A complete guide to financial software development for your FinTech business

Sudeep Srivastava January 11, 2023

FinTech is everywhere. When you scan a QR code in a grocery store, you use a FinTech solution. Calculating EMI on a car you are planning to buy on a digital platform? FinTech. Sending money to someone through digital IMPS? FinTech.

While the simple definition of FinTech lies in the explanation that it is a model that merges financial working with technology, in reality it goes much deeper than this. FinTech or financial software development is about creating an ecosystem where it would be possible to make transactions related to finances timely, convenient, and customer-focused.

The FinTech architecture comes packed with elements that are designed to solve the many age-old problems associated with the sector, giving them a digital-first solution. The offerings that the sector promises and the promising adoption it is seeing, has brought in a sharp increase in the number of businesses entering the space. Chances are that if you are here reading this guide, you are one of those businesses. Well, you are in the right spot.

We have curated this guide to help you get up to speed with what is needed to enter the space and ace it with your model.

The growing FinTech market and why it is time to invest in the sector

The global finance market is expected to reach a valuation of around $234 billion by the time we hit 2026. A major portion of this market size is driven by the move towards digital. Users have moved towards digital – apps, mobile versions of banking solutions, etc. to perform activities they once used to do by standing in long bank queues.

Geographically, the biggest reach of the FinTech sector has been seen in areas like Europe, North and South America, Asia Pacific, and Africa, Middle East. What is interesting to note here is that out of these regions, Asia Pacific has emerged as the location exhibiting highest growth in the sector. On the back of factors like expanding customer base, high population of millenials and Gen Z and the openness to accept new technologies, the locality has been favorable to a number of FinTech startups ecosystem and an equal rise in the number of financial technology companies.

[Also read- How Fintech startups can prevent their businesses from failing]

The global adoption that the sector is facing is a sign of its unprecedented rise as a sector – one that is also presenting the reasons for an entrepreneur to enter the space in the current date and time.

Why is investing in financial software development still lucrative?

There are a number of reasons that make custom financial software development investment a good business move for entrepreneurs. Let us list them down.

1. Cash is turning digital

Take a minute out and look back at your last five transactions. Did you ever use cash in them? If you belong to the Gen Z and millennial segments, chances are you must have moved from cash transactions to digital without even noticing.

For a FinTech company, this transformation holds the key to not just the sector’s growth but also their financial projection.

2. The massive app space

Mobile apps – both coming from new age FinTech businesses and banks – have played a huge role in the adoption of the FinTech model and the subsequent rise in businesses entering the space through apps. Today, mobile has become the new wallet – one where users store their money and use it for a plethora of transactions. It has also become a ledger which contains a history of transactions and a way to keep updated on the expenses to come.

3. Bank visits are becoming limited

Customers have started turning towards new-bank and FinTech options, ditching the traditional banking systems. They have even started relying on new age financial service providers for support that was once limited to banks and NBFCs. Support like credit, stock investments, etc.

In such a scenario, FinTech firms have gotten the opportunity to introduce new marketplaces for customers who are fed up with the old ways of doing financial services. All they have to do is invest in custom financial software development.

4. Greater scope of innovation

FinTech, as a sector, while witnessing new businesses coming up answering age-old issues, is still ripe for innovation. Just when you think you have an app or a software for every outdated banking process, a new use case emerges. After all, who would have thought that there will come a time when virtual currencies will become more lucrative than fiat money? When it comes to FinTech, sky is the limit in terms of new model development.

The different FinTech business ideas

A key part of becoming a leader in the FinTech space lies in understanding the model with which you would like to announce your entrance. At present, there are fifties of different FinTech models which you can explore for starting your business and it won’t be a surprise if several more come up by the time we reach the end of this year.

On the high level however, the FinTech ecosystem is made up of these array of sub-sectors –

1. Banking

FinTech fills the gap of efficiency, flexibility, and accessibility that banking institutions come with. With a number of customer-focused tools like app-based money transfer, neo-banking debit and credit card, micro credits, etc. under its armor, FinTech has a lot to offer on the banking use cases front.

