This is How Software Developers Build a FinTech App

Between 2020 and 2030, the global FinTech market value is expected to grow sixfold from $110 billion to nearly $700 billion. In this section, we’re shifting the focus from the services offered to the technology that provides an application to deliver them. We’ll start with the basic understanding that putting together a FinTech app is not an overnight process. Many components go into its construction to ensure both the quality and security of back-end data processing and front-end user experience. 

The IT technologies used in the development of FinTech services are what have pushed the industry to succeed. When consumers experience the convenience aspect of FinTech, the front-end functions are a mere puppet. The digital mechanics behind those functions pull the strings and interconnect to provide that convenience. These mechanics and their intended results are what we’re going to cover in the following sections.

Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML are two technologies that are dominantly used in the development of FinTech applications. The main reason is because of their ability to assist with processing large quantities of data. This data is collected from both consumers and global trends which, when processed, determine the service that is delivered. Here are some of the results from these processes:

Security and Identifying fraud: FinTech platforms work while processing a very high volume of data 24/7. This raises the risk of criminal activity which could easily slip by traditional processing methods that lack the resources of AI and ML. With these modern advancements, they can trace and detect patterns in the data, allowing them to flag a cyber-criminal when irregular data is recognized. Research has shown that this technology can reduce fraud by 70% with a 90% accuracy rate in detection.

Options: Users of FinTech apps have access to insights that will give them the advice to manage their finances. This is broken down into easy-to-understand visuals such as pie charts, monthly spending tracked on a progress bar, and organizing payments to be made. Users will then get insights based on this data for how to put themselves in a more beneficial financial position.

Managing Assets: As stated previously, AI and ML stay in tune with global financial trends which they use to make predictions for investment opportunities. Users have access to this info and can choose to make investment decisions based on the advice provided.

Personalizing Customer Support: AI and ML data tracking collects user information which benefits the platform in tending to the needs of consumers. This ties back into the technology that keeps up with user habits. Ultimately, it makes customer support much easier and keeps access consistent through automated bots. 

Microservices

In software development, microservice architectures are a trend that developers have recently been utilizing in their work. Microservices are large-scale applications that are condensed into smaller autonomous blocks. This makes it simple for developers to work on areas of the system without disrupting the entire application. When it comes to interfaces and operations in FinTech, it is necessary to ensure users have access to the latest and greatest.

Here are some specific areas of coverage:

Agility within the application: You can add or remove as well as innovate any solution to keep up with changes in the market.

Highly reliable: When several components are operating autonomously within an application, it reduces the risk of system failure. When one component goes down, everything else continues running and the owner is notified that it needs to be fixed.

Transferable between systems: Once a microservice is developed, the components of the application it was developed for are reusable for various FinTech solutions. This is because a microservice architecture can connect to other systems through API. The API will act as the intermediary that allows the applications to communicate.

Increased development speed: A software developer would not have to start from scratch when building a microservice. Going back to transferability, there are unique aspects of microservices that may not be used much but can be added to developing solutions. Developers can create a minimum viable product (MVP) with these microservices and adjust the system based on how users react to it. 

Blockchain

The central spot for storing data for FinTech is in the Blockchain. This technology has risen to popularity in recent years for its ability to send secure transactions and utilize cryptocurrency instead of fiat money (money made legal tender by the government). The decentralized and encrypted structure of the Blockchain makes the management of transactions safe and highly efficient. When AI meets the Blockchain in an application, it allows the processing and supervision of data to operate easier and smoother in addition to avoiding potential mistakes. Companies have turned to this pairing for these specific reasons among others, and FinTech is no exception to the shift.

Here are some ways FinTech uses Blockchain to its advantage:

Easily pay peer-to-peer (P2P): This can be compared to Whatsapp’s encrypted messaging system that allows users to send messages around the world instantaneously. Blockchain processes payments similarly, eliminating the need for any middleman services in the process. 

