How to Develop a Fintech App from Scratch: Features & Costs
Since the first launch of Nokia’s Snake game (known as the first mobile application) in 1997, the applications have gone under significant revolution. Today, there are over 1 million applications on Play Store and App Store. Since the post-pandemic, the world has completely changed, and app development has seen significant growth as the pandemic has forced every business to go online through websites and applications.
Along with every other industry, Fintech and banking have also changed a lot, and today, most of the fintech giant and banking intuitions have their own applications to cater broader market and provide their users with an enhanced service.
Fintech apps have revolutionized the way we manage our finances. From mobile banking to cryptocurrency trading, Fintech apps have made financial transactions faster, more secure, and accessible to millions.
Today, we are in the perfect era of entrepreneurs, where everyone wants to build their business and grow its pinnacle. If you’re one of those new entrepreneurs who is looking to build a fintech application and provide users with extraordinary features but don’t know how to develop a fintech app, then you’re at the right blog. In this guide, we’ll walk you through the key steps, features to include, and costs involved in developing a Fintech app from scratch.
What is a Fintech App?
Before starting, let me give you an overview of the Fintech app so you’ll know what type of app we’re talking about here.
A fintech app is any software application designed to provide financial services through digital platforms. Fintech apps include mobile banking, payment processing, investment platforms, insurance services, and even personal finance management tools.
Today, finance has become a crucial aspect of human life, and everyone wants to invest, grow and enhance their finance game. According to a survey, almost every 2nd person has a fintech application on their mobile phone, whether it’s for investing, saving, banking or expense tracking.
The above stats show how the demand for Fintech apps has grown enormously. Now that we know the demand for Fintech apps, let’s know how you can develop a Fintech app and how much investment it needs.
Step-by-Step Guide on How to Develop a Fintech App
Let’s be honest: developing a fintech app is not as easy as it sounds as you have to do it with precise accuracy and at least know what you’re doing, why you’re doing it, and how It will be unique from others.
We’ve broken the Fintech app development process into eight steps, so it will be easy for you to understand maximum things.
Here’s a breakdown of the key steps.
1. Market Research and Idea Validation
It doesn’t make sense if you just go to a Fintech app development company or hire a team of developers to develop a Fintech app without any market research and idea validation. Before diving into development, you need to thoroughly research the fintech market. Identify gaps and opportunities where your app can add value. During the market research phase, ask yourself three questions:
- Who is your target audience?
- What pain points are they facing in financial services?
- What features are your competitors offering?
Once you have a clear understanding of your market, validate your idea by speaking with your friends or target audience group to know whether they are facing the same issue or not or if it is a real problem to solve. This ensures that there’s a genuine need for your app.
2. Define Your Fintech App's Features
Once your market research is complete and you have validation for your idea, you need to decide on the features which you’ll provide to users. Features can be different for every application; it depends on your target audience and pain points. However, there are some common features for a fintech application that are universal:
- Secure User Authentication – Provide the best encryption methods to enable users to sign up and login securely with methods like biometrics (fingerprint or facial recognition) or two-factor authentication (2FA).
- Seamless Transaction Management – Having too many features means nothing if you, the users, are not able to navigate through the application seamlessly. Provide an easy-to-use system for managing financial transactions such as transferring money, paying bills, and tracking transaction history. Also, make sure users receive notifications for every successful transaction.
- Integration with Financial Institutions – A Fintech app must get connected with the banks and financial institutions so the users can use their bank accounts to initiate and complete the transaction.
- Personal Finance Tools – A fintech application must have budgeting and financial planning tools to help users manage their money better. You can provide features like expense tracking, automated savings, and personalized spending insights to add significant value to your app.
- Data Encryption and Security – When it comes to Fintech apps, data security become a necessity. Fintech apps receive sensitive information, so data security is paramount. Use robust encryption protocols to protect user data, and foremost, make sure your app meets compliance requirements like PCI DSS (Payment Card Industry Data Security Standard) and GDPR (General Data Protection Regulation).