Running on the power of APIs, FinTech companies are closing the gap between traditional banks and new age technical firms by making it easier for the customers to get the data and information they require in real-time.

2. Investment

Investments have always been a key player in the financial world. But what is fairly new is that a trend is emerging where Gen Z and millennials have started investing, focusing on making a wide portfolio consisting of equity, debt, gold, and virtual currencies.

This need to get financially independent is taking them towards several investing-based FinTech applications like Coinbase, Robinhood, etc., which in turn, is becoming a lucrative model to enter.

Appinventiv view: There are a number of ways to add an extra feature in an investment application. It can be introducing an in-app wallet, AI-based automatic allocation of funds among different stock options, and even an in-app segregation of purpose or goals from an investment.

3. Insurtech

Insurance firms have long been characterized as money-making entities which are not for all classes of people. Now, emerging FinTech firms have started providing customers with low premiums, longer repayment time, faster disbursement of funds, and automated claim processing. They are basically the recipe for making insurance accessible to a wider pool of people coming in from different economic backgrounds.

What is new in this sector is that several FinTech firms are emerging that are extending their services to new insurance categories like – pet insurance, insurance for blue-collar workers, car insurance, sachet insurance, etc.

4. Payments

When it comes to FinTech models, payment continues to be the sector’s favorite. There are a number of firms finding new use cases for making the process of making payments, generating invoices, tracking upcoming payments, etc. easier. There are even businesses looking at everyday struggles, like splitting cash with friends, sending money internationally, etc. The one thing which can be said about this FinTech sub-sector is that it continues to be open for innovation.

5. Lending

Just like insurance, the credit world has also witnessed a massive transformation with the coming of financial software development services and solutions. There are firms that are offering easy credit facilities with zero paperwork and then there are also those which are using the analysis and detection abilities of artificial intelligence to gauge borrowers’ ability to pay back, approve, and release the loans – all within 24 hours!

Another model that has recently come into focus in the FinTech sector is the peer-to-peer model. Here, the platform users are able to get loan support from others in the platform or from the company behind the platform. Some examples of these can be seen in names like Zopa, Lendable, etc.

6. Virtual currency-driven platforms

Cryptocurrency is tomorrow’s fiat currency. This is the general consensus people share whenever cryptocurrency is mentioned. In the present day, half of the people are either investing in it, using it for transactions while the other half is learning it enough to explore the domain themselves.

For a business, virtual currency comes with a range of models – cryptocurrency development, crypto exchange, metaverse focused cryptocurrency, etc.

As you must have guessed, these six are only the surface level sub-sectors that you can explore. There can be several others and even within those multiple sub-sectors there could be hundreds of different FinTech business models. What you need to do is find out your area of interest.

Must-have features for financial software systems

Before you immerse yourself in this section, we have a disclaimer to share. The features that would ultimately become a part of your FinTech application will depend on the model you picked in the last section. For example, a crypto exchange platform will come with features like live market movement while a payment app will have the facility of a QR code. Between one model to another, the list of features can vary immensely.

So what we are going to do here is list down the top features that generally make it to the list of every FinTech app. Here it goes.

1. Secure authentication

Authorization is a crucial aspect of any FinTech app. It is the primary way of securing your application through multi-factor authentications like email, phone number verification, OTP-based registration, biometric authentications, etc. In short, this is the stage where you show your users how tightly knit their experience is going to be, especially when we take security into consideration.

2. Model-specific functions

This set of features will be core to your offering. For example, if you are making a personal finance management app, it will have features like multiple account links, dashboard with expense and income summary, AI-based highlights on what can be avoided to lower the expense, tab on regular payments, etc. Similarly, a stock trading app’s feature list will be something else.

3. Payments

Typically, payment is a common factor in every FinTech software. Whether you look into a B2B vendor management software or something as common as a lending application, every FinTech user would want the feasibility to make secure, real-time payments to others.

