to Allison Beer, Chief Product Officer and Head of Digital at Chase, the main trends of digital banking in 2021 will grow around automation, personalization, and real-time payments. In the Chase overview of 2021 digital banking trends, it’s expected that:

  • Personalization will drive deeper engagement between customers and digital banking features.
  • Automation will become even more prevalent in 2021, improving the digital customer experience.

However, the rise in mobile apps and websites for payment transactions creates a prime target for hackers, which makes banks and finance-related businesses increase investment in cybersecurity tools.

Blockchain

According to Statista, the banking industry had the largest spending on the blockchain in 2020, with a market share of 29.7%. Blockchain technology allows banks to update data in real-time, making blockchain integration cost-effective to keep transaction records.

Blockchain-based fintech products can revolutionize the finance sector by removing intermediaries, adding transparency and security to transactions. Blockchain is already diving into the financial industry, and the Market Research Future predicts the growth of investment: “Worldwide blockchain in the fintech market is foreseen to grow from USD 231.63 million in 2017 to USD 6700.63 million by 2023, at a yearly growth rate (CAGR) of 75.2% during the prediction period”.

Fintech-as-a-Service Platforms

The digital revolution in the fintech industry gave banks and financial companies the impulse to consider Fintech software development for building solutions to stay on top of the market. Still, developing a customized solution from scratch may be expensive and time-consuming for some tiny businesses. For this reason, many software development companies now offer financial and banking platforms as a service (FaaS and BaaS). By 2021, they are a rising trend, and Aligned Market Research predicts the growth of the FaaS and BaaS market size to $43.15 billion by 2026.

Building A Successful Fintech Product In 2021 2

 

5 Must-Have Features for Fintech Apps

Considering the rise of financial technology development, there’s a competitive environment in the financial industry. So, it’s essential to keep abreast of the latest trends to stay competitive and outdistance competitors. Below are the five must-have features for Fintech apps and platforms.

1. Artificial Intelligence

With AI integrated into financial and banking apps, customers can get more personalized services. AI grants financial providers numerous opportunities to improve user experience and customer satisfaction, including predictive analysis of financial services, smart decision-making, transaction search, visualization, etc.

2. Voice-Assisted Banking

Voice recognition is becoming an integral part of any banking app. This feature does provides not only security but also enhances financial services. Instead of relying on customer service, clients can obtain information swiftly and securely by just asking the relevant digital assistant, thus saving time on getting a response to their problem.

3. Biometric Security

With digital banking on the rise, it’s vital to ensure the advanced security of online payments. Any fintech product built for banks and financial institutions must adopt any of the following options:

  • fingerprint input;
  • facial recognition;
  • heartbeat measurement;
  • palm-vein biometrics.

4. Two-Factor Authentication

Another cybersecurity feature is aimed at protecting users’ digital accounts via two-factor authentication. Securing digital accounts by sending a code through SMS or special apps is already a key feature in 2021.

5. High Speed of Transactions

The COVID-19 pandemic caused the increase in online payments in 2020: 30% more transactions were conducted compared to 2019. This growth means that online payments are essential for any bank, so they need to ensure lightning speeds of online payments to avoid losing clients. One way to guarantee a high speed can be to reduce the number of clicks required to carry out an online payment.

3 Steps to Successful Fintech Application Development

How to create a fintech app? Find the three basic steps you should follow:

1) Study the Market and Competitors

Before starting your fintech product development, conduct comprehensive research of the consumer demands and your potential competitors. By analyzing your target audience, you’ll identify what problems your product must resolve. Make sure you review your competitors’ apps so that you can learn from their mistakes and understand how to make your solution stand out from the crowd.

2) Select a Tech Stack and Plan Your Budget

While developing your fintech product, you’ll need to choose a proper tech stack that will let you deploy code quickly and scale seamlessly. The thing is that the fintech industry is growing fast, so you’ll have to adapt to the current market trends. As far as programming languages are concerned, Java, .Net, and Python are in-demand languages in different industries, including finance.

3) Find an Outsourcing Vendor

So, how to build a fintech app? There are two options available: building an in-house team or outsourcing to a custom software development company. It all depends on your expertise and resources on what approach to follow, but if your team has little tech expertise and you want more time to focus on the core of your business and marketing, outsourcing would be a perfect fit. It allows you to hire a dedicated team or extend your in-house team and avoid recruiting, onboarding, and other staff-related things. A reputable outsourcing vendor with relevant experience in financial and banking development can help you build a high-quality product quickly.

On a Final Note

The adoption of financial technology requires a deep understanding of the market trends and challenges. How to make your fintech project stand out from the competition? Firstly, understand your customer and competitors. Secondly, estimate your project costs and select a cost-effective tech stack. Finally, find a professional team that will help you create your product.

Thank you for reading!

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