FinTech companies depend on high-functioning software that not only differentiates their platform from traditional financial institutions but also ensures a great overall experience for users. When done properly, the ultimate goal is to be able to consistently revise and innovate to build a platform that’s solid all around for users.
Imagine a World With Poor Quality Software
When it comes to the role software development plays in delivering FinTech services, this is an area that truly requires full attention. Think about it like this: a software system is like the foundation of a building; to support anything built on top, there needs to be a solid base. When it comes to the software foundation of FinTech service providers, a poorly built or unkept system can lead to several problems including:
Glitches
Poor user experience
Cybersecurity breaches
System downtime
Integration issues
What’s at Stake
The list certainly runs much longer, but this gives you a glimpse into the kind of obstacles that appear down the road with poor quality or unkept software. Globally, the FinTech market is currently worth well over $165 billion. If we wanted to narrow this down to financial services in just the United States, then we’re looking at a market worth around $4 trillion, which accounts for about 7.4% of the country's GDP.
Financial services aren’t just big in North America— this is a global market with an audience of a little under 4 billion people. These services are sought after for more than just their convenience; they are necessities that people depend on which means that performance optimization is a race with no finish line for businesses.
How to Pair FinTechs and Custom Software
The demand for FinTech services is present and rampant which means that if we want to look at how custom software development enhances system performance, we have to first look at the services that depend on it:
1) Mobile Payments:
This is one of the most common services in the industry and for good reason. Take for instance that Apple Pay (48 million users), Venmo (75 million users), Google Pay (150 million users), and PayPal (377 million users) are some of the most notable providers that just about anyone would be able to recognize.
Mobile payment speaks for itself in terms of its value as it eliminates the need for physical payment methods and makes it easier for everyone to operate on the go. Additionally, these services can interconnect across multiple devices, and the more that aspect of the service grows, the more competitive this market will become.
To deliver this seamless experience that users are so drawn to, there needs to be a solid software infrastructure in place that is frequently updated to implement new features and adjust to the demand from the market.
2) Investment Platforms:
Many FinTechs offer investment platforms that allow users to manage and track their investments online. These platforms commonly use custom software to provide real-time updates on things like investment performance as well as offer personalized recommendations based on the user's risk tolerance and financial goals.
In this area, some of the most notable providers are Questrade and Robinhood, though most banks offer their own version of this service.
3) Personal Finance Management:
FinTechs who do really well in the market are the ones who create custom software that helps users track their spending, create budgets, and save money. These tools often use artificial intelligence and machine learning algorithms to categorize transactions and provide insights into the user's financial habits.
4) Lending:
Fintech lending platforms should be a focus when it comes to maximizing the use of custom software in the financial service industry. These services use systems to perform tasks such as streamlining the loan application and approval process.
This software can also analyze a potential borrower's credit history, income, and other financial factors to determine their eligibility and the terms of the loan. Super technical stuff that would be a headache to research and input manually is why they turn to custom software integration.
5) Digital Banking:
This is pretty much standard practice for banks in 2023 and rightfully so. The introduction of digital banking changed the industry forever. You’re now able to access your bank account on almost any device, make payments, and even open new accounts from just about anywhere.
Custom software development goes hand in hand with the creation and customization of digital banking services. Beyond creating an ideal user experience, it tackles the most important asset when it comes to FinTech services: security. With these features combined and maximized, institutions will find themselves in a very competitive space with digital banking.
What’s Next?
The future of using custom software to enhance the experience of FinTech services for users is certainly a bright one. For instance, the innovation we’re seeing through AI and ML as well as blockchain technology suggests that the peak of this technology is yet to be discovered.
For FinTech startups looking to start their digital transformation journey through custom software, the best piece of advice would be to recognize what aspect of the industry you’re getting into and identify how you differentiate from competitors. With this knowledge, you’ll be able to avoid making mistakes and bad investments in systems and instead be able to dedicate all your energy towards your niche.
Written By Ben Brown
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ISU Corp is an award-winning software development company, with over 17 years of experience in multiple industries, providing cost-effective custom software development, technology management, and IT outsourcing.
Our unique owners’ mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.