Digital ID: To eliminate fraud in the Blockchain network, every user needs to validate their identity, like most other platforms. As soon as they’re registered in the system, tracking their activity is very simple and tracked regularly.

Cryptocurrency Exchange: Applications like Coinbase or Crypto.com use Blockchain to allow users to trade cryptocurrency assets.

Critical Components of a FinTech App

Every FinTech app is going to serve a different purpose. You can be a digital payment service, online banking, InsurTech, online lending, or even a crypto wallet or platform. Whichever service you’re fulfilling, you need to assess what aspects are critical for your application. To get you started, here are some sought-after features often used in FinTech apps:

• Visual data display: Breaking down information regarding income, expenses, and transactions.

• Flexible UI: Your application should be easy to navigate and understand, as well as have a way to engage users. For example, the crypto exchange application Coinbase uses a “learn and earn” feature where users are taught and quizzed on crypto assets in exchange for virtual currency.

• Gateway for payments: This basic feature allows users to make money transfers and payments. This is commonly the main selling point to get users to download a FinTech app.

• Virtual assistance: Users are increasingly interacting with virtual assistance (especially those that use a voice) for the unique experience it offers. Additionally, applications need a front-facing support system to help customers.

• Security: FinTech as an ecosystem is locked down and secure, yet one of the areas still in need of innovation is the security of FinTech apps. Additionally, studies have found that hackers attempt to break into computers connected to the internet every 39 seconds. 

So now that we’ve covered the details of what your FinTech app should consider in its development, what's left is how to do it. We’re going to break this down into a three-step process:

Step One: Study your market

Determine whether or not there is a need for your service. To do this, you’ll start by finding services similar to yours and evaluate how well they’re doing. What could you do better? Also, how are users interacting with these services? You want to determine if there are limits on the existing services and/or if your vision is something people need.

Step Two: Determine your project's logistics

Once you’ve analyzed the market you want to enter, you will have an understanding of who will use your application and what components you will need to generate appeal. This will then lead to evaluating the timeline and budget needed. Of course, both timeline and budget will vary depending on the technology stack you go with which will be determined after speaking with your software developers.

Step Three: Build your team

A FinTech application is highly complex and will require a team of experienced developers with the tools for the task. Typically, outsourcing this kind of development is a company's best bet when they don’t have an in-house team. Additionally, outsourcing would help save on your budget as you’re only paying for the results that the software development team produces. It’s ultimately going to come down to finding a team you’re comfortable with and that understands your vision and who can then make that vision reality. 

Finally

When putting together a FinTech application, the process is going to be subjective based on your business's goals. It’s going to be a bit of trial and error especially if you take it on in-house, but that will provide answers as you go. The great thing about developing a FinTech app is that there is so much variety in terms of how you offer your service and how you innovate it. With the right software, your application can scale and fulfill the needs of millions of users.

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.

InsurTech: A Breakthrough in the Insurance Industry

FinTech is known and talked about for its ability to serve global users' unique financial needs with unique financial offers. This technology has proven to be helpful and innovative for consumers structuring their future as well as their day-to-day financial well-being. Whenever a situation involves an investment, whether it be time or money, there is always a level of risk involved. To function in this world, people need insurance to protect them from the risk associated with their specific situation. Insurance can be a headache when you see the payments leaving your bank account, but it is understood that you’ll never know when it’ll be useful. Enter InsurTech, an industry that is meant to provide customized insurance needs using technology resources. Like FinTech, its appeal stems from tailoring to the specific needs of the individual. 

In today’s consumer market, brand loyalty is no longer relevant. People are less likely to simply go with what they know and more likely to be open-minded to options that will save time and money. It ultimately comes down to how easy a product or service is to understand, how much it costs, and how efficient it will be in their lives. InsurTech came around in 2010 and the same manner that FinTech disrupted the financial industry, InsurTech has come to disrupt the insurance industry. Both concepts use a central sales position that differentiates them from traditional methods of services. That is online accessibility which can be scaled for traffic and continuously customize offerings that attract an audience.

