Crunching the Numbers: How to Calculate Fintech App Development Expenses

Fintech refers to Financial Technology. Finance represents the various transactions, and Technology is a method that makes these transactions easy. Fintech applications are enablers of streamlining & automating the transaction process. Various transactions such as banking, payments, budgeting, trading, investing, etc. can be done easily thanks to the new generation of fintech applications. There are various technologies that play a key role here such as Blockchain, Artificial Intelligence, and Data Analytics. These applications make transactions faster, more accessible, and user-friendly.

There are various types of Fintech Applications such as Mobile Payment Platforms, Investment, Financial Advisors, Trading Platforms, Peer-to-peer Lending, Cryptocurrency Management, Online Wallets, Budgeting Platforms, etc. Startups often aim to use fintech applications to take down traditional finance systems.

Importance of Fintech Applications

The world is evolving rapidly and use cases of Fintech apps have crossed many bars that were limited earlier. Nowadays there is a new finance application booming every other day. Finance applications aren’t just a medium of convenience, they’ve become a necessary part of modern life.

Accessibility

Fintech applications provide accessibility to everyone. Every individual who fits in the eligible criteria for using the app can use it without any restrictions. The geographical and social barriers do not apply to online technologies.

Convenience

Fintech applications can offer convenience since they can be operated 24*7. The ease of allowing users to do transactions at any hour plays a big advantage in favour of new-age fintech applications.

Innovation

The rise of competition in the fintech sector challenges traditional institutions to evolve and provide better services to users. The competition eventually benefits the users.

Personalization

When it comes to Build a Fintech App, personalise the experience for each user. The input data uses Machine learning to train and provide the experience the user demands.

Security

Various types of Security protocols like fingerprint scanning, and biometric verifications add a security layer for users.

Fintech apps help to reshape the financial world. These applications are changing the relationship of humans with money and finance in a true sense.

Current Trends in Fintech Apps

Mobile Banking

Smartphone usage has given a boost to fintech applications development. Mobile banking has become a dominant tool that helps users manage finances through the convenience of a phone.

Blockchain

The adoption of Blockchain technology offers enhanced security and transparency. Blockchain technology is based on ledgers that run and verify on a vast network. This eliminates the fraud caution.

Artificial Intelligence & Machine Learning

(AI) Artificial Intelligence and ML (Machine Learning) can help personalised experience. The technology also helps in fraud detection and enhancing overall user experience.

Regulatory Tech

Fintech applications incorporate regulatory technology to comply with policies and manage risks related to finance.

P2P

Peer-to-peer lending and payment applications offer an alternative to the traditional financial system. P2P systems allow people to transact with each other and follow banking terms.

Contactless Payment

The acceleration of touchless or contactless payments has received a major boost, especially after the COVID-19 pandemic. Contactless payment offers ease of conducting a transaction without being involved physically.

Open Banking

Open Banking encourages new companies to use the existing infrastructure of financial systems by third-party developers. This process allows the creation of new types of applications.

Analysis of Successful Fintech Apps

Revolut

Revolut is a neo-bank that allows users to send money to 160 countries. The app supports different types of currencies and converts them as required. One can also use ATM service using Revolut.

Square

Square is a financial application that helps businesses to accept contactless payments. The app allows major debit cards, credit cards, and mobile payments.

Paypal

Paypal is a financial network that allows two parties to conduct transactions between each other. Paypal also offers a platform to pay for shopping online and pay for it using a bank account.

Venmo

Venmo is an app that enables sending and receiving money online. It allows payment only through the Venmo application.

Robinhood

Robinhood is a stock trade platform. The platform offers different types of financial instruments such as stocks, funds, cryptocurrencies, etc.

Types of Fintech App

Investment App

Investment applications are designed to simplify the process of investing. These applications allow users to buy & sell investment instruments and manage investment portfolios using smartphones.

Diverse Investment Options

Investment applications allow diverse investment options such as stocks, bonds, cryptocurrency, mutual funds, and ETFs. These applications also offer options and futures trading options.

Automated Investing Facility

Some investment applications offer automated investing facilities. Automated investment helps in managing a portfolio without being in touch constantly. Machine learning and Artificial Intelligence Robot manages the finance automatically based upon the input risk and reward ratio.

Real-Time Investment Value

Applications are connected to servers the entire time and hence it is very easy to know the real-time value of any investment that has been made. These applications allow up-to-date market data at any given time.

Educational Resources for Users

Educational resources help new users and existing users understand the market and the investment methodology more easily. These resources may include articles, guides, tutorials, webinars, seminars, etc.

User Friendly

To help users navigate easily these applications are created in a user-friendly manner. Those with minimal investment knowledge can also use investment applications without any hassle.

Payment App

Payment apps allow the transfer of money easily and conveniently. Payment has become an integral part of the modern ecosystem.

Peer-to-Peer (P2P) Transfer

P2P transfer allows people to exchange the money with each other. These apps enable users to send and receive money from each other. These types of applications are useful for handling small payments.

