The Fintech sector combines technology and finances in order to create technical solutions in the financial field. It revolutionized the way we manage finances and make transactions and allowed us to move from the constant use of cash, which can be not secure and inconvenient, to monitoring all our finances using just a smartphone.

Fintech applications allow us to instantly pay for products and services, receive and send money, invest, exchange, and make other financial transactions in a matter of seconds. Such applications are mostly divided into:

1. Digital Banking
2. E-wallets
3. Finance Management

Each type has its own approach to application design and architecture. In this article, we talk more about them, their features and differences.

1. Digital Banking 

Fintech has had a significant impact on traditional banking, fostering the appearance of digital services in the finance industry. Digital banking has allowed financial institutions to cut operational expenses, allowing them to concentrate on the users’ needs and provide a smooth and seamless experience. Neobanks (digital banks) have recently emerged, and they often partner with traditional banks to secure their financial operations. Since neobanks don’t have offices, they can provide all the services remotely. And this is beneficial both for them and the users.

The key features of digital banking are:

• The mobile-first approach allows users to manage their financial and banking operations on the go from wherever they are using their smartphones.
• No physical branches or, at least, no need to use them for most banking operations – opening an account, closing the card, etc.
• Innovative services like expense categorization, budgeting tools, financial insights, etc.

Digital Banking App Features

The mobile-first approach led to the emergence of banking apps and systems. Revolut, PayPal, and Chime — are all examples of such services. They are packed with useful features that allow users to take the most out of their experience with the app while managing their budgets and expenses.

The most important digital bank features include:

• Easy registration process — registration and opening an account/issuing the card only take a few minutes and clicks.
• Real-time notifications allow tracking of all payments and transfers.
• Management tools like showing the budget summaries and spending patterns in a clear way using charts and dashboards.
• Integration with third-party services — these include partnerships with various companies so that users can use their products right from the online banking app (insurance, digital wallets, etc).   

2. Apps for E-wallets 

Electronic or digital wallets allow users to actually use the money they have in online banking to pay for things. They work through an online platform and are linked to the bank cards or accounts the user has. Some of them allow for storing ID cards, tickets, driver’s licenses, etc. Overall, it’s a safe way to store and manage payment methods.

E-wallets can be differentiated by access to them: 

• Open wallets can be used only for transactions between the issuing bank and another major bank. 
• Semi-closed wallets only allow for making transactions at certain merchants or locations.
• Closed wallets can only be used by certain people, for example, a company’s customer (like Amazon Pay).  

Most e-wallets work using NFC technology (​Near Field Communication) — like Apple Pay and Google Pay. Some use Quick Response Codes or Magnetic Secure Transmission. The rules for using e-wallets may vary from country to country and they may be limited or prohibited in some states.

E-wallet App Features

E-wallets provide a fast and secure way to manage payment tools. Since you often need the money on the go, these apps have additional convenient features to streamline financial operations:

• Quick user registration basically only means indicating your ID and adding the Face ID.
• Card authorization to connect a debit or a credit card to the wallet.
• History of transactions, allowing you to keep track of the conducted financial operations.
• Bill payments for automated payment for utilities and subscriptions.
• Account balance management that includes adding funds and checking their amount.
• Push notifications to keep the user informed about all recent activities.
• Loyalty reward offers like cashback or discounts to loyal users of the wallet.

3. Personal Finance Management App

Finance management apps are another popular implementation of fintech solutions. In 2018, around 63% of smartphone users had at least one financial app. In recent years, however, this number has increased to over 70% of users. This shows us that the trend for managing finances is only rising.

One of the biggest advantages of Fintech solutions is providing users with the possibility to manage their finances without involving the banks in the process. Personal finance management apps are usually connected with digital banking, so people can track expenses and earnings, view statistics, and plan budget spending. Funds management applications can help users set long-term financial goals and achieve them by using automated features like spending limits and auto-saving features.