From a consumer's perspective, it is important to always be mindful of options especially when it comes to finances and insurance. Acknowledging that every new business scheme is an attempt to provide options that add value, how will InsurTech stand out?

Influencing Younger Generations: The financial and insurance industries are both trillion-dollar sectors and the concept that they are headed towards being fully digital is hidden in plain sight. Millennials and Gen Z like FinTech because it’s easier to understand and comes from companies they know. Its interaction can be seen every day among young users whether they’re using e-transfer or BNPL (just an example). How often do you hear 20-year-olds discussing their insurance providers? That was the light bulb for InsurTech companies who want to make the industry something you can interact with and continually find helpful. Since it is an inevitable investment to make, transitioning to online/streamlined access catches the eye. 

Consumer-Centric: Think about this, you don’t care about a service, you care about what that service will do for you. If a 16-year-old is getting their driver's license and they see their friends getting theirs first, they'll be eager to get on the road as fast as possible. Studies found that a consumer is more likely to take insurance advice from social media, looking online, or from a friend as opposed to a broker. 

This trend is similar to what we saw with FinTech in 2021 when almost 90% of consumers began using it. Additionally, it cannot be forgotten that well over 70% of millennials stated they would be open to those services from companies they know. Now, this is not suggesting that they are the sole market that digital service providers should cater to. Especially when you consider how narrow the gap is between older generations and millennials' technology use (6% difference).

Business Model

So now we understand that the market is there and technology-enabling components, as well as customization, are the deciphering factor for consumers. However, what is the legitimate business factors that suggest profitability for companies in the industry?

Direct Sales: InsurTech’s sales structure eliminates the high premium rates seen with traditional providers. This is because there is no intermediary when selling policies which means there is no commission to give. It is direct B2C which makes the type of customer that these companies cater to widespread. The service can include everything from individual plans to retail stores, E-Commerce, Amazon sellers, and much more. The common theme among insurance plans for these customers is pure risk insurance. 

For businesses working with online sales, there are endless risks that they’d need to be covered. For example, a wealth management company could be subject to cyber-attacks and therefore would need cyber security insurance to protect against the potential losses from an attack. An InsurTech company can then evaluate the company and its assets/liabilities to make a plan that will protect its specific needs in the case of a cyber-attack. 

Flexibility and Custom Service: InsurTech has thrived in Asia, particularly in the South Eastern regions where the service focuses on fulfilling everyday needs at low rates. For example, you can buy entire micro policies for $2 from a provider like PasarPolis. This variation of the model aims to cater to an individual user's specific needs. For example, imagine you’re waiting for a delayed flight and you receive money for it. Asia has embraced this solution to their maximum ability and even holds networking events like InsurTech Connect Asia (ITC).

Asia is the perfect place to look to evaluate the performance of industries like InsurTech considering that the most successful services on the continent serve simple everyday needs. This includes (but is not limited to) video call and messaging platforms as well as online shopping. 

To get a sense of the exact custom services there are let’s look at three features of automated car insurance:

1. Pay How You Drive (PHYD)

2. Pay As You Drive (PAYD)

3. Usage-Based Insurance (UBI)

The telematics technology behind these systems is used to track and store information on users driving habits which will then determine the rate they are reduced to. For example, Desjardins Insurance has an app called Ajusto that performs a PHYD function. Following the rules of the road will reduce your insurance accordingly. The ideal scheme for this technology is to take this concept and apply it to all other insurance-regulated areas to only pay for what you need.

How is InsurTech Utilizing IoT?

The emphasis of InsurTech is strictly based on usage. In today’s society, there is a vast amount of data trackers utilized daily. This includes technology like smartphones and smartwatches at the moment. Down the road, we could see micro devices implemented in vehicles or equipment that can influence the plans offered. Plans can then be monetized and managed through IoT which has already revolutionized the way we think about technology.

