Fintech Software Development for B2B: A Comprehensive Guide

Financial software development includes designing and implementing systems that streamline and automate a company’s financial processes and increase employee productivity. Technological innovations such as Artificial Intelligence, Machine Learning, and Big Data are essential to modern financial software. Nevertheless, the financial technology industry is very dynamic and has long been moving beyond the realm of banking services.

Fintech simplifies financial transactions by consumers or businesses, making them more accessible and affordable. Fintech services are increasingly based on AI, Big Data, and Blockchain technology. Fintech tools aim to make ensuring the restrictive security of transactions easier.

Using fintech solutions allows you to improve financial transactions by eliminating unnecessary activities on each transfer side. With fintech services, you can make payments by sending money directly to a selected bank account. The recipient receives them in a few seconds without a visit to one of the major banks.

Financial technology describes new technologies that improve and automate traditional financial services. The word FinTech evolved into a shortened combination of “financial technology.” Fintech helps companies, business owners, and consumers better manage their financial transactions and daily processes. Fintech consists of specialized software and algorithms used on computers and smartphones.

FinTech has revolutionized financial institutions for millions of people, changing the way we pay for orders, take out loans, and access financial information. Many different fintech companies are offering unique services. You can find companies operating in B2B, B2C, and P2P (peer-to-peer) models. Trends toward mobile banking, increased information and data, and access decentralization create opportunities for all user groups to interact in uncommon ways.

The basic concept of fintech is years old. The first public financial technology products were credit cards, which appeared in the 1950s. They were a revolution for the time, as they eliminated carrying cash. Since then, fintech sector development has progressed, embracing more elements of traditional banking.

In 1998, PayPal was founded. At the start of the 21st century, fintech was applied only to the back-office systems of established financial institutions. Since the 2nd decade of the 21st century, the fintech space has exploded, with startups receiving billions in funding and existing financial firms acquiring new ventures. From 2018 to 2022, there was a shift in the financial world toward consumer-oriented services. It was further changed by mobile technology, social media, and data encryption, as mobile payment apps, social media payment, and blockchain network options came into use.

Distributed ledger technology, or DLT, is a key driver of innovation in the financial sector. It enables the creation and exchange of cryptocurrencies (such as Bitcoin) and digital tokens (such as NFTs) based on blockchain technology. However, emerging lower-profile technologies could have an even more significant impact on the future.

The most active areas of developing custom fintech software solutions cover several fields. One of them is the Internet of Things (IoT). IoT is implemented in sensors, enabling contactless transactions. It is also worth mentioning the use of AR and VR in fintech. Using these, you can trade stocks in an alternate reality.

Bots, or repetitive task automation programs, also known as RPA, free many employees from routine work, allowing them to focus on more creative activities in the enterprise. Another solution that makes life easier is voice payments. Smartphones with voice recognition software allow you to check your balance, transfer funds, and purchase by speaking. It is an option for people with disabilities who would like to perform daily activities on their own

If you are about to create a financial technology solution, you need to understand the product’s features and functionalities you will hand over to customers. Biometric authentication and multi-factor login will instill peace in your application’s users. Integrations with payment services and social networks are already the gold standard of today’s fintech products. Push notifications on mobile devices for each transaction and a helpful AI chatbot to answer the most asked questions can add value.

As mentioned above, the number of industries where fintech has settled down for good is growing. How does fintech work in each of them? Read short descriptions of the most popular sectors and learn how fintech innovations have improved each of them daily.

Moving money is something the fintech industry is excellent at. Sending money digitally anywhere in the world has never been easier. That’s because receiving payments via direct bank transfer is less expensive than using credit cards, and user authentication has become faster. One of the most popular fintech payment companies is PayPal. On the B2B side, payment apps help businesses pay bills, do bookkeeping, and send payroll digitally.

