The finance and the banking industry receive a lot of hate for their slow and outdated banking processes. However, since the turn of the decade that has started to change, as the advancement in hardware and software technology sparked a wave of innovation across the industry.
In order to remain competitive and provide services as per the expectations of a growing and convenience-driven mobile user-base, financial institutions had to adopt technology solutions that not only provided cutting edge services but also solved real-world problems where traditional financial services fell short off. One way to address that was by introducing FinTech solutions into their technology strategy. Not only did this help banks and financial institutions increase revenue but also streamline many aspects of their operations.
In this article, we will have an overview regarding FinTech. We will shed light on the role of custom software development in the financial industry. We will also discuss benefits of FinTech solutions to the financial industry in general.
What is Financial Technology (FinTech)?
To put it simply, FinTech describe as the merger of technology and financial services. The primary aim of FinTech is to compete with the traditional methods of the financial system. It use cutting edge technology to improve and automate the delivery of financial services. FinTech use to streamline financial services for businesses, individuals and eliminate any unnecessary barriers associate with traditional financial methods.
What Exactly is Custom FinTech Software?
FinTech software or FinTech applications are any software products use in an institution offering any sort of financial services to either automate the delivery of financial services to end users or for the institution’s own internal improvement. When we apply the custom aspect to it, it really becomes those applications that develop for a specific set of requirements and business processes unique to a particular FinTech organization or financial institution. Some institutions also pursue custom fintech software development services to develop cutting edge technology solutions for their business.
Types of FinTech Applications Used in the Finance and Banking Industry
- Mobile Payments
- Payment Gateways
- Budget and Calculating
- Personal Consumer Banking
- Robo-Advising and Stock-Trading Apps
- Insurance
- Blockchain and Cryptocurrency
- Peer-to-peer lending/Crowdfunding
The Role of Custom Software Development in the Financial Industry
As the financial industry struggled to keep pace with the growing demand for technology-centered products and services. The pressure put by the growing mobile user base to provide convenient solutions that also had a pleasant customer experience. It immediately became quite clear that existing mechanisms to deliver financial services were either too outdated or simply impractical considering the modern fast-paced requirements of the mobile consumer. Hence, the only route was to innovate and accelerate the rate of technology adoption across the industry for a range of businesses operating within it.
Financial Institutions regulate by regulatory bodies, with each country having its own set of requirements and rules to follow. This makes financial institutions a very complicated place to implement one-size fits all software technologies. Hence, financial institutions required custom software development solutions in order to best address their unique set of requirements. Not only are they built specific to the functional requirements and use-case of the financial institutions but also optimized for the best user experience in accordance to their target customer profile. Pursuing such FinTech solutions allows banks and other financial institutions to fulfil regulatory obligations much faster than traditional mechanisms. It increase regulatory transparency in the process.
5 Ways The Financial Industry Benefits from FinTech Solutions
1: One advantage of FinTech solutions is that they can either be very independent or combined with existing systems. Under most circumstances the latter is the option albeit with some modification. Understanding this important characteristic about FinTech solutions, financial institutions partner with such companies to improve delivery of their financial services and increase profitability. When combined, the opportunity to take leverage of each other’s platforms increases greatly.
2: FinTech solutions allow billions of mobile users to connect to their platform and start using it for different purposes. For traditional financial institutions that integrate with such solutions, that’s a goldmine unlock. That’s millions of new customers that were previously inaccessible, to be now part of the economic system in a more digital way if not in the traditional sense. Because of this, traditional financial institutions can multiply their customer base and effectively improve retention numbers
3: By using FinTech solutions, financial institutions have access to a whole new variety of data that they previously had a little of but that too was not that readily visible. By using the latest visualization techniques, financial institutions have clearer insights on what their customers are doing with their money in real-time.
4: Financial institutions are increasingly burdened with regulatory obligations that alone take up a significant portion of the annual revenue generated by a financial institution. Besides the compliance to regulations, lending has become increasingly restrictive, the price of which customers and smaller banks and financial institutions have to face. By using FinTech solutions the process of adhering to regulations becomes a lot more faster. The chances of compliance increases and regulatory fulfilments becomes less complicated.
5: Customer experience is another important aspect that is improve for the customers that interact with financial institutions. Previously this customer experience is riddle with tedious, manual, and time-consuming processes. With the introduction of FinTech solutions that also act as a bridge between the institution and the customer. The journey of the customer is smooth, fast and way more convenient and efficient. Customer experience is so important, that financial institutions pursue custom fintech software development services that are specialized in developing customer centric customer flows that represent great brand value and utility.