The Conversation Among Investors

The investments have been piling up year over year for InsurTech companies from private equity firms. In 2020-2021 there was a gain of 21% in the number of deals made. Additionally, the industry's capital passed $15.4 billion in that same period. Investors view the industry as though it is only at the tip of the iceberg. Companies that have resources surrounding programming interfaces, AI, and big data are where the checks are sent primarily. This is because when an investor meets with the business, they can screen for solutions that they can provide and push the firm into greater profitability. 

The Takeaway

Helen Keller has a quote that reads "Alone we can do so little; together we can do so much”. FinTech, InsurTech, AI, and IoT, all of these pillars contribute to an ecosystem that businesses will use to thrive and consumers will benefit from. This technology works in an interconnected process that connects with the user. That is what separates this technology from anything before, it is an emotional bond that influences decision-making and lends a helping hand. There is no limit to what can be done with this technology, especially with the right software solutions to support the product.

Written By Ben Brown

We work with successful companies to increase their net profits using exceptional custom software solutions, contact us here to see how we can help your business grow!

The Technology That Builds an E-Commerce Site

Over the last decade, organizations have been dealing with E-Commerce sites and virtual marketplaces. We’ve seen a wide-scale utilization of business tools driven by the internet such as dropshipping, affiliate marketing, social media influencing, and much more. Those who are successful have inspired others to take action and grow the industries as well as the requirements that virtual infrastructures need to keep up. For example, retail stores are adopting and dominating the E-Commerce sector which has invoked motivation for new entrepreneurs to initiate their approach. When an E-Commerce site becomes successful, it needs scalable technology to accommodate its customers. 

This is E-Commerce 101; both marketing and delivery of services don’t need to happen in the physical world. Every E-Commerce site aspires to have a place in the virtual Madison Avenue and Fifth Avenue. Everything you need to market, scale, and sell through sites is available online and it is only made possible through the technology behind the screen. Whether you’re looking to launch a website, app, web app, or anything of the sort, you should understand the program requirements to make you a serious contender in the E-Commerce sector.

This will ultimately start with drafting a “tech stack” which is a list of every piece of technology and its purpose that will go into launching and operating your single application. Firstly, you want to focus on the two components (or layers) necessary to base your stack around:

1. Front-end/Client-end: What will your client see and have access to whilst using your system? You'll need frameworks and development languages for the client side to create the appeal. This goes back to why UI/UX is crucial for development— you need your application to be engaging and keep users coming back.

2. Back-end/Server-end: What will allow your application to function? Various back-end languages exist (PHP, Ruby, Java, . Net, etc). The implementation of these languages will interconnect to ensure a smooth operation. For E-Commerce, this is how the program will be able to store and keep information secure in the database. 

Technology stacks are crucial for determining the components that will construct the final product and how well that product can perform. When it comes to building an E-Commerce site, some tools will serve you better than others. Ultimately, a well-done stack will show: 

• A summary of the programming languages, tools, and frameworks that the developer will require to interface the application. 

• The degree to which the system will be able to meet objectives for the business and assist with projects.

• A plan for scalability: What level of traffic do you anticipate? Will you run serverless? You’ll want to have an understanding of the application's anticipated workload.

• Will data be stored in the cloud? Or can it be stored locally?

• Is the app on an enterprise level? Or is the solution more lightweight?

• How will the application perform on the devices it’s intended for?

• How clearly defined is the end goal? Developers will need this to deliver an adequate result.

Now that we’ve identified the areas to consider for a tech stack, let's move on to the best frameworks and programming languages that developers can use for your E-Commerce site:

Front-end: These are the development tools that will build what the user can see and interact with when they enter your site.

• JavaScript: The most commonly used programming language for the front end due to its ability to generate interactivity for static HTML pages. Additionally, it is flexible when integrated with other languages and frameworks. 

• React.js: This is the most used framework when creating the interactive elements of a site. E-Commerce sites such as Tesla, Airbnb, Netflix, Uber, and The New York Times were all built with React.js. Many factors contribute to this wide-scale usage but the main draws include the ease of adoption, versatility, and speed of software development.

