Approximately 26k of fintech startups appear every year. How many of them become successful and profitable? On average, about 10%. How to get in that 10%? Well, on the one hand, all you need is to define the needs of your potential customers and follow a certain strategy to create a product that will fulfill those needs. However, there’s more in this than meets the eye.
If you’re planning to launch your own fintech product that customers will use for many years, you’ll need the help of experts. How and where to find them? And what else to keep in mind when building a fintech app? Below you’ll find step-by-step instructions and useful tips that will give you the overall idea of what to start with and how to advance your aim. Just go for it!
3 Steps to Take Before Making a Fintech Product
These 3 steps below ultimately influence the eventual result of your work. Don’t underestimate their importance and elaborate on them thoroughly.
Step 1: Define your business need
This is what you should start with — answer the question of what exactly you want to create. Who should your product serve? What’s your purpose? To make it a bit easier — break it down into a few categories. Think of:
- End-customer. Figure out who your end-user is and what they expect from your service. Proceeding from this information, dwell on the final product and identify useful features.
- Niche. Is there a gap you can fill-in? What aspect of fintech do you want to cover? There are lots of types of financial services. For instance, payments (like PayPal or Payoneer), online banking (Discover Bank or Ally), lending and mortgage (Kabbage and Borrowell), investment (Betterment and E-Trade), etc.
- Features. There are certain must-have fintech features like biometric sign-in, user-first navigation, and data analytics. Maybe you can come up with something innovative? Something new that your customers will find valuable and convenient?
Step 2: Consider the regulations
Now you have to make sure your fintech digital solution complies with local governmental regulations (they differ in every country). Otherwise, your plan is doomed. But you need to understand that regulations aren’t bad — they serve to shield customers from financial risks and fraud. Hence, they increase your reliability and trustworthiness.
Still, a thorough research has to be done not to break any laws. Here are a few tips:
- Seek legal advice. Consult an expert who can provide you with regulatory guidance, review and prepare legal documentation, and advise on rights and obligations in case of regulatory investigations.
- Use fintech consulting. There are software development companies that also provide consulting services as they have relevant experience.
- Consider RegTech partnerships. You can also use a cloud-powered RegTech software that helps to stay up to date with all regulations’ compliance.
Step 3: Find a software development provider
You may have the most innovative and most useful fintech idea in the world, but will it make any difference if no one can execute it properly? So, how to find the best team ever with relevant experience in developing fintech products? Here are the criteria to follow:
- Expertise. The team should have experience in developing similar fintech projects and understand the specifics of the niche. Thus, don’t hesitate to ask questions about the company’s delivered digital solutions, engineers’ hard skills, and the tech stack they use.
- Soft skills. Empathy, problem-solving, adaptability, and flexibility are as important for the successful launch of your fintech product.
- Users’ reviews. They’re extremely helpful and can tell a lot about the company’s strengths and weaknesses. At least some sort of positive or negative image can be formed.
6 Phases To Build a Fintech Product
Fintech product development is a complex, time-consuming, and painstaking process. To attain such a goal, you need a plan with manageable tasks distributed to different specialists. Software development life cycle (SDLC) is used right for that purpose. It usually includes 6 phases that you and your software development provider would better follow.
Phase 1: Requirements gathering
If you’ve managed to define your business needs and clearly see what kind of fintech product you want — this won’t take much effort. Here, you and the team (including Business Development Managers and Analysts) discuss all the requirements and expectations in terms of the project — features, deadlines, end-users, costs, etc.
After that, the collected requirements are analyzed by the team — they make sure your idea is feasible and achievable and can be converted into a real product. This is followed by documenting the requirement. In general, this is one of the most important phases of development, so you all have to be on the same page.
Phase 2: Designing
The main goal of this stage is to design a detailed system architecture based on the requirements identified in the previous phase. A design Specification Document is created — it accurately describes the design of the product. It can also be used as an input to system development in the next phase.
The team is obliged to stick to this document (as well as standard best practices) so that they can complete the project successfully and comply with all the requirements. In general, the document is a kind of safeguard that protects both parties from controversies. Once the design is approved, the next phase begins — coding and developing.
