Challenges Faced by Fintech Software Development Companies and How to Overcome Them

The advent of Fintech, or Financial Technology, has supercharged the financial industry globally. 

Fintech software development gets its boost from the evolving technology landscape and the enhanced demand for financial services. This has disrupted traditional banking services like never before. 

With the combination of technology and financial services, the sector can deliver innovative solutions to customers and organizations. Every software development company in the USA helps financial institutions create web solutions that extend the reach of their financial services to consumers.  

When it comes to fintech software development, numerous challenges arise in the process. Be it regulatory compliance or security, such hurdles are known to disturb the flow of the work process in the product. In this blog, let’s discuss the biggest challenges in fintech software development and understand how to solve them. 

Let’s begin! 

Challenges and Solutions in Fintech Software Development

Regulatory Compliance 

When it comes to the fintech industry, the most significant challenge is compliance with regulations. Based on the geographical location of a business, there are different regulatory bodies that come into work while deploying the financial software solution. Be it the technology in use, the software, and a bunch of other things, each should adhere to the government regulatory policies to avoid legal consequences later. 

The challenge majorly remains the fact that these regulations keep changing with time. This makes it difficult for financial institutions to keep up and make the changes to their fintech solutions. 

Solution 

To navigate through the complex waters of compliance and regulations, it is advised to have a legal expert in the company. They will be responsible for staying abreast with all the latest regulatory policies so that you can implement the changes right away. Another way is to organize regular compliance audits that will inform if your software solution has any gaps with the regulatory compliances in place. The result of this audit will help you make quick decisions on how you can address the gaps and make the software compliant.  

Data Security 

The most significant challenge in fintech software development is the creation of solutions that serve the purpose and are secure as well. Physical banks safeguard all their valuables behind bullet-proof doors and armed security guards. However, securing digital financial products is getting more complex every day. The nature of financial data is extremely sensitive, and even a minor code vulnerability can cause major consequences. This is primarily because financial organizations deal with a huge volume of sensitive customer data. 

Another challenge in this respect is that in the quest to make the solution secure, developers cannot make the application complex. This is because customers expect fintech apps to be smooth and easy to use. If, for security reasons, the functionality and usage become complex, people might shift to a competitor offering a similar service. Striking the balance between functionality and security is the key here.    

The organization can risk all the customer data to hackers if adequate security measures are not in place. This can completely ruin the reputation and brand image of the company among customers. 

Solution 

The different solutions to implement to enhance the security of your fintech application are: 

• Biometric Authentication 
• Data Encryption 
• Two-factor authentication 
• Real-time notifications

High Cost 

For those players who are looking to enter the fintech market, the cost of fintech software development might seem high. The high cost is due to numerous factors, such as specialized skill sets, relevant experience, expensive hardware and software, and extreme web security.  

Solution

The top software development company in the US suggests certain solutions that can help manage the cost of fintech software development. They are: 

• Always partner with a reputed firm with existing expertise and resources for your fintech project. 
• Make use of open source solutions which will significantly help reduce the cost of development. 
• If you do not have a sufficient budget, utilize SaaS fintech platforms to build on top. These platforms are available on a monthly fee system. This also removes you from any responsibility regarding maintenance! 
• Decide which are the core functionalities that you wish to target with this fintech solution. Only incorporating such functions and focusing on them to make the application valuable should be the core goal. This way, you will save a lot of money by not adding additional features to the application. 

Long Development Period

It is true that often fintech software development can take a long time ranging between a couple of months to an entire year. For companies who are looking to quickly shift to market trends and demand, such a long time for development might pose a significant challenge. This depends on the fintech software development company you choose to work with and the process they follow.   

Such long times can increase the cost of development, postpone the launch of the product, and cause frustration among customers. The competitors can use this time frame to come up with a solution in a quicker time and attract the audience to it.  

Solution

Your partner software development company in USA can suggest the following measures to cut down on the development time: 

• Make use of agile methodologies to fasten the development process 
• Utilize outsourcing fintech software development companies to get the work done 
• Look for pre-built solutions 
• Divide the sprints into smaller phases. This helps make the development of a complex fintech application easier and segmented. 

Conclusion 

Every software development company in the US is getting increasing requirements for fintech software development projects. It is a complex industry with a multitude of challenges ranging from regulatory compliance to development costs and more. To navigate through such challenges, it is essential to team up with a credible fintech software development company. Selecting a niche company for this work is essential as they will be well aware of the industry trends and regulations. This way, you can save work and reiteration process, ultimately enabling you to launch your fintech solution faster and more effectively. The customer demand for such solutions is high, and hence it is the best time to make a move and start your fintech software development project!