The COVID-19 pandemic will undoubtedly be remembered as a time of struggle and personal turmoil for many around the globe. Still, one can’t deny that it also spurred a lot of positive, ground-breaking changes.
Take financial technology or FinTech.
Thanks to social distancing and year-long lockdowns, people have embraced contactless payment and digital banking apps in their everyday lives.
One of the drawbacks of 2FA is that, unlike biometrics, it’s an extra step that can inconvenience some users. They also need to spend time setting it up.
To make it easier for users, you can adopt push notification-based 2FA instead of the traditional method of entering a passcode.
2FA is also not completely infallible.
While it can’t be bypassed directly, hackers can use phishing or social engineering to trick users into revealing their 2FA passcode. SMS-based 2FA also has a potential vulnerability.
If a hacker gets ahold of a user’s phone number with a takeover fraud, they can also hack into the app with a simple password reset.
Blockchain is a decentralized ledger that can log transactions autonomously and anonymously without a third-party entity.
Any data entered on a blockchain is permanent and can never be altered.
The nature of blockchain technology makes it especially attractive for a FinTech app.
Every transaction and money transfer is permanently logged into the ledger, giving your data transparency and fraud immunity.
Unlike your bank account that a financial institution manages, no intermediary maintains the blockchain.
Thus, transactions are faster, cheaper, and more secure. To top it all off, the blockchain is decentralized and distributed to multiple servers, making downtime nearly impossible.
The bottom line is this: blockchain offers a much more secure and transparent way to store and record sensitive financial data.
Given that large financial institutions have proved time and time again that they’re not as reliable as people think, it’s no wonder blockchain is becoming an attractive solution for the finance sector.
There are many ways to implement blockchain in various financial apps beyond recording transactions.
In fact, credit card giant Visa has entered the QR game by introducing mVisa in Kenya.
This free service allows mobile phone users to pay directly from their bank account by scanning merchant QR codes. It proved to be a hit, spreading to other countries and spurring MasterCard to develop a rival QR system.
The main advantage of QR codes is convenience.
Users need only scan to make payments; there’s no need to whip out their credit cards from their wallets.
Contactless payment through QR codes was especially vital during the pandemic.
QR codes are also advantageous for app developers.
For one, the technology is cheap. You don’t need any additional equipment to implement QR codes as they will work on-screen or printed. It’s also easy to integrate QR code functionality into any app.
However, you’re not limited to transactions with QR codes.
You can also expand their use to other operations like quickly linking a user’s bank account and other financial services to your app.
There are so many uses for QR code tech that there’s little reason not to implement it on your next FinTech app.
Customized, Simple Data Analytics
Giving users an overview of their financial transactions through data analytics is helpful in any FinTech app.
People need data to make intelligent financial decisions, which is vital in investment and personal banking niches.
At the minimum, apps should have a reporting feature that allows users to get an overview of their transactions for a given timeframe.
For example, if you have a banking app, it must be easy for someone to check their deposits, withdrawals, and payments per month.
The key to data analytics is simplicity.
Understanding financial data is difficult enough, so it must be presented in a way that’s easy to digest and analyze, even for a newbie.
Visuals like graphs and charts are essential here. Your app can even use AI to give helpful suggestions or recommendations.
At the same time, data analytics must also be flexible.
Users should have the freedom to customize reports and data tracking.
One example includes reporting transactions only from a specific spending category in a personal finance app.
When users feel that they’re in control of their financial data at all times, it’ll make your FinTech app much more usable.
How to Build a FinTech App
In many ways, building a FinTech app isn’t that different from any other app. There are just a few key steps that you need to consider.
Find Your Niche Market
FinTech is such a broad field that there are more than a dozen subsets you can consider. Additionally, more trends are coming in that will disrupt the industry and create even more niches.
Hence, your first decision is to sift through the clutter and pick which niche you’d like to focus on.
Rather than decide on a whim, it’s best to rely on solid market research to guide your choice.
Doing this is important because while some FinTech niches can be profitable, they can also be very competitive.
For instance, the P2P payment sector might be experiencing explosive growth, but it’s currently dominated by established players like Google Pay, Venmo, and Zelle.
Market research will tell you whether entering this niche is a good idea and, if so, how best to do it.
As we’ve explained in a previous article, thorough market research starts with asking the big question: what’s the problem of people in this niche that my FinTech app is trying to solve?
This will inevitably lead you to other questions like:
Why would they use my app?
Who are the other players in this niche?
Will it be a profitable move?
There are many ways to answer these questions, and they form the core methods of market research.
You can gather data from your target market through surveys, questionnaires, and interviews.
You can also supplement these with competitor research or studies from third-party firms.
If you don’t know where to start, there are plenty of potentially profitable but yet underserved FinTech niches you can explore.
These include lending, insurance tech, and crowdfunding.
Check Legal Requirements
Complying with all legal requirements and financial laws is one of the key differences between developing a FinTech app and any other type of software.
Understandably, most governments are especially strict when it comes to services that deal with people’s money.
Compliance should be your top priority because disregarding it can single-handedly bring your entire FinTech operation to its knees.
This is what led the U.S. Federal Trade Commission (FTC) to shut down Blue Global, LLC for unlawfully sharing personal financial data in their lending platforms.
The key to compliance is to get it out of the way as early as possible. Doing this ensures you avoid expensive fines while streamlining the development process.
The first step is to know the regulations governing FinTech in your country. Depending on which area of FinTech you’re dealing with, this can be several.
A seasoned software engineering executive, Marin’s role combines his in-depth understanding of software engineering processes (particularly mobile) with product and business strategies. Humbly boasting 20+ years of international experience at the forefront of telecoms, Marin knows how to create and deliver state of the art software products to businesses of all sizes. Plus, his skills as a lifelong basketball player mean he can lead a team to victory.
When he’s not hopping from meeting to meeting, you’ll find Marin listening to indie rock, or scouring the latest IT news.