Lending banks often find it difficult to get an accurate picture of their applicants due to the amount of work involved and the lack of time. On the other hand, persuading borrowers to link bank accounts to receive loans and repay them can’t be attractive to every customer. Fintech streamlines risk assessment and accelerates approval processes. People can now apply for a loan from a mobile device, and new risk modeling capabilities expand credit opportunities for underbanked people.

As one of the most important financial system elements, banking services have been turned upside down by the fintech industry. Opening accounts, transfers, and payments are now quick and easy, thanks to modern technology. On the other hand, neo-banks offer flexible personal accounts, instant direct deposits, and banking products for teenagers – without traditional fees, which makes it more affordable for many people. Some banks allow you to use open banking, i.e., sharing your financial information with applications of other banks or fintech companies.

Fintech solutions help wealth management platforms and financial advisors collect account information to better investment management. Wealth management platforms use robo-advisors to help users by automatically investing their money and giving financial advice. Robo-advisors use algorithms and software to build an investment portfolio without the financial advisor’s involvement. The software automatically reinvests based on user needs and current market conditions.

Insurtech is gradually becoming an independent fintech industry. Insurance companies are relatively slow to implement modern technology, so start-ups have plenty to do. Fintech works with insurance companies, automating their processes and reaching new recipients.

Regtech, or regulatory technology, is a community of tech companies that solve challenges arising from a technology-driven economy through adherence to compliance rules to combat fraud and money laundering. Regtech uses the power of Big Data, Artificial Intelligence, and Blockchain to provide businesses with the most powerful financial services.

Blockchain can record digital financial resources’ ownership, origin, and movement. Distributed ledger technology will impact the financial industry as much as until now. First, Blockchain technology and spreading smart contracts will help make this industry more secure and efficient. With the development of Blockchain, their leading position will maintain cryptocurrencies, digital cash, and NFT.

One of the most important benefits of data analytics in the fintech industry is the personalization of services based on the collected data. By analyzing customer behavior, fintech platforms create services and products to meet each customer’s needs. A company can identify areas where people can save money or spend it differently by looking at transaction history. Data analytics is also used to mitigate risk in situations such as assessing the creditworthiness of applicants. Another way fintech companies use analytics is to identify new market opportunities.

Financial inclusion makes financial products and services available to individuals and companies without regard to their wealth. Inclusion removes barriers that exclude people from using financial services.

While barriers to inclusive finance have long been a problem, many efforts are being made to expand access to various financial services that many affluent consumers take for granted. The financial industry is inventing new ways to bring products and services to people worldwide. The growing use of fintech has provided tools to address the inaccessibility of financial services and help produce the services they need at a reasonable cost.

The main goal of fintech is to use technology to meet customers’ financial needs. The rise of fintech has forced many financial industry leaders to reimagine their core business based on data and digital platforms, new consumption models, and open architecture to promote efficiency and security. Financial software development services, serverless architecture, and Software as a Service (SaaS) have become necessary for technology players and legacy financial institutions.

Technological advances and innovation are vital boosters of fintech growth and will continue to drive disruptive business models across the financial services sector. Many traditional institutions have been pushed to think bigger as fintech companies boast their digital capabilities. Fintech means innovation, so many conventional financial institutions need to keep up with the new trends driving the industry.

Technology companies and traditional financial institutions shouldn’t be competitors. Fintech and traditional banks can offer people much more by working together. Fintech companies won’t be able to capture the market independently, while banks must choose between developing innovations and partnering with fintech startups to maintain their appeal. Customers will soon begin to expect banks to be as innovative as fintech startups. Therefore, institutions with outdated service models will have to figure out how to produce new products faster or partner with an experienced software development company that can already do so.

Do you want to become a company that meets the growing customers’ expectations? Implementing fintech applications and mobile banking is mandatory if you are going to reach new audiences faster than your competitors. To receive comprehensive assistance from consultation, through the development of fintech software to implementation and technical support, contact Scalo. We will design a fintech innovation that fits the size of your company, budget, and customer expectations.