Merchant Payments

Merchant Payments include online and offline stores. This includes QR Codes, NFC Technology, and an online checkout system.

Bill Payment and Recharge

This facility allows users to pay online for various types of bill payments and recharges. This may include utility bills, mobile recharges, and regular payments.

Multiple Payment Sources

Payment applications can sync multiple payments in a single place. This application can sync bank accounts, online investments, and debit/ credit cards.

Money Management

The money management feature can help with Budget setting, tracking spending, and categorising expenses in different formats.

Lending App

Lending apps allow individuals to take loans for personal and business uses.  Lending applications promote the lending process and make it easy to borrow money using mobile applications.

Risk Assessment

Machine Learning and Artificial Intelligence algorithms can track and assess users’ data to check their previous history and creditworthiness. The data points can analyse the data and lead to a faster loan approval process.

Flexible Terms

Lending apps offer flexible terms compared to traditional loan-providing institutions. This also includes customised payment and instalment facilities.

Micro and Small Loans

Sometimes a small loan is required for a handy payment. Lending applications specialise in small and medium-sized loans.

Investment Opportunities

The investment opportunities are vast for wealthy individuals. These applications can allow one to borrow money from other individuals and earn a higher interest rate.

Insurance App

Insurance Applications leverage the technology to streamline the process of purchasing new insurance or renewing existing insurance using a smartphone.

Policy Purchase

These apps allow users to buy different types of policies online. The policies can be customised as per the requirements of users. The insurance application can also provide instant quotations and comparisons with other policies.

Claim processing

Users can file claims online by filling out digital forms and uploading necessary documents. The documents then can be verified without the need to visit the verification facility physically.

Customer Support

Mobile Insurance applications provide 24/7 customer support. Providing round-the-clock customer support helps users answer their queries at any given moment in case of emergencies.

Policy Renewals

This application can help policyholders to renew their existing policies using the application. Allowing easy renewals removes the hassle for policyholders and frees them from worrying about remembering the dates.

Educational Resources

Insurance applications provide educational resources so that users can learn about different types of policies and select the one that fits the criteria. The educational resources can be available in the form of guides, videos, webinars, articles and FAQs.

Financial Management App

Financial Management Applications provide different types of tools that let individuals manage their finances. The need for these tools may depend upon the requirement.

Budget Tracking

The budget tracking applications can help to track the ratio between budget and expense. This application can fetch data on credit cards, loans, and debit cards and provide the categorised data with an alerting facility.

Goal Tracking

The facility allows users to set a goal that can be specific to a financial goal such as going on a vacation, buying a car, or emergency funds. The application then allows one to track savings to reach that goal.

Investment Tracking

Tracking applications keep an eye on investments and track portfolios. These applications warn users if the investment is going in a negative direction. Timely action can benefit users from major losses.

Bill Management

These applications manage the regular bill cycle and send reminders. This application tracks and ensures bills are being paid on time. Some applications also offer auto deductions on regular bill payments.

Crypto App

Crypto applications help users trade cryptocurrencies. Crypto platforms let users buy, sell, store, trade, and manage various currencies. These currencies include Bitcoin, Ethereum, or Shiba Inu.

Crypto Exchange

Crypto exchange platforms help buy and sell a range of cryptocurrencies. The platform works just like a stock investment application. Here users can get real-time data and exchange rates of cryptocurrencies.

Wallet

Users can utilize the crypto wallet to store their digital currency online. These wallets allow users to store their cryptocurrencies securely. Users can store money digitally and use private keys to access their accounts.

Investment and Portfolio Management

Users can track the performances of cryptocurrency investments and check their portfolios. Users can also diversify their portfolio to decrease the risk in case of one currency failing.

Staking

Crypto staking is a crypto validation process that helps users earn rewards based on their validation. Many users opt for staking by utilising the in-house system rather than purchasing crypto.

Education

The knowledge of crypto is still very limited among the users. The educational learning material can help the users learn more about the industry and the investment opportunities.

Security

In this type of application funds security plays an important role. Multiple layers of security need to be added to help users. These applications offer decentralised security systems which plays a part to help the users.

Neo Banks

Neo banks are also known as new-age banks, these banks represent a shift in banking. Compared to the old-generation physical banks, these banks are present virtually.

Account Management

Users can open and manage accounts online. These accounts can be opened online and can be managed without the interference of visiting a physical branch. This application also gives access to accounts within minutes so the users can use them instantly.

Money Transfer

Neo Banks offer online money transfers including P2P (Peer-to-peer), Bill payments, wire transfers, etc. Users can similarly use the account like a regular bank account.

Budgeting

The budget and expense tracker tool helps to create and follow budgets for particular goals. The application also helps in categorising the transactions and setting limits.

Investment

Automated round-ups on purchases can help users save a small fraction of money without actively saving it. Applications may also offer options to invest in buying financial instruments such as stocks, bonds, and mutual funds.