Now, how you provide that facility depends on the model. You can opt for the addition of a QR code or bank to bank transfer, payment from in-app wallet, etc. the list of adding this functionality is long.

4. Dashboard

Every data-driven app – healthcare, fitness or in our case FinTech, needs a tracking and management system in place. This is where a dashboard comes in handy. An in-app dashboard helps with bringing all the income and expense data, market updates, upcoming transactions, etc. in one place, in a format which is easy to digest. Now, a dashboard feature generally comes tagged with the ability to generate and download reports, which helps users get a more detailed view on their finances.

5. Notification

Customized notifications are the most constant line of communication between a FinTech business and their customers. These are sent to update the users on credit or debit, change in investment rates, new offers, update in loan application status, and a number of other reasons.

What is important here is that you plan out a strategy to send the notification in a way that they don’t seem intrusive or untimely.

6. Integrations

For a FinTech app to be helpful to the users, it has to be integrated with third-party software, in this case generally that third-party software is of bank’s, security software, notification system, and the payment software.

When properly integrated with the right APIs, your users would be able to checkout, find the nearest bank location, track the money they have across different accounts, etc.

[Also Read: How to build a loan management system?]

A technology trio that can make your financial software and systems successful

Technological innovation is the linchpin of finance software development – one which would continue to create new business models for the sector. According to Appinventiv analysis, there are three technologies which are driving the FinTech world – technologies which you should add in your software.

Artificial Intelligence

Any industry that plans on adopting artificial intelligence knows that the technology works only when there is a plethora of data available. And when we talk about data-heavy sectors, what can top finance?

AI carries one or several use cases across the complete spectrum of financial domain – front and back office. For the customers, the technology can be used for creating tailored products, automating transactions, robo-advisors, KYC, chat interface, and a lot more. Likewise, for the back offices, it can help with creating smart processes like faster claim processing, fraud detection, assessing customer’s lending capability, etc.

The use cases of AI in FinTech are wide reaching. Our team recently worked on a far-reaching solution for a bank using AI capabilities. Our client – a bank based out of Europe – was losing out on almost 6% of its home loan portfolio every year because of high customer churn rate. Now, even though the bank knew how many customers it was losing, it did not know the reason behind the event.

To solve the issue to an extent, our team worked on a mukti-language AI-based chatbot assistant that was deployed on the bank’s website and mobile apps that handles complex activities like solving customer complaints in real-time and reporting issues.

To lower the churn rate on the bank’s home loan, we built an AI product which ranks the customers in a range of 1 to 10, with 10 being high probability of customers’ staying and 1 being the low chances. The product offers the reasoning behind customer ratings, enabling the bank representatives to make changes at appropriate times, in addition to having personalized conversations with the customers.


The technology is ushering FinTech to a new golden era. With use cases like Distributed Ledger Technology, Crypto Exchange, NFTs, Decentralized Finance, KYC, blockchain is making the financial sector immutable and fast.

The use cases of blockchain in FinTech are typically built to address every persistent issue of the financial sector – the reliance on centralized systems, zero trustability, high operational costs, and slow process. What the technology is doing to address these is –

  • Enabling faster transactions through consensus algorithms
  • Crypto lending
  • Using its immutability factor to ensure regulatory compliance
  • Creating digital identity
  • Building new funding models.

It was a core banking solution that offered functionalities such as wire transactions with crypto, buying and selling of cryptocurrencies, wallet recharge, and making payments using Bitcoin and Ethereum. The project validated how we have only scratched the surface of the technology’s integration in software and there’s a lot more to explore.

Cloud computing

Cloud computing in banking and FinTech has been a talking matter for a long time now. While on one hand, cloud is liberating FinTech companies from non-core activities such as managing data centers, IT infrastructure, etc., on the other hand, it is creating new business models like banking-as-a-service, open banking, etc.