- Advanced Features (Optional) – Depending on your target audience and app type, you can include advanced features like Investment Tracking, Cryptocurrency Wallet, etc.
Now you know about the features you need to provide in your application; the next step is to develop a fintech app.
3. Development Process: How to Develop a Fintech App
Although you know the features and have idea validation, you cannot just start developing the application by yourself. You need to build a development team with experience in financial software. Your team should include:
- Project Manager: The project manager will be responsible for overseeing the project timeline and ensuring everything stays on track.
- Frontend and Backend Developers: Developers will build the user interface and server-side infrastructure.
- UI/UX Designers: They will create user-friendly and visually appealing layouts and icons for your applications.
- Quality Assurance (QA) Engineers: The QA engineer will test your application for bugs and security vulnerabilities.
- Compliance Expert: Since you’re building a Fintech application, you’ll need a compliance expert to ensure your app adheres to the latest financial regulations.
You can hire these professionally individually. However, the best way to gather a team and ensure they are always connected with each other is instead of hiring freelancers, hire a fintech app development company, and they will solely work on your project. Hiring a development team will benefit you in several manner. Get connected with the Fintech app development team.
4. Develop MVP (Minimum Viable Product):
MVPs are the best way to get started you’re your application, and many successful companies have started with the MVPs instead of building a full-fledged app. An MVP is a simplified version of your app with only the core features and will help you to test the waters and gather user feedback without committing significant resources upfront.
5. Testing and Security:
As stated above, Fintech apps handle sensitive financial information, and you have to provide robust security encryption to secure your data. Before launching your fintech app in the market, test it in different scenarios and make sure you use encryption methods, conduct vulnerability tests, and ensure compliance with data protection regulations. Test your app in multiple rounds to eliminate any security flaws or bugs.
6. Launch and Maintenance:
Once the app is developed and tested, it’s time to launch. Launch your application on platforms like the Play Store and App Store, or you can also launch its beta version for only limited users. After launch, continuously monitor your app’s performance, gather user feedback, and provide regular updates with new features and improvements.
So, these are the steps you need to follow to develop a fintech app and launch it into the market. Now let’s move to our next part, which is how much investment you will need to develop a fintech app.
Costs of Developing a Fintech App
There is not a particular amount of investment you need as it completely depends on various factors like complexity, location of the development team, and features. Below, we’ve provided a rough breakdown of the cost of developing a fintech app:
- Development Team Costs
Development team costs differ in each region
- Developers (Frontend & Backend): Typically, $50 – $150 per hour, depending on the region.
- Designers (UI/UX): $30 – $100 per hour.
- Project Manager: $50 – $120 per hour.
- Quality Assurance (QA) Testing: $30 – $80 per hour.
- App Complexity
- Basic Fintech App: $20,000 – $50,000 app with essential features like account management, transaction tracking, etc.
- Moderately Complex App: $50,000 – $100,000 for advanced features like biometric security, bank integration, and budgeting tools).
- Highly Complex App: $100,000 – $300,000 for apps with features like cryptocurrency trading, stock market integration, and AI-powered financial advice).
This is the development cost. However, once you develop and launch your application, you need to provide it with regular updates to keep it safe from hackers and viruses. Maintenance and updates can add an additional 15-20% of the initial development cost annually.
Also, as you have developed a fintech app, you need to adhere to financial regulations, which is quite costly. Compliance with standards like PCI DSS (for payment data security) or GDPR (for user data privacy) requires hiring legal experts and implementing additional security, which can cost from $10,000 to $50,000 depending on your region and the complexity of your app.
Conclusion
Fintech apps are under the revolution, and today, the users of fintech apps have grown significantly. Today, almost every 2ndmobile user has installed a fintech, whether it’s an expense tracker, crypto platform, investing platform, or banking application. With the growing need, more and more entrepreneurs want to provide solutions to users’ pain points.
We have after reading the blog, you know the process of developing a Fintech app and will build an app. If you’re still confused or have any questions, you can contact a fintech app development company, and they will help you with all your queries. Ftechiz has built and helped entrepreneurs to turn their visions into reality.
