In the United Kingdom alone, fintech investments topped $37.3 billion in 2021 – up sevenfold from 2020. And whilst London has remained a key driver in the UK’s fintech success story, a third of all fintech startups are now outside of the capital, with fintech success stories also being told in Scotland as brands increasingly look for new ways to attract clients. Even before the COVID-19 pandemic began, changing consumer habits led to market entrants taking advantage of new technologies to get ahead. From digital banking and payment mechanisms to insurance technology, data, compliance, and financial crime, there are so many opportunities for businesses in a wide range of sectors across fintech. Utilising some of the app development trends we’ve outlined below could ensure your business can benefit.
Gone are the days of card readers and security answers like “What was the first street you grew up in?” – modern fintech brands are taking advantage of biometric technologies when building their software. Face ID on iPhone, for example, allows financial institutions to verify the legitimacy of payments, reducing the likelihood of financial fraud and improving the user experience. The best part is that app developers can supplement their own authentication scheme with biometric authentication with Face ID on iOS and Face Authentication HIDL on Android, with security-compliant implementations designed to save time and reduce effort.
Research has found that 81% of fintech consumers actively seek out brands that deliver an instant identity verification or authentication experience – offering biometrics as part of your app is no longer a nice to have but a necessity in order to build trust and remain competitive.
Biometrics are only the only way to offer enhanced security to your customers, of course. Many developers are taking advantage of two-factor authentication to add an additional layer of security when logging into an account or making a purchase, and changes to legislation which came into effect this year mean retailers must verify who a customer is claiming to be when buying online, with customers having to approve payments on their banking apps.
In today’s always-online, always-available world, sending payments via BACs transfer or Direct Debit just doesn’t work for modern consumers. Immediate, responsive experiences are an essential part of fintech’s success story: there’s a reason why banks like Monzo and Starling have attracted tens of millions of customers over the past five years, and that’s because they’re at the cutting-edge of innovation and offer a product that’s far ahead of their traditional rivals. Faster Payments form part of this innovation, offering a quicker method of sending money than using BACs. Payments sent via BACs are typically processed on a three working days cycle, whereas Faster Payments are almost immediate and available 24 hours a day, seven days a week. Whether customers are sending money to friends and family or businesses like yours, Faster Payments reduces the chance of delay, frustration, and panic, thus reducing the number of enquires you’ll receive and increasing satisfaction.
Although Faster Payments is exclusive to the UK, around the world, governments and banking institutions are offering their own similar schemes, and it’s thought that they’ll process half a trillion real-time transactions over the next five years, growing 40% between 2020 and 2024. Fintechs can access Faster Payments as Directly Connected Settling Participants, Directly Connected Non-Settling Participants, or via Indirect Agencies. You can find out more about some of the entry routes for fintech brands on the FF News website.
Escrow payments certainly aren’t new, but fintech companies are changing the way they’re organised and managed to increase efficiency and lower costs. Digital escrow agents serve as the middleman between buyer and seller. First, the buyer will pay into escrow, and they don’t need to know who the seller is. The seller can then see that the money has been paid on their behalf, and can deliver a particular good or service to the buyer. Once the buyer then certifies that the item or service has been delivered, the buyer’s funds are released to the seller. Fintech brands are increasingly using escrow wallets for digital services like non-fungible tokens (NFTs) and cryptocurrency, but they can be used in virtually all buying/selling situations, such as buying a car, selling a premium domain name, or making an investment in a company anonymously.
Fully mobile banking
In today’s fast-moving world, many consumers no longer have time to visit their bank branch in person to take care of their payments and expect to be able to offer the same services they could receive in person online. From being able to pay in cheques virtually by taking a photograph to arranging virtual video calls with bank managers and mortgage brokers, there are lots of ways that financial institutions are tearing up the rulebook. Sure, not all of them work, but it’s good to see that brands are experimenting with new ideas to replace traditional banking services, and as consumers embrace such ideas, exciting possibilities await.
On the same note, data visualisation is more important than ever. Today’s consumers have access to more free tools than ever before to manage money, investments, and pensions, so as a fintech brand, it’s vital that you break down your customers’ data in a way that’s easy to digest. Tools that can be used to visualize financial reports, income and savings can work to empower consumers and businesses to make better decisions – and, of course, stay loyal to your brand. Offering up analytics on a plate also reduces customer response times; as an accountant, for example, if your clients can break down their profit and loss without needing you to be involved, your firm will be more efficient without impacting customer satisfaction.
It goes without saying that app developers must put their users first when designing software and interfaces. Fintech applications shouldn’t look intimidating: even the most complex tasks like applying for a mortgage or investing in stocks should be made as straightforward as possible. Fintech apps must be visually pleasing and many brands are using animations, attractive artwork, and user-friendly icons to make interfaces both welcoming and attractive.
On the same note, gamification can be used in fintech app development to incentivise users to interact with your brand and become more mindful of their money. Of course, you must be thoughtful and compliant when developing gamified content, but adding in some fun elements can make financial management less stressful and it can serve to increase loyalty.
If you’re looking for support in developing a fintech app for your business, the team at Zudu could help you. Click here to find out more or give us a call on 01382 690080 today.