Personal Finance App Features

Finance management apps allow users to gain control over their budgets and manage finances effectively. Their most useful features include: 

• Transaction management allows to monitor all operations for all accounts and categorize them.
• Tracking expenses and earnings to see the ratio of money spent to the money earned.
• Achieving financial goals that can be saving for a large payment, paying off debt, investment, etc.
• Saving feature that can be automated to set aside some percent out of earnings in a given time period.
• Adjusting financial behavior by identifying the areas where you spend the most or the least and correcting them. 

4 Fintech Design Challenges

Designing a fintech app is quite a challenge since personal finances are a delicate matter. That’s why it should be convenient and user-friendly, work smoothly, manage complex workflows, and be super-secure. The main formidable challenges are discussed below. 

1. Maintaining Simplicity/Compliance Balance 

A finance app should be simple enough for users to navigate through their routine financial tasks. Yet, it has to comply with all the regulatory and legal requirements that can complicate the design. For example, it would be very easy to create autofill login data or account details on the smartphone without having to fill it out every time. But according to some personal data requirements, websites or apps can’t store such data and auto-fill it.

However, there are some methods to navigate through user-friendliness and compliance.

1. Ensure transparent communication. Make sure to clearly explain why you need some information, how, where, and for how long it will be kept. Let the user know that some features are not just the developers’/designers’ whim but a necessity to meet legal standards.
2. Collaborate with legal and compliance experts. The legal world has so many nuances that it’s easy to forget or omit them. Although omitting some of them might make the customer journey easier, it may lead to compliance issues jeopardizing the whole app — and the users’ money.
3. Test and gather feedback. The user is the main person that can help you hone the app. Thanks to their feedback, developers will know which features they can sacrifice to make the app simpler and get valuable insights to make informed design solutions. 

Overall, since there is money at stake in financial apps, users will likely be more willing to let go of the maximum simplicity to ensure the safety of their funds.

2. Managing Complex Financial Workflows

Fintech applications have peculiar workflows — the sets of features for achieving some goal. They often involve intricate processes such as account setup, transaction management, or investment tracking. Such flows should be presented to users clearly, which is not always the case.

There are some approaches to managing such complex tasks:

1. Use information hierarchy. Utilize all the markup tools at your disposal – headings, subheadings, labels, lists, etc. This will allow the user to understand more clearly the action they need to take.
2. Visualize data. It’s already been proven that some complicated things can be better explained and memorized using visualization instead of textual description. Plus — it will save a lot of space in the app and make it easier for users to focus on.
3. Provide the necessary guidelines and support. Add instructions or guides to explain the intricate processes. Ensure you have a skilled support team to answer the questions and address the issues the user might experience.
4. Get users’ feedback by testing the flows. Ideally, it’s best to conduct user testing and interviews at every stage of design. This will not only allow them to meet their needs but will help to identify their pain points and areas of confusion.

3. Ensuring Cybersecurity

One of the most challenging aspects for an app in general, and a financial app in particular, is ensuring the highest levels of cybersecurity. Developers must follow the best coding practices to implement the latest security measures, including input validation and API integration. 

We all know that the password problem is a number one headache for both developers and users. That’s why there must be strong authentication mechanisms in place: MFA, 2FA, hashing, and so on. Users must be aware of the fact that using one password for all apps is dangerous — implementing pop-up messages with password requirements is a great idea.

The work of fintech apps entails constant communication between the app and the server. This also requires powerful security mechanisms so as not to compromise sensitive financial data. Various encryption protocols are meant to encrypt this app-server interaction and turn malicious people away.  

4. Keeping up with Technological Advances

In order to quickly adapt, you have to think about scaling in advance and choose the technology that is flexible and allows for future development. You can build a foundation and then use modular design — to change and adjust its parts when new solutions appear. This will ensure the continuous development and improvement of the app without having to build it again from scratch.

Another way to go might be embracing some Agile methodologies. Things like iterative design and development cycles will allow the team to make iterations quickly and smoothly. They will also help with the integration of the new features and updates.  

How RoveTek Can Help You to Design a FinTech App?