Through its different operative and business end use cases, cloud is offering a range of benefits to the sector. Benefits around – better security, low infrastructure cost, real-time access to software, enabling usage based payment, etc.

Between these benefits and the many others on the ground level, it is safe to assume that the financial institutions will continue to work on cloud-powered financial services software development. This will not just help them launch new businesses, better their market and customer response time, and work on scalability.

The stages of fintech app development

While it is true that every fintech software is different, the process that goes behind its development more or less remains the same. Here’s what those stages are at Appinventiv.

Requirement gathering

Our team of business analysts sit with you to understand your requirements and objectives.

We call this process software development consulting where we brainstorm on the features, walkthrough, technologies whose inclusion will be useful, etc. Once we gather that information, we go on to create a project scope, highlighting the milestones and timelines of the entire project.

We brainstorm on the features, walkthrough, technologies whose inclusion will be useful, etc. Once we gather that information, we go on to create a project scope, highlighting the milestones and timelines of the entire project.

Software design

The next stage for us is the creation of innovative UI/UX design. The intent of our fintech app designers is to ensure that the product is easy to walk through and learn. We make sure that your users take minimal time in making your application their favorite.

MVP development

Once there is a go-ahead from your end on the app design we go on to code the features, add technologies, and integrate best security methods in the application. The intent here is to provide you with a software which is the best representation of the app’s USP. One which you can test the waters with.

App launch

With the MVP now ready, we push your application on the platform it is built for and run an adoption test on it. Once we ensure that the market is ready for your product, the constant feature update starts. We, at this stage, build features upon the MVP.

App maintenance

The last but crucial stage of the Fintech app development process is maintenance of the application. Our team ensures that your app remains hack-proof and glitch free on the platform it is active on. A key part of this activity is keeping track of the app ratings and reviews.

What’s the cost of developing financial software systems?

The cost of building a FinTech application can be anywhere from $30,000 to $500,000. But, the truth is there is no definitive answer to the price of software development for financial services. It would depend on a range of factors like – type of the app, type of the team working on it, and the location of the financial technology company (if you choose to partner with one).

Let’s look at all three one by one.

Typically, in our experience, the type of application and their subsequent pricing looks something like this –

Type of Application Cost of the Application Reference Application
Banking app $165,000 – $180,000 Revolut
Investment app $55,000 – $65,000 Acorns
Consumer finance $70,000 – $90,000 Finch
Insurance app $100,000 – $120,000 Coalition
Lending app $80,000 – $100,000 ZestFinance

The next cost impacting factor lies in understanding who will be working on the project. As a startup owner, you have multiple options to choose from – in-house development, hiring a freelancer, or partnering with an outsource agency.

Now, if we account for a simple FinTech app with basic set of features that would take 1,000 hours to develop, the cost table would look something like this –

Team Type Development Cost
In-house $80,000
Freelancers $30,000
Multi-skilled agency $50,000

The next and last factor that would determine the FinTech app development cost would be the location where the agency is based out of. Usually, there is a stark difference in the price quote as you move from the USA or UK to India.

For example, an average developer in the USA would charge anywhere between $100-$120 per hour on a project, while an Indian developer will charge $60-$80 per hour for the same quality and delivery promise.

FinTech regulations that businesses have to comply with

Irrespective of how expansive or expensive FinTech regulations get, they are necessary for the success of a FinTech application. In addition to helping you avoid hefty fines, compliance adherence helps with building trust with users as they interact with your software.

Let’s have a look at those compliances that you need to address.


It is one of the most commonly followed data protection regulations in the EU. It dictates how businesses gather, process, and store data of the EU users. The fine for not complying with the GDPR rule can go as high as €20 million. There are similar regulations like Consumer Data Right (CDR) and California Consumer Privacy Act (CCPA) that work in the lines of GDPR and should be followed by every FinTech brand.

2. KYC

Know Your Customer is a regulatory requirement that every financial firm should adhere to. On the ground level, every financial service provider and banks oblige with it, meaning your business would also need to. The objective of KYC is verification of the identity and risk profile of a user, ensuring that there are minimum instances of money laundering and frauds.

