What is Fintech?
Fintech word is the combination of two words financial and technology. Fintech describes the use of technology to deliver financial services and product to consumers. It could be in the areas of banking, investing, insurance, and anything that relates to finance.
Technology has always changed the financial industry and its uses. Now the use of the financial product has accelerated greatly because of technology. Nowadays the use of the internet with devices like smartphones and tablets has increased that help to develop the financial industry.
Examples of Fintech
Fintech is changing the world of finance in various ways. For example, you can now open a new bank account without physically visiting a bank. You can now monitor your account by linking the account to your smartphone. You can even use your smartphone like “digital wallet” and use it to pay for things using money in your account.
The insurance company and investment industries are also affected by fintech but in a positive manner. Car insurance providers now sell “telematics-based” insurance, where your driving is monitored using data that is collected by your smartphone or via “black box” fitted in your car.
This data can then be used to determine the cost to pay for your insurance policy. It may be possible in future to buy insurance on a short-term or “pay as you go” basis.
Fintech products tend to be delivered online and so it is easier and quicker for consumers to access
Consumers get benefit from a greater choice of products and services because they can be bought remotely, regardless of location.
Fintech companies may be able to offer cheaper deals to consumers because they do not need to invest money in a physical infrastructure like a branch network.
More personalized products
Technology allows fintech companies to collect and store more information on customers so they may be able to offer consumers more personalized products or services.
Making a rash decision
Financial products that are bought instantly online without ever meeting anyone face-to-face may help the consumer to make quick, uninformed decisions.
Because of online purchasing of financial products is increased technology-based risks. For examples, your personal data could be misused by criminal or you could fall victim to cybercrime.
Technology increases choice and access for most consumers but it can not include those who don’t know how to use internet or devices like computers, smartphones, and tablets.
Things to Consider Before Launching a Fintech Product
Consider the target country
Fintech aims to replace for traditional financial companies by delivering more efficient methods of engaging in financial activities. All financial bodies and services, except cryptocurrencies, are regulated by the government. This act of government makes it difficult to introduce new approaches to providing financial services. Whether they are from investments, online banking or any other financial sectors unless they are lawful.
Study the regulations of your selected country before launching a fintech startup. You cannot predict all the challenges along the way, but by complying with the existing rules you can minimize losses. If you do not accept the rules of the government then they may levy fines or ban you from doing fintech business.
Find an experienced team in developing the fintech products
Experienced people are the successful key to designing good products. Working in fintech, not an easy work because the industry in full of jargon whereby most IT specialist is unfamiliar with.
There should be somebody finance-literate in each fintech business to make sure that the technical team understands everything right. You can save a lot of money by hiring an experienced fintech product engineers and they can also speed up the process.
They take less time to tell the team about Bank interest rate. It does not mean that each engineer has to have a degree in finance, but the tech lead or senior engineer should be familiarized.
Choose the technology
Fintech can change ability quickly, provide additional services adapt to the customer’s needs and offer better solutions. These are the advantage of fintech over the traditional financial institution.
To find their market fit and be able to compete with traditional financial institutions, your start-up ideas must be implemented in a few months. Apart from this, fintech is full of additional services, therefore, your system has to be flexible.
If you are finding a technical partner for a fintech start-up then I assume that you are not familiar with the technology required actually build it.
The main point here is that you trust the experts when choosing the technology. The choice depends on multiple factors, one of them being the business goal that you want to achieve with your product.
Another one is they know the restrictions associated with using a particular technology. If a new law comes out by which your entire project will be shut down then one outcome of the right choice is to minimized risks.
Consider possible integration with third parties
One disadvantage of fintech is that it depends on traditional institutions. You will need lots of integration with third-party services to improve the user experience with financial products. The word integration has a different meaning in this case.
When using Molo (another online mortgage system we have been working with) users can choose houses they like and gave a mortgage. When they want to give a mortgage, the system sends a request to organizations that can identify the users’data. And another request send by the system to verify property and identity verification. Because of all these integrations, it is possible to call Molo a fully digital mortgage provider and enable customers to go through the whole mortgage process online.
Think about both roles
If applying for a loan there are two participating roles somebody gets a loan, and another gives it. Same in insurance, there is an insurer and an insured. The same applies in case of fintech.
The technology should suit both for the end-customers as well as the service provider as well.
For instance, many fintech services give an access to their product to credit experts or financial advisors. In this way, they comprise both b2b and b2c segments- working with end users (people who want to invest and need help) and service providers (financial advisors who suggest best options for investments).
Although in this case, fintech app development process includes the formation of different interface and functionality for each party because each performs actions peculiar to their role.
Basically, you need to consider the possibility of b2b interactions when choosing a technical solution and building a business model.
If you consider those things which are described above before launching a fintech product then you will avoid lots of mistakes. But remember that fintech has to deliver the product at the right time, in the right place and to the right person.
I suggest you choose Python over another programming language to ensure a fast MVP that will bring you closer to your goal.