Building and maintaining a fintech app may be a difficult task. It’s not easy to navigate between simplicity, efficiency, and user satisfaction. That’s why you need a dedicated team of professionals well aware of current technology trends and skilled in design solutions for the finance sector. 

At RoveTek, we specialize in fintech and have deep expertise in designing applications tailored for the finance sector. Our experienced team of developers consists of back-end and front-end specialists ready to implement your vision. We will also ensure the security, stability, and compliance of the app with the regulations at each point of the design process.

FinTech is undergoing a remarkable transformation. The latest projections reveal a positive trend within the FinTech industry as revenue is expected to hit $1.5 trillion by 2030. A combination of factors, including advancements in critical technologies like artificial intelligence (AI), payment options, and cybersecurity, is causing this forward momentum. 

The continuous development of AI empowers FinTech companies to offer advanced analytics, personalized financial recommendations, and enhanced risk assessment. As AI algorithms become more refined, they enable tailored solutions that increase customer satisfaction and loyalty.

What’s more, cybersecurity has emerged as a critical consideration in the increasingly digital world of financial transactions. FinTech firms now invest heavily in cybersecurity measures to safeguard sensitive customer data from the ever-growing range of cyber threats.

The FinTech industry is also revolutionizing payment methods, fundamentally reshaping how we conduct transactions. Today, developing countries are experiencing a surge in mega-deals driven by the vast untapped market of individuals who need access to banking services. This dynamic creates fertile ground for rapid growth and illustrates the industry’s varied trends.

Ant Financial, valued at approximately $150 billion as of June 2019, is a prime example of these trends. Ant Financial embodies the convergence of evolving technologies, changing payment methods, and the growth potential in developing regions.

FinTech Market in Numbers

 Here are some current FinTech statistics:

• The FinTech sector is worth approximately $179 billion. 
• FinTech industry investment has increased by 3.5x since 2015. 
• Venture capital investment has consistently topped $40 billion per year. 
• Global FinTech investment was $164.1 billion across 6,006 deals in 2022. 
• Payments remained the strongest area of FinTech investment globally in 2022, with US$53.1 billion in investment compared to US$57.1 billion in 2021. 

11 Trends That Shape the Industry

The financial industry is constantly evolving, driven by new trends that change the way you handle money. Let’s explore eleven influential trends that are currently shaping the financial landscape.

1. Central Bank Digital Currencies (CBDCs)

CBDCs refer to digital forms of national currencies issued and regulated by central banks. These digital currencies aim to leverage the benefits of blockchain and distributed ledger technology to enhance efficiency, transparency, and financial inclusion.

What Precedes This Trend?

Several factors have contributed to the advancement of CBDCs. For starters, the growing adoption of digital payments has highlighted the need for secure and efficient digital currency solutions. Blockchain and distributed ledger technology have also provided the groundwork for developing CBDCs, offering secure and decentralized transactional platforms.

How Does It Simplify Our Lives?

Introducing CBDCs has multiple benefits that simplify financial transactions. These benefits include:

1. Enhanced Transaction Speed: CBDCs enable instantaneous transactions, reducing the time required for cross-border transfers.
2. Increased Financial Inclusion: CBDCs have the potential to provide banking services to unbanked populations, granting them access to financial services.
3. Improved Transparency: By leveraging blockchain technology, CBDCs ensure transparent and auditable transactions, minimizing fraud and corruption risks.
4. Financial Stability: CBDCs offer central banks better oversight and control over the monetary system, preventing financial crises and ensuring stability.

2. Neobanks

Neobanks have emerged as a significant trend in the financial industry. These digital-only banks operate exclusively through mobile apps or web platforms, offering customers a modern and convenient banking experience.

What Precedes This Trend?

Technological advances have facilitated the growth of neobanks through the increase in the accessibility of financial services via digital platforms. In addition, changing consumer preferences have driven the demand for seamless and user-friendly banking solutions. 

How Does It Simplify Our Lives?