3. FTC

In the US alone, there are multiple compliances which you will have to follow. However, one that you’re most likely to come across is the Federal Trade Commission. For the FinTech domain, there are two of its most relevant regulations – Gramm-Leach-Bliley Act (GLBA) and the Fair Credit Reporting Act (FCRA).

The GLBA is a regulation that calls for financial software development services institutions to protect customer data and be transparent on how it gets processed. While, on the other hand, the Fair Credit Reporting Act (FCRA) covers consumer credit information. This will apply to you if the FinTech app deals with lending or works around the processing of a user’s credit scores.

4. PCI DSS compliance

It is a regulation which governs credit card payments. It ensures that the transactions are processed securely. The standard highlights six areas that businesses need when preparing their app to meet the PCI DSS compliance. The fees for non-compliance can be anywhere between $5,000 to $100,000 to be paid every month.


The Electronic Fund Transfer Act is governed by the Consumer Financial Protection Bureau which looks after the electronic money transfers via ATMs, POS terminals, and debit cards. The objective of this compliance is to protect users in case of transaction errors like funds getting transferred to the wrong account.

FinTech software development challenges to prepare for

A crucial part of establishing a FinTech business empire is to foresee the challenges that it can face and prepare for them. It is how you make your FinTech application future-ready.

Let’s look into what those challenges can be.

Finding a gap

Best product ideas are those which address a problem that masses are facing. When it comes to FinTech, it can get overwhelming to identify which sub-sector to bring under the microscope. At Appinventiv, we advise our clients to look into the most revenue-friendly segments of an industry and enter that. In this case, it would be either digital payment or second most profitable – personal finance.

Once you have finalized the sector, the second step would be to do market research and identify the blind spots that you can explore as a prospective business idea.

Planning out the app features

It is one thing to know the problems you want to solve; knowing how to solve it is an altogether different ballgame. Every entrepreneur has a rough idea on what they want their app to look like in reference to other apps, but knowing the MVP features – the one which they test the market with, is a decision that would need an expert’s help. Typically, an approach that we follow when deciding the MVP features is listing down the market problem areas and the solutions we are proposing for that. From there, we do reverse engineering on preparing the features list.

App security

There are ‘N’ number of vulnerabilities that can occur in an application. For a sector that deals directly with money and sensitive data, making the app hack-proof becomes critical. The only solution to this lies in working with a team that follows a security-first development approach, they will not just follow the best practice during development but will also make you a data governance framework to follow as an in-house standard measure.

Following compliances

There are hundreds of compliances across the world. Finding the ones that you need to address is crucial. Additionally, you would need to make your app working, features to meet the compliance regulations to the T – something that can be challenging for uninformed entrepreneurs and developers.

Leveraging next-gen technologies

Adding tech names like Blockchain, IoT, and AI, etc. is exciting for any future-forward FinTech business. But the actual incorporation of these technologies is what becomes challenging. After all, you cannot call yourself an AI-powered FinTech firm because you have an AI chatbot. True integration of technologies in any software requires subject matter expertise that only a few in-house developers carry.

Top FinTech trends to look out for

For the world that is thinking that FinTech innovations have hit the bubble, they are in for a ride. Several new trends are emerging in the space with the single focus of making the sector accessible, convenient at the back of innovation. Here is a peek into some of those FinTech trends.

Embedded finance

The FinTech model is what enables companies to offer their consumers credit without them leaving the platform. For example, when you have to buy a high-cost item like a refrigerator on Amazon, it gives the option to buy it on credit with x months EMIs plan. That is what embedded finance stands for.

A key feature of this trend has been the Buy Now Pay Later (BNPL) model. While it leads to a low credit score in some instances, the financial impacts created by the pandemic has given it a push. So much so that it is poised to become its own market with an accumulated $680 billion in transactions in 2025.