Phase 3: Development
This is the most time-consuming stage of the software development life cycle — developers start coding according to the earlier stated specifications and design documents. That’s why every previous phase is so important — it ultimately influences all the following ones. Thus, if all is done correctly at the prior steps, the development goes with no trouble.
The team should also choose what kind of programming language is going to be used for the product development. For instance, C, C++, Pascal, or Java. The choice is made according to the type of your product — mobile payments, cryptocurrency, lending, etc.
Phase 4: Testing
Now it’s time for the team of Quality Assurance (QA) Engineers to inspect the system for any bugs. There are different types of tests. For example, security testing is aimed to make sure the product isn’t easy to hack. There’s usability testing for checking if the software is intuitive and user-friendly. Speed, responsiveness, and stability are also examined.
Once bugs are identified, the developers’ team fixes them all. Then the testing phase begins again until no bugs are found. In general, time spent on testing depends a lot on how well the development engineers perform.
Phase 5: Deployment
Finally, the product is ready to be put into production and reach the end-user successfully. Yes, your fintech product can go live now! But that’s not the end. First, there’s deployment preparation and procedures to make sure the code is deployed appropriately.
Then there’s a system installation itself. Finally, there’s a post-deployment review when new bugs can be found and fixed. Also, certain recommendations for the product’s enhancements can be outlined.
Phase 6: Maintenance
Even when your product finally reaches the market, it’s not the end of the SDLC. Now the team’s goal is to maintain the system and monitor its performance. When end-users report issues and problems — developers have to quickly react and repair the bugs.
Software upgrades are also included in this phase. The requirements and clients’ expectations change with time, and you have to be ready for that. So, keep your eyes on the ball to stay competitive and retain your customers!
Tips for Successful Fintech Product Launch
To ensure your product is able to bring the most positive user experience and stay competitive, it’s strongly recommended to follow the next pieces of advice:
Tip 1: Focus on security
Security for fintech is of paramount importance. Saving your time and resources on this aspect may cost you lots of money. For instance, the total amount of online banking fraud losses in the United Kingdom was almost £160m British in 2020. Moreover, neglecting security is fraught with other negative consequences like losing your customers’ trust and a completely tarnished reputation.
Make security one of your priorities when developing a fintech product. Here are the tips that might come in handy:
- Use tunneling protocols. If you don’t care about proper security protocols, your fintech company is more vulnerable to cyberattacks. Consequently, the data breach is almost inevitable. A few examples of the best of them are PPTP and L2TP.
- Use code obfuscation. Hackers often create clones of fintech apps to trick your customers and collect their personal data. Code obfuscation is used to protect your product from cloning.
- Make authorization secure. Traditional long passwords with special characters and expiration dates are a must. Biometric identifiers like thumbprints or facial recognition are beneficial too.
Tip 2: Think of APIs and integrations
By contrast with many other industries, fintech can’t function completely independently because financial services are strongly interconnected. If you want your product to be multifunctional and, hence, used by a bigger number of people, you need to integrate it with third parties. Many experts claim that API integration is the best and the most convenient method to do that.
Simply speaking, API is a set of protocols and codes for building and integrating application software. There are 3 types of them. How to choose the right API for you? First, think about what exactly you require. What’s your goal? Second, analyze what banks or services your customers use. Who can you cooperate with so you can be helpful to each other and move towards a similar goal?
Tip 3: Gather feedback
Today best companies like Amazon or Apple practice customer engagement strategies to enhance their products and come up with innovative ideas. This is also required for being informed about your users’ needs that constantly change and for maintaining a strong brand identity. Here are statistics that prove the importance of gathering feedback from your clients:
- Companies that work on improving customer experience increase their revenue by up to 80%.
- About 86% of customers are ready to pay more if the services they use are regularly improved and their demands are met.
- Clients spend up to 140% more on a brand even after a single positive experience.
In a word, customer engagement should be your one more priority. If maintained right, it’s going to make you more profit and your users — even more satisfied.
And now let’s summarize. What do you need to make your fintech product successful? First, know your target audience and keep in mind the regulations of the country you create a product for. Second, make sure you hire a professional team with relevant experience that will go through all the stages of development scrupulously and consciously. Finally, make your product secure, user-friendly, and easily integrated with other services. Ready to bring your idea to life? Good luck with that!