1. Convenience: Neobanks offer 24/7 access to banking services through user-friendly mobile apps. This eliminates the need for physical branch visits and lengthy paperwork.
2. Seamless Account Setup: Opening an account with a neobank is typically quick and straightforward, often requiring only a few minutes and minimal documentation.
3. Enhanced User Experience: Neobanks prioritize intuitive and user-friendly interfaces, providing a streamlined and personalized banking experience tailored to individual preferences.
4. Cost Savings: Neobanks often have lower operating costs than traditional banks, allowing them to offer competitive or fee-free services, such as zero-fee transactions or low foreign exchange fees.

3. Biometric Authentication

Biometric authentication is revolutionizing digital identity verification. It involves using unique physical or behavioral characteristics, such as fingerprints, facial or voice recognition, to authenticate individuals.

What Precedes This Trend?

Biometric authentication has made significant strides in recent years — for multiple reasons. The primary reason is the increase in illegal online activities, such as cyberattacks and identity fraud. It has therefore become necessary to take more robust security measures in order to protect data. Sensor accuracy and affordability have further enabled the deployment of robust user verification across all demographics.

How Does It Simplify Our Lives?

Biometric authentication offers several benefits that simplify our lives. These include:

1. Enhanced Security: Biometric authentication provides higher security than traditional methods like passwords or PINs. Since biometric traits are unique to individuals, it significantly reduces the risk of unauthorized access.
2. Fraud Prevention: Biometric traits are difficult to replicate, reducing the likelihood of identity fraud or impersonation. This ensures that only authorized individuals can access sensitive information or perform transactions.
3. Versatility: Biometric authentication can be implemented across various devices and platforms, including smartphones, laptops, and banking applications. This versatility allows for a consistent and secure authentication experience across multiple services.

4. Robotic Process Automation (RPA)

Robotic Process Automation (RPA) is a trend involving software robots or “bots” to automate repetitive and rule-based tasks typically performed by humans. These bots mimic human interactions with digital systems, enabling efficient and accurate execution of processes.

What Precedes This Trend?

The growing need to optimize processes and reduce costs in different industries has driven organizations to explore automation solutions, which has led to RPA’s advancement. The advancements in artificial intelligence and machine learning have improved the capabilities of RPA. This has made RPA more versatile and capable of handling complex tasks.

How Does It Simplify Our Lives?

Robotic process automation has simplified our lives in many ways, including:

1. Error Reduction: RPA eliminates human errors and inconsistencies since it follows predefined rules and executes tasks precisely. This improves the accuracy and reliability of processes, reducing the likelihood of costly mistakes.
2. Scalability: RPA allows organizations to scale their operations without significant additional resources. Deploying and scaling up or down bots based on demand is easy, providing organizations with flexibility and agility in handling workload fluctuations.
3. Improved Customer Experience: RPA streamlines processes, enabling faster response times and smoother customer interactions. This enhances customer satisfaction and loyalty, as customers experience quicker and more efficient service.
4. Compliance and Auditability: RPA ensures adherence to regulations and compliance requirements by consistently following predefined rules and procedures. It provides a transparent and auditable trail of activities, facilitating compliance audits and mitigating risks.

6. Green FinTech

Green FinTech is a trend that focuses on integrating sustainable practices and environmental considerations into financial technology solutions. It leverages technology to drive positive environmental outcomes and promote sustainable investments.

What Precedes This Trend?

Several factors drive the advancement of Green FinTech. The increasing awareness and urgency surrounding climate change and environmental issues have highlighted the need for sustainable practices across all industries, including finance. Additionally, regulatory frameworks and policies promoting sustainability, such as the Paris Agreement and various green finance initiatives, have created a supportive environment for the growth of Green FinTech. 

How Does It Simplify Our Lives?

Green FinTech offers several benefits that contribute to a more sustainable future. They include:

1. Sustainable Investments: With the rise of green finance technology, individuals and businesses can make informed sustainability-centric investment decisions. These investments go beyond mere profitability and align with one’s personal values regarding environmental protection, making a positive contribution to the green planet.
2. Carbon Footprint Tracking: With Green FinTech platforms, individuals and organizations can access efficient tools to closely monitor and analyze their carbon footprints. This offers a chance to make well-informed decisions toward minimizing carbon emissions.
3. Digital Sustainability: Green FinTech embraces digitalization and paperless processes, reducing the need for physical documents, hence minimizing paper waste. This simplifies administrative tasks, saves resources, and contributes to a more sustainable and environmentally friendly workflow.

