Types of Financial Applications Software and Common Development Challenges

Thinking about launching a financial startup? Well, now is a good time to implement your idea. But, financial application software development is not a simple job. Running this type of startup requires following specific steps and avoiding the pitfalls along the way. Read on to learn more about the main fintech app types, challenges to financial application development, what your future competitors offer to their users, and how you can overtake them.

What Are the Types of Financial Applications?

The financial industry has already merged technology and innovation to solve corporate needs and provide customers with an engaging experience even when dealing with difficult money management tasks. There are a lot of financial application software types, each of which is aimed at achieving a specific goal for the financial corporation or its users.

Here are the main ones:

• Payment gateways are used by eCommerce websites to allow users to seamlessly pay for their goods with their debit or credit cards using MasterPass or LiqPay gateways, or PayPal.
• Budgeting apps are familiar financial technologies that are usually directly connected to a person’s bank account. In this case, budgeting apps work according to the open banking approach where a bank shares users’ transactions with an app and the user gets statistical insights on their spending.
• Financial forecasting apps are high-end technologies mostly used by banks and other financial companies. Powered by artificial intelligence, they make it possible to accurately evaluate the risks of making an investment or issuing a loan.
• Bookkeeping software is used by all enterprises without exception, allowing bookkeepers and company owners to keep track of their expenses and profits in one place.
• Online banking apps are popular solutions created by banks to enrich their customers’ experience and free up the bank’s support team. As a rule, these apps allow users to track their spending, apply for a loan, create an account, and make payments. Advanced online banking apps are often powered by artificial intelligence (AI) and machine learning (ML).
• Tax management software are solutions that help users fill in their tax forms using pre-developed templates, and more innovative ones powered by AI are able to track expenses and profits, and they can suggest the right amount of taxes the users should pay during a reporting period.
• Peer-to-peer (P2P) lending and investment software. There are also P2P applications that people can use to invest their money or borrow a certain sum on better terms than traditional banks may offer. P2P lending and investing is a promising industry. The amount of loans issued is predicted to reach $1 trillion by 2025.

Best Financial Software Applications

Here are the most popular and well-known financial applications aimed at solving money management and investment tasks. If you are considering building your own money management app, you need to take a close look at your top competitors.

• Quicken. This is an all-in-one budgeting and bookkeeping solution. With its help, users can track their budget, plan spending, stay updated on debt, and get investment advice.
• Mint. This is one of the most popular personal budgeting apps in the world. It allows users to easily track their income and expenses and manage their money wisely by receiving notifications of payment deadlines and overspending.
• You Need a Budget (YNAB). If you have no budget planning skills, this app will help you develop them. The app extracts information from the user’s bank account, analyzes spending patterns, and suggests some financial management rules the user should follow.
• Mvelopes. This is a personal budgeting app that suggests using digital “envelopes” to plan how much money you can spend on your needs by category each month.
• TurboTax. This app makes the process of filing tax forms seamless and intuitive. What’s more, the users can ask for consulting services and find out what additional opportunities are available for minimizing their tax liability.
• FutureAdvisor. This AI-powered app suggests the best investment strategies, and it can be a great support system and counselor for novice investors.
• Prosper. This is one of the leading apps in the p2p lending market in the US. With its help, anyone is able to invest or borrow money with low risk, high returns, and simple procedures.

Financial Application Development Challenges

What are the challenges to fintech application development? Every startup faces unique and hidden pitfalls. Here are some of the most common ones.

Deciding on a Niche

There are a lot of financial app types and niches. What’s more, sometimes a financial app can have a lot of functions like budget tracking and investment suggesting capabilities. That is why it can be difficult to determine your niche and meet the expectations of target users.

Providing Security

Security is the top challenge financial app development companies face. There is an equal need to protect both the data and the money of users. To date, blockchain and AI-powered anti-fraud systems are the top ways to secure financial applications. However, using these technologies can make the development process more expensive.

Legal Compliance

Legal compliance is another issue for mobile app development in financial services. You need to be up-to-date on the legal norms regulating finances in all the markets you plan to serve. There are a lot of subtleties in the financial laws of each state governing the legal status of an enterprise providing financial services, the availability and size of the authorized capital, the availability of licenses, the specifics of taxation, and reporting.

The Future of Financial Application Development

So, what will the financial applications of the future look like? Artificial intelligence and machine learning technologies will be at their core. With the help of these innovations, financial companies will be able to deliver an outstanding user experience, and empower them with data-driven insights and smart money management suggestions.

Blockchain technologies will be used to provide better security for users. Augmented and virtual reality will be used for fintech apps with the goal of simulating a visit to a physical bank branch. There are some that think that mobile-only banks like Ukrainian MonoBank will replace traditional banking institutions (i.e. the bank will be represented in the form of mobile apps exclusively.)

Conclusion

Ready to create a finance app using innovative technologies? Now you know more about the financial industry and the ways technologies drive it. The next step is getting in touch with a financial app development company to help you with the technical realization of your idea.