Types of financial applications software and common development challenges

Types of financial applications software and common development challenges
Financial application software development might be a challenging task. That is why you need to figure out what steps you need to consider before running a startup of this sort. We recommend you to read this article to clarify what your future competitors offer to their users and how you can overtake them.

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The financial technology sector is one of the few that has not been affected negatively by the recent coronavirus pandemic. Financial technology has actually developed at an even more rapid pace to accommodate social distancing requirements and the need for contactless payments.

Thinking about launching a financial startup? Well, now is a good time to implement your idea. We’ll tell you more about the main fintech app types and challenges to financial application development in this article.

What are the types of financial applications?

The financial industry has already merged technology and innovation to solve corporate needs and provide customers with an engaging experience even when dealing with difficult money management tasks. That is why there are a lot of financial application software types, each of which is aimed at achieving a specific goal of the financial corporation or its users.

Here are the main ones:

  • Payment gateways are used by eCommerce websites allowing users to seamlessly pay for their goods with their debit or credit cards using MasterPass or LiqPay gateways, or PayPal for example if there is a corresponding gateway on the eCommerce website.
  • Budgeting apps are familiar financial technologies that are usually directly connected to a person’s bank account. In this case, budgeting apps work according to the open banking approach where a bank shares users’ transactions with an app and the user gets statistical insights on his spending.
  • Financial forecasting apps are high-end technologies mostly used by banks and other financial companies. Powered by artificial intelligence, they make it possible to accurately evaluate the risks of making an investment or issuing a loan.
  • Bookkeeping software is used by all enterprises without exception, allowing bookkeepers and company owners to keep track of their expenses and profits in one place.
  • Online banking apps are popular solutions created by banks to enrich the experience of their customers and free up the bank’s support team. As a rule, these apps allow users to track their spending, apply for a loan, create an account, and make payments. Advanced online banking apps are often powered by artificial intelligence (AI) and machine learning (ML).
  • Tax management software is one of the most useful financial software applications. There are solutions that help users fill in their tax forms using pre-developed templates, and more innovative ones powered by AI are able to track expenses and profits, and they can suggest the right amount of taxes the users should pay during a reporting period.
  • Peer-to-peer (P2P) lending and investing software. Financial services app development doesn’t stop with the app types described above. There are also P2P applications that people can use to invest their money or borrow a certain sum on better terms than traditional banks may offer. P2P lending and investing is a promising industry. The amount of loans issued is predicted to reach $1 trillion by 2025.
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Best financial software applications

Here are the most popular and well-known financial applications aimed at solving money management and investment tasks. Hence, if you are wondering about building your own money management app, you need to take a close look at the future competitors.

  • Quicken. This is an all-in-one solution. With its help, users can track their budget, plan spendings, stay updated on debt, and get investment advice.
  • Mint. This is one of the most popular budgeting apps in the world. It allows users to easily track their expenses and manage their money wisely by receiving notifications of payment deadlines and overspending.
  • You Need a Budget (YNAB). If you have no budget planning skills, this app will help you develop the most important ones. The app extracts information from the user’s bank account, analyzes spending patterns, and suggests some financial management rules the user should follow.
  • Mvelopes. This is a budgeting app that suggests using digital “envelopes” to plan how much money you can spend on your needs by category each month.
  • TurboTax. This app makes the process of filing tax forms seamless and intuitive. What’s more, the users can ask for consulting services and find out what additional opportunities are available for minimizing their tax liability.
  • FutureAdvisor. This AI-powered app suggests the best investment strategies, and it can be a great support system and counselor for novice investors.
  • Prosper. This is one of the leading apps in the p2p lending market in the US. With its help, anyone is able to invest or borrow money with low risk, high returns, and simple procedures.

Read also: How to create an easy-to-use cryptocurrency wallet app

Financial application development challenges

What are the challenges to fintech application development? Every startup faces unique and hidden pitfalls. Here are some of the most common ones.

Deciding on a niche

There are a lot of financial app types and niches. What’s more, sometimes a financial app can have a lot of functions like budget tracking and investment suggesting capabilities. That is why it can be difficult to determine your niche and meet the expectations of target users.

Providing security

Security is the top challenge financial app development companies face. There is an equal need to protect both the data and the money of users. To date, blockchain and AI-powered anti-fraud systems are the top ways to secure financial applications. However, using these technologies can make the development process more expensive.

Legal compliance is another issue for mobile app development in financial services. You need to be up-to-date on the legal norms regulating the sphere of finances can’t be uninformed. There are lots of subtleties in the financial laws of each state that refer to the legal status of an enterprise providing financial services, the availability and size of the authorized capital, the availability of licenses, the specifics of taxation and reporting.

The future of financial application development

So, what will the financial applications of the future look like? According to experts, artificial intelligence and machine learning technologies will be at their core. With the help of these innovations, financial companies will be able to deliver an outstanding user experience, empower them with data-driven insights and smart money management suggestions.

What’s more, blockchain technologies are used to provide better security for users. Also, there are predictions that augmented and virtual reality will be used for fintech apps with the goal of simulating a visit to a physical bank branch. There are some that think that mobile-only banks like Ukrainian MonoBank will replace traditional banking institutions (i.e. the bank will be represented in the form of mobile apps exclusively.)

Conclusion

Ready to create a finance app using innovative technologies? Now you know more about the financial industry and the ways technologies drive it. The next step is getting in touch with a financial app development company to help you with the technical realization of your idea.

Archer Software is one of the leading financial software development companies with lots of experience in this area. Drop us a line at info@archer-soft.com to find out more insights into fintech startup development!

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