Debit Card

Virtual and Physical debit cards play a lucrative feature to attract more users. Many users get attracted to the idea of getting a new debit card and saving money with the rewards that come with it.

Customer Support

Security and customer support are prioritised in Neo Banking applications. These banks do not have any presence online, so 24/7 customer support is required for features like PIN change, balance inquiry, and query tracker.

Regtech App

Regtech are Regulatory Technology applications. These applications allow users to learn about regulatory technology efficiently and increase existing capabilities. The financial service industry faces multiple compliance issues that can be taken care of thanks to the reg tech applications.

Compliance

Regtech applications monitor and track the operations of the company and update the existing system. The application assesses risks and uses different tools to mitigate potential losses.

Reporting

Regtech applications can create reports automatically with the present data. This reduces a lot of manual work and the chances of errors. The advanced algorithms used in the system help to leverage the data.

Documentation

Regtech applications can help take care of E-KYC (Know Your Customer) and AML (Anti-Money Laundering and Machine learning also help in fraud detection and alert when there is some fraud activity.

Transaction Monitoring

Regtech applications can provide real-time transaction analysis. The analysis can help to identify the unusual activities in the account. Once the pattern is recognized it becomes easier to prevent wrong and fraudulent transactions.

Regulatory Management

Regtech primarily helps to cope with regulations. Since these applications are always up to date with the latest regulatory changes it becomes easier to amend new changes keeping the regtech application in the centre stage.

Crowdfunding App

Crowdfunding applications are used primarily for fundraising activities. The applications help individuals, groups, and organisations to achieve specific goals. The democratisation of these apps makes them a global project.

Project Creation

Users can create a fundraising campaign and provide information about the project. Users can add information such as goal type, timeline, add pictures, videos, and other related information. Users can track the progress of the projects.

Donation Management

There are always various types of payment options and amounts in crowdfunding. A platform for finance management and a list of contributors along with the amount provided should be generated for ease of project creation. The finance management should be transparent.

Social Media

The integration of social media sharing plays a key role in maximising the reach of the project. Project planners often use social media to promote the project in the hope of raising funds from supporters. Community building plays a key role in the success of applications.

Fraud Prevention

Crowdfunding applications have to develop a system to prevent fraudulent projects away from the platform. Many project developers may create fake projects and lure investors and backers.

Cost to Develop a Fintech App

Many different factors play a part when it comes to determining the cost of developing a fintech application. The primary factor is the approximate time required for the development. Some applications are easy to develop and can be ready in less than 1,000 hours while in some cases complexity is on the higher end and the application can take up to 5,000 or more hours to be completed. The average cost to develop a fintech app can be categorised is as follows

Investment Application – $50,000 to $1,50,000

Payment Application – $40,000 to $80,000

Lending Application – $30,000 to $70,000

Insurance Application – $30,000 to $1,25,000

Financial Management Application –  $40,000 to $60,000

Crypto Application – $100,000 to $500,000

Neo Bank Application – $150,000 to $350,000

Regtech Application – $25,000 to $75,000

Crowdfunding Application – $40,000 to $100,000

Stages of Fintech App Development

Define Purpose

Find the objective of the application. This step involves identifying the problem in the existing market and coming up with a solution that can solve it. This stage helps in clearing the initial thoughts to decide the shape of the application.

Market Research

A thorough market research about the current market and the market it’ll become in the future can help to determine the growth of the and advancements. This stage helps in making informed decisions.

User Need Analysis

Understand the needs of the users. Understanding the user persona and the target audience can help come up with functionalities that will connect with actual users, so they can find it useful.

Competitor Analysis

Analysing the existing competitors that are providing similar services can help know how the users are perceiving the service. It is easier to know and avoid making the same mistakes that were once made by competitors.

Brainstorming

Continuous brainstorming can help generate a wide bank of application ideas. The user experience can be refined and developed by brainstorming on multiple stages.

Feature identification & Prioritisation

The features that are going to be crucial must be developed in the first phase of the application development. Many organisations make the mistake of developing multiple features simultaneously which ultimately delays the application release date and hampers users. Application development must be done in phases with feedback from users.

Prototyping & Validation:

The first version of the application is known as a working prototype. This experimental application provides all the functionalities and iterates continuously for a better user experience.

Development

Converting the development idea into actual development is important. Here execution must be done using the right technology to get the desired outcome from the application. Here the final version of the application is finalised.

Testing

The testing application continuously helps to secure vulnerabilities in the application. This includes testing performance, functionality, security, and reach to the audience.

Deployment

The launched application can finally be deployed once the testing phase is completed. The deployment includes the launch of the Beta version to the public and making it live on both Android and iOS app stores. This marks an entry of application in the market.

Maintenance

Continuously maintaining applications is important to make sure there are no bugs in everyday use. The application should remain compliant with regulations and technological advancements. Applications that remain functional with the latest mobile and OS versions have a higher probability of being successful over time.

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