Things to Consider Before Creating an App for Your Fintech Startup

Over the past decade, we have all seen how promising and resilient FinTech is in the impact it has built around the delivery of financial services. The sector has revolutionized the financial services industry by simplifying transactions, enabling innovation, empowering users, reducing costs, and enhancing security. Taking the cue, traditional banking and financial institutions have also started adopting the latest trends and embracing the technology by looking into more ways of building a FinTech app.

On a global scale, FinTech startups in London have moved from periphery to mainstream with aggressive growth driven by high adoption rates, such as 71% compared to the global average of 64%, with incumbents joining the bandwagon to invest and grow. The UK comes second as the largest destination for FinTech investment after the US, with over 2,500 FinTech companies in London, with the numbers expected to increase over the next decade.

The above stats show how promising FinTech can be. However, beyond the opportunities and profitability, building a FinTech App can be challenging with startups facing government regulations, development challenges, competition, etc. Therefore, before going further with the FinTech project, the following are some things startups must know and consider.

Things to Consider Before Creating an App for Your Fintech

What is the Ideal FinTech Niche?

The first step to building a FinTech app is to decide on the niche. You can choose from many options as you are new to the scene. To give you an idea, let us explore a few options below.

  • Payments 

These platforms enable users to transfer and receive money online or make contactless transactions easily. 

  • Personal Finance

With the emergence of automation, AI, and Open Banking, helping users manage their finances is one of the best niches to get into presently.

  • Trading

Trading is no longer limited to financial institutions and wealthy investors, as it used to be. Instead, trading apps like Freetrade, eToro, and Degiro have democratized trading, allowing anyone to trade from anywhere easily.

  • Insurance

One of the sectors that underwent a sea change with AI and automation that helps users find the best policy at the right price. 

  • SME-Focussed Services 

Small businesses and entrepreneurs can access financial services and use solutions such as accounting, lending, payments, etc., using FinTech. 

The above are just a few ideas for starters. Undoubtedly, many underserved sectors are emerging, which only points to the fact that new trends may continue to surface in the FinTech space.

Why is it essential to Niche down?

At first glance, offering a mix of all services is a good approach. However, many large corporations and banks offer a wide range of services without providing them with the necessary attention and care.
Putting your effort and money into a specific niche increases your app’s quality and makes it stand out, especially in a competitive market like London’s.

6 Steps to Consider Before Embarking on FinTech App Development

Now that you have chosen a niche, the following are some essential steps you can take before embarking on FinTech App Development.

  • Architecture of the App

Build the architecture of your app, which is flexible enough for further expansions while keeping it as simple as you can.

  • User Experience

Design an app that provides an easy way to solve existing business problems. Ensure your FinTech app provides a novel, valuable, satisfying user experience.

  • Security

Whichever stage your project is at, security must be given top priority especially when FinTech apps operate in the presence of sensitive information. Therefore, a well-made FinTech app must have 24/7 security monitoring, follow encryption standards, and have anti-fraud automation and activity logging.  

  • Technology and Maintenance

Choosing the right tech stack is critical. As the amount of data grows, it’s essential to refactor the infrastructure to cope with the demand, while ensuring that all the factors are thoroughly tested via manual and automated approaches. All of these factors must be considered when developing and maintaining an application to ensure optimal performance, extend the app’s life cycle, and meet expectations.

  • Third-Party Components

By leveraging various external frameworks and components such as biometrics, robotic process automation, real-time analytics, payment gateways, and others, it is possible to expedite the development of a high-quality FinTech app. These components have already been optimized to seamlessly integrate into the app’s infrastructure and can be tailored to meet the application’s specific requirements. However, ensuring that the app remains lightweight, performs efficiently, and doesn’t consume excessive resources is essential.

  • Security and Compliance

Ensuring fraud prevention is of utmost importance for any FinTech app, and it is crucial to have proper security measures in place. A compliance strategy that includes appropriate audits, security checks, and certification is also critical. To comply with regulations, hiring a legal consultant in London who can monitor changing federal and state laws and provide advice can be a good starting point.

How Long Does it Take to Build a FinTech App, and What are the Costs?

The timeline to build a FinTech App in the UK looks something like this – it takes approximately two to four months to build a basic app, a medium complexity app may take four to six months, and a complex app can take six to nine months. The timeline also depends on factors like app complexity, requirement, and the type of app you choose. 

The average cost, on the other hand, for creating a FinTech app in the UK starts at £40,000 and might reach up to £500,000 per features and complexity level. The hourly rate for developers in the UK ranges from £40 to £150 for a FinTech App.

The Future Looks Promising for FinTech Startups in the UK

With rapid growth and innovation, FinTech has a tremendous future thanks to the country’s supportive regulatory environment, highly skilled workforce, and access to capital. In recent years, the UK has become a global hub for FinTech innovation, with a thriving ecosystem of startups, investors, and regulators. 

With the UK government’s commitment to supporting the sector through initiatives such as the Fintech Strategic Review and the FinTech Growth Programme, the future looks bright for FinTech startups in the UK. If you are in the geographical area or targeting it as a prospective user hub, now would be the time for you to enter the innovative space. All you would need to do is a partner with the right team who understands Fintech and the UK market.

Check The Complete List of Fintech Unicorns in the UK in 2023 if you are interested in Fintech Startups…