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7 Challenges in Developing FinTech Applications

Nowadays, mobile apps have taken over the majority of businesses and mainly their transactions & payment methods.

People are using online apps to pay their bills to reduce the time that goes behind standing in queues.

Table of Content

  • Introduction
  • What is a Fintech Application?
  • Top Challenges that Financial Technology Service Providers Face
  • Conclusion

But people are still unaware of the problems and complications that come in developing a banking application.

It is not that simple as it looks. To stand out in the market, businesses and financial companies have to try it more as fintech is the latest growing trend. Besides, there are various challenges that come along the way of fintech software development organizations to create a qualitative financial application for companies and banks.

Therefore, it is very important to know the risks that come while curating a Fintech application. Mobile and tech expertise need to invest enough money and time to develop the right Fintech application for any company that wants to meet the latest market trends and customer requirements.

In this blog, we will go through some of such fintech challenges that the top financial services providers face while offering effective and efficient output.

What is a Fintech Application?

Fintech apps are is popularly known as financial technology apps. These apps are widely used in today’s world to carry out transactions and have changed the way businesses function. Because of these apps, the financial sector has observed an increase in electronic transactions. And the need for a more effective financial system has become the reason behind the emergence of fintech startups.

Some of the most popular fintech companies are – Lending Club, Personal Capital, Kabbage, and Wealthfront. These companies have emerged in the past decade, offering new concepts & twists in the financial industry.

Top Challenges that Financial Technology Service Providers Face

1. Data Security

Data security is one of the biggest concerns when it comes to technology and it becomes more severe when payment apps, mobile banking, and fintech are concerned. Traditional banking systems generally have security guards, vaults, CCTVs, and heavy bulletproof doors to keep the data safe and secure.

But keeping virtual data secure is difficult as it comes with vulnerabilities. As in this case, the users’ money wouldn’t have been at stake with their personal data.

The best solution for this is to establish a high-level security mobile app with the help of the fintech app development company. This app must have many factors like biometric authentication, two-factor authorization, real-time notifications & alerts, data encryption & obfuscation, and behavior analysis to make it more secure.

2. Lack of Expertise in Fintech Companies

When we talk about the financial sector, some of the financial institutions or companies don’t have proper mobile banking services. Though there are some banks that try to replicate websites, nobody would require such an application as every user would want to have a convenient and seamless option to use. This shows that the lack of expertise in fintech mobile app development services can affect the creation of applications.

The best solution for this is that the fintech companies must-have features to enable users with the right fintech app development services like NFC chip in shops, automatic scanning of a credit card, payment is done with QR-code and two-factor authentication with the use of finger-print.

3. Blockchain Integration

There are many fintech applications that are integrated with blockchain technology. Some fintech companies don’t think that blockchain is a feasible solution but others consider it for better data exchange. But the fact is that blockchain can make a fintech bank more trustworthy.

It enables businesses to analyze and track all the transaction phases and prevent changes that come along. Besides, once you integrate blockchain with the fintech app, it can be one of the efficient financial strategies, but it is a challenging task.

To date, the financial industry has been slow to pick up on the blockchain trend. But fintech startups are trying to disrupt the fintech industry.

To solve this problem and make blockchain integration an easy task for offering convenient mobile banking services, businesses must adhere to government laws and guidelines. Besides, financial services firms must avoid any government restrictions that concern mobile services as they might be hesitant to enable massive blockchain adoption.

4. AI and Big Data Integration

AI & Big Data are and will be a technology that can revolutionize the way traditional banks fetch data and interact with their clients. Using big data, companies can gather personal information about the users, habits, social status to financial behavior, and in-app activity.

All this data is important for financial institutions, especially when it comes to offering high-risk banking services and credit ratings. Therefore, using AI and Big Data can help automate the process to perform a risk analysis, detect fraud, and manage transactions effectively. But there are challenges when it comes to financial services providers implementing these technologies. They need expert developers and constant maintenance.

So, to integrate these two technologies, AI and Big Data, a financial institution will have to teach AI through machine learning. And for this, one will require large amounts of data that can train your system.

5. Effective Marketing Techniques for Financial Industry

Generally, fintech companies fail at understanding their niche, strategies, and target audience. Still, people choose traditional fintech software and it is hard for the banking industry to overcome this challenge.

Therefore, if you want to enhance your business and its strategies, you must make sure that your system is better than your competitors. And for that, being a business owner you will have to invest a lot of effort, money, and human resources.

Only then you will be able to offer seamless services to your customers. Besides, offering unique global digital payments transactional products can make you increase your user base. So, coming with a strong and effective marketing strategy can allow you to boost your business’s awareness.

6. Personalized Services for Financial Institutions

Personalized services are the best ones to offer the customers, especially when it comes to offering the primary and core factor of the banking sector. Personalization is the best way to attract users and interact with them at the right time on their preferred channel. By offering customization, finance companies can offer a proper solution to the users’ exact needs.

To fulfill this and offer customization, fintech organizations must have specific client insights and they must understand their behavior. This can help gain customers’ trust and keep the user’s data safe and secure.

7. User Experience and Retention

User retention and user experience are the two most important things for financial organizations as they can help them manage a balance between security and user experience. Because of this many prominent fintech companies offer a mobile app banking service that is easy to access.

Besides, when any company from the fintech sector plans at developing an application, it will have to make sure that the UI/UX part of the application is user-friendly and secure. The users must be able to access the banking apps with two-factor authentication. The app must not be asking the users’ details again and again for login as it might frustrate them.

Conclusion

As seen in this blog, with time the modern generation is becoming more aware of saving their funds for the future. And to have this, they will need smooth banking applications that can meet their requirements within a few clicks.

Besides, there are going to be some challenges as digitalization is growing every day, but these challenges are known as opportunities for many companies to outsource their Fintech app requirements and develop amazing banking apps with the help of professionals.

So if you are a company that wants to outsource a fintech expert or financial wellness coach, you can visit sites like Clutch or GoodFirms. They will offer you a list of fintech app development services providers with their reviews and rankings. Go ahead and choose the best from the fintech market.

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