7. Voiceprint Technology

Voiceprint technology is a trend that encompasses voice recognition and natural language processing capabilities to enable voice-based interactions and transactions. It leverages the power of voice assistants and smart devices to provide a seamless and intuitive user experience.

What Precedes This Trend?

The growing ubiquity of virtual assistant services — Siri, Google Assistant, Amazon Alexa — has increased our comfort level with speaking directly to our personal devices. This has ultimately fueled the demand for sophisticated conversational interfaces across diverse industries. 

Tremendous strides have been made in advancing speech recognition and natural language processing tools that underpin these systems. This has resulted in higher levels of accuracy in understanding user intents, translating into improved reliability & efficacy. 

How Does It Simplify Our Lives?

Voiceprint technology offers several benefits that enhance convenience. These are:

1. Hands-Free Operation: Voice commands eliminate manual input, allowing users to perform tasks and access information without physically interacting with a device. This is particularly beneficial when a hands-free operation is desired or users have limited mobility.
2. Personalization: Voice recognition technology can identify and differentiate individual users, allowing personalized experiences and tailored responses based on user preferences. This personalization enhances user engagement and satisfaction.
3. Safety: Voice commands can be used when manual interaction is unsafe or distracting, such as when you’re driving a car. Voiceprint technology promotes safer user interactions and reduces potential risks by providing hands-free control.

8. DeFi Apps

DeFi apps, short for decentralized finance applications, refer to financial applications built on blockchain networks that provide traditional financial services in a decentralized manner. These apps aim to eliminate intermediaries, increase transparency, and empower users with greater control over their financial activities.

What Precedes This Trend?

Blockchain technology and smart contracts form the bedrock on which decentralized financial applications are built. Moreover, the growing interest in cryptocurrencies, the potential for earning higher yields, and the participation in decentralized lending and borrowing have contributed to the popularity of DeFi apps.

How Does It Simplify Our Lives?

1. Elimination of Intermediaries: DeFi apps eliminate the need for intermediaries, such as banks or brokers, reducing costs, improving efficiency, and increasing transparency in financial transactions.
2. Global Accessibility: DeFi apps are accessible to anyone with an internet connection, regardless of location. This enables individuals from all around the world to participate in decentralized financial activities without restrictions.
3. Programmability: DeFi apps leverage self-executing smart contracts with predefined rules to automate financial processes. It enables the development of innovative financial products and services with customizable features.
4. Yield Generation: DeFi apps provide opportunities for higher yields through liquidity provision, staking, and yield farming. Users can maximize their returns on digital assets by participating in decentralized lending and borrowing protocols.

9. Quantum Computing

Quantum computing is a trend that revolves around the development and utilization of quantum computers. It leverages the principles of quantum mechanics to perform complex calculations and solve problems more efficiently than classical computers.

What Precedes This Trend?

There is an increasing demand for powerful processing capabilities as scientific, mathematical, and optimization challenges become more complex. With classical computers proving inadequate, experts have explored quantum computing, which enables more sophisticated data analysis by manipulating quantum states. 

As innovation accelerates, there is keen interest in the potential benefits of applying it to practical use cases.

How Does It Simplify Our Lives?