2022-23 can be the year of blockchain

FinTech firms are drawn to blockchain’s impossible to hack or breach security systems. What it does for identity management, maintaining financial records, and tracking transaction history has not gotten unnoticed by banks and FinTech firms.

Another key element of blockchain, digital assets is believed to be a strong alternative to fiat currencies in the coming 5 to 10 years – a sign that blockchain has proved itself to be more than an invention of a madman.

FinTech might get its own super apps

Remember GO – JEK? The app brought an umbrella of services ranging from on-demand rides, medicine delivery, messaging, digital payment, buying events tickets, etc. in one place. If the model sounds similar, chances are you might be thinking of PayPal, which offers a similar set of apps under its one app.

We are entering the time where a finance super app might also come into existence. It can be expected to offer a seamless access to multiple financial software & systems and tools like managing insurance, paying bills, keeping track of invoices, record keeping, etc. for consumers, it would offer a much-necessary convenience and ease of doing financial transactions.

Open banking

Open banking enables the banks to commercialize the infrastructure by moving it into the BaaS model and offering core services to FinTechs firms. The trend eliminates the pressure of banks  being replaced or forced into competition from FinTech firms by bringing them closer to becoming their partners.

How to hire a finance software development company?

The success of you as an entrepreneur depends heavily on the financial software development company you partner with. The quality of the app and the scale of market readiness it is engineered on will be directly proportionate to the experience of the FinTech development partners.

Here are a few things you can keep into consideration when hiring a FinTech software development company

1. Expertise – The first thing that you should check when hiring a financial software development agency is the expertise they carry in the model you want to enter in. The more aligned they are with your business model, the more they would know the limitations and strengths of entering the space digitally. A validation of this can be gathered from their past works’ reviews, case studies, and testimonials.

2. Understanding of compliances – In a data-heavy sector like FinTech, it is critical that financial software developers should know the compliances followed by geographical locations it would be made live in, inside out. They should know how to build features, run integrations, and design specific to the compliance requirements.

3. Price quote and delivery timeline – In the search, there will come a time when choosing the software development company would come down to the price they are quoting and the delivery timeline. Now, while it might seem lucrative to go with the agency that is quoting the least price and the fastest delivery timeline, tread cautiously and go with a firm that promises quality.

4. Vibe check – While often ignored, vibes tend to play a huge role in the choice of partnership. Imagine getting on a call with a prospective agency only to find that their executives are acting know-it-all and not letting you share your vision, or simply they don’t share the passion you have or believe in your idea. Now imagine talking to an agency that is as excited about your idea as you are. Did the thought make you feel content? This is why it’s necessary for the vibes to match.

How can Appinventiv help with your FinTech project?

Appinventiv comes with the history of building 12+ FinTech software with a combined user base of 5+ million users.

We have helped a range of businesses with their multitude of use cases ranging from different models to advanced feature sets and next-gen technology combinations. This mult-range experience that we carry, make it easy for our financial software developers to face every challenge and still ensure a successful app delivery.

What makes us truly valuable in a software partnership is the fact that we step into your users’ shoes and build the app in a way that ensures it aligns with their individual requirements and expectations. All the while, we keep making your brand an industry leader one of our topmost priorities.

FAQ about financial software development

Q. What are some of the best FinTech app ideas?

A. The trends for finance app ideas keep on changing. But the way the sector is moving today, we can say that payment and personal finances software are here to stay as good models to start your journey in. However, we do recommend doing a thorough market research to get an understanding of what the users need and then pin down an idea.

Q. How is the FinTech industry regulated?

A. Governmental entities, across countries and regions control the compliances followed in the financial technology sector. It also often depends on the area, service type, scale, and revenue business. Some of the most followed compliances of the sector are – GDPR, PCI DSS, and FTC, etc.

Q. How to choose a FinTech software development company?

A. When looking for a FinTech development partner, you should consider these factors –

  • Company’s experience in the financial domain
  • Past work on the software products
  • The kind of technology they work with
  • Price quote
Sudeep Srivastava
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