• Node.js: An open-source (code is easily accessed and can be modified) environment that is compatible with other platforms to build front-end and back-end solutions based on the JavaScript engine. The specific engine it runs on is chrome v8 which will convert code from JavaScript into machine code. Essentially, the reasons behind its use come down to Node.js being lightweight, highly scalable, and data-intensive.

Angular: This front-end framework is made for building mobile, web, or desktop applications. Being open-source and TypeScript-based makes it cost-effective and transparent when expressing the components of the application. Additionally, google houses a majority of the development team which increases its credibility.

Back-end: These are the tools that developers will use for the architecture, In E-Commerce, this consists of: managing orders, organizing products, web page edits, payments, registration, SEO, and more. To perform these responsibilities, look at:

• C#: This programming language is general-purpose and is used to build many kinds of applications and programs such as native apps, websites, cloud-based services, games, and much more. 

• PHP: This is a back-end language mainly used for website applications due to its role as an open-source as well as a general-purpose scripting language. This means that the language is highly adaptable in terms of compatibility and scalability. Additionally, as an open-source is it free which would make development costs manageable. 

• Java: A general-purpose, class-based, object-oriented language meant to build highly advanced software for a range of systems and devices. Like JavaScript, it can run on almost any platform. 

There are a variety of frameworks with Java that ensure the efficiency of implementation and operation. One of the most commonly used is Spring which further streamlines the Java programming process. It is another open-source framework that will assist developers when building Java applications. It will however require a level of expertise as Spring is a complex system to navigate. The difference is of course that Java is a programming language and not a programming script.

What’s Best For You?

There are many more front and back-end languages and frameworks that make up technology stacks. If you’ve gone the route of developing your E-Commerce site without the help of an outside consultant, it’ll be wise to start with a pre-existing stack. Here are three that are the most commonly used:

1. Python and Django: Highly ranked option for E-Commerce startups as it is highly scalable which will be beneficial as the traffic of your site grows. In terms of back-end functioning, this is going to be a secure environment that is ready to handle the volume. Lastly, the web server that developers typically go to when using this stack is Apache and for management of the database, there is PostgreSQL or MySQL.

2. MEAN (Mongo DB, Express, Angular, and Node.js): This blend of systems is frequently used for constructing online stores. However, for bigger-scale applications, it won’t be your best option.

3. LAMP (Linux, Apache, MySQL, PHP): This stack is great for websites and web apps as well as simply getting your project off the ground quickly. 

After you’ve chosen a stack, there are a few more steps you’ll need to take to reach an optimal outcome:

Identify Requirements: Every project has its specifications in terms of what it needs and the resources available. For example, your store may need to be accessed on a mobile app or have an automated supply chain invoice system.

Time to Market (TTM): How long until your concept is reality? Commerce is a highly competitive industry, as a startup, you want to build this credibility with your customers as soon as possible. Don’t stall the development process over hesitation instead define your ideal and get logistics in place. For example, if you think the Python and Django stack is your best option then identify the number of developers you’ll need to get started.

Scalability: This is a pillar of E-Commerce and whether you’re a startup or starting a new initiative, you’ll want to envision how it will continue to build. This is going to influence the choice of the technology stack as you’re thinking long-term. 

The Team Behind You: In the end, the developers working to build your system are going to dictate the quality of the outcome. Since this factor holds so much power, it has led to nearly 60% of companies outsourcing software development.

Finally

Technology stacks are your organization's key to freedom and a shield from headaches. Project development is very complex and can become volatile when faced with a lack of organization. Define your ideals in terms of languages, programming, and frameworks that will give your developers a running start in the success of your project. 

Every obstacle has a way through and when it comes to technology this is something you realize over time. An outsourced team of experienced IT technicians can save you a lot of time and money in comparison to taking on a project with an in-house team. 

Written By Ben Brown

We work with successful companies to increase their net profits using exceptional custom software solutions, contact us here to see how we can help your business grow!