Quantum computing can revolutionize various fields including:

1. Advanced Cryptography: Quantum computing can break current cryptographic algorithms that rely on the difficulty of factoring large numbers. However, it also opens up the possibility of developing new cryptographic systems resistant to quantum attacks, enhancing the security of digital transactions and communications.
2. Drug Discovery and Materials Science: Quantum computing can accelerate the discovery and design of new medications and materials by simulating molecular interactions and properties. This could lead to faster development of life-saving drugs and advanced materials with unique properties.
3. Optimization and Logistics: Quantum algorithms can optimize complex systems, such as supply chains, logistics networks, and transportation routes, resulting in more efficient resource allocation, reduced costs, and improved overall performance.
4. Machine Learning and Artificial Intelligence: Quantum computing can enhance machine learning algorithms by providing faster training and improved pattern recognition capabilities. This can lead to image and speech recognition advancements, natural language processing, and data analysis.
5. Financial Modeling and Risk Analysis: Quantum computing can facilitate advanced financial modeling, portfolio optimization, and risk analysis by quickly processing large datasets and running complex simulations. This can help make more informed investment decisions and manage financial risks more effectively.

10. NFTs

Non-fungible tokens, also known as NFTs, are unique and indivisible digital assets based on blockchain technology. Unlike cryptocurrencies, NFTs cannot be exchanged like-for-like, as each token has distinct characteristics and value.

What Precedes This Trend?

The growing popularity of blockchain technology proved helpful in constructing secure ways of tracking individual digital belongings. Naturally, this development led to a higher demand for verified means to associate ownership credentials with digital assets in arts, collections, or virtual reality worlds. This phenomenon is furthered by creators’ eagerness to monetize their work and directly engage with their patrons through NFT adoption.

How Does It Simplify Our Lives?

1. Authenticity and Provenance: NFTs provide a secure and transparent way to verify the authenticity and provenance of digital assets. Using blockchain technology, NFTs can verify the ownership and origin of digital art, collectibles, and other unique digital items. This helps combat issues like counterfeiting and fraud in the digital space.
2. Ownership and Control: NFTs empower individuals with ownership and control over their digital assets. Using NFTs, collectors and creators can establish direct relationships, bypassing intermediaries and traditional gatekeepers.
3. New Economic Models: NFTs have opened new economic models and revenue-sharing opportunities. Smart contracts embedded within NFTs can automatically distribute royalties to creators each time their digital assets are sold or traded, ensuring ongoing financial benefits. This enables artists to generate income beyond the initial sale of their work.

11. Gig Economy Financial Solutions

Gig economy financial solutions refer to financial services specifically designed for gig workers and independent contractors. 

What Precedes This Trend?

The rapid expansion of the gig economy, driven by technological advancements and changing workforce dynamics, has created a significant demand for financial services that cater to the specific needs of gig workers. 

How Does It Simplify Our Lives?

1. Financial Stability: These solutions provide gig workers with tools and resources to better manage their income and expenses, helping them achieve financial stability. Budgeting tools, expense tracking, and cash flow management features can assist gig workers in planning for irregular income and effectively managing their finances.
2. Access to Credit: Gig workers often need help obtaining credit from traditional financial institutions due to their non-traditional employment status. Alternative credit assessment methods, such as evaluating gig workers’ income streams and transaction histories, are used by gig economy financial solutions to offer credit and financing options specific to their needs.
3. Streamlined Financial Management: Dedicated platforms and apps tailored for gig workers simplify financial management by integrating income tracking, invoicing, and tax management functionalities in one place. These solutions automate financial tasks, saving time and effort for gig workers and allowing them to focus on their core work.
4. Insurance and Benefits: Gig economy financial solutions may offer access to coverage and benefits traditionally associated with full-time employment. This includes options for health insurance, retirement savings plans, and disability coverage, providing gig workers with a safety net and financial protection.

What Does the Future Hold for FinTech?

The gradual emergence and acceptance of inventive financial technology in recent years have been an exciting addition to traditional finance disciplines worldwide. Even better, American consumers have significantly adopted mobile banking apps alongside a range of other secure financial devices — a clear indication that it will continue thriving exceptionally well into the foreseeable future.

Over 82% of US adults will use a mobile banking app by 2025. This trend points to improved technological development and robust user security measures. The FinTech industry is expected to save up to $200 billion yearly by implementing these tools effectively as adoption levels grow.

The exciting future ahead is where FinTech continues to push the envelope regarding new technologies and services that ultimately make our lives more secure, convenient, and enriched. As such, it remains a sector worth watching closely over the years.