Iflexion
Mobile Apps A Lesson from the Fintech Industry

Mobile Apps: A Lesson from the Fintech Industry

The fintech industry is on the rise. In many ways, it has outpaced classic banking, completely taking over activities traditionally reserved for banks and financial institutions. There’s a multitude of reasons for this creeping takeover.

Financial juggernauts like big banks are often slow to implement technological advances due to bureaucracy and the risk associated with innovations. Fintech companies don’t work within the same regulatory environment. Their operations aren’t regulated like those of banks, and they don’t have to report to the same governmental bodies.

But one of the biggest differentiators that propel fintech companies is the convenience that they offer compared to regular financial market players. Take a look at Uber and Lyft. These apps offer an alternative to traditional cab services, and this runs in parallel to what fintech companies are doing to banking.

The primary medium for fintech companies and their apps is the mobile environment. A lot of them even start out as mobile-first solutions.

The Pulse of Fintech Q4 2016_ Global analysis of investment in fintech

That’s why fintech apps are usually a cut above any other apps when it comes down to functionality and convenience. They’re leading the charge when it comes to rediscovering new growth opportunities within a confined space of a 5-inch screen. Other industries could learn a thing or two from fintech leaders and their stab at mobile app development, engagement, as well as UX and UI. Let’s take a look at a couple of distinctive features of fintech apps and learn how they could be transferred into apps for any other niche.

Simplification

Apps that win over customers usually make their lives easier. If your app can simplify an aspect of a person’s daily routine – you’re on the right track.

Steve Jobs - simplicity

For example, take a look at Lemonade – an app that simplifies the process of purchasing an insurance policy for urban dwellers. Or Simple Bank, which is a mobile-first fintech alternative to traditional banking. They don’t charge you any fees. None. At all.

This goes for other financial services, like stock trading. If you have ever tried to get into it, you probably know how complicated and tiresome the process is. With apps like Robinhood, stock trading has never been more accessible and straightforward.

Top 10 fintech apps of 2016 by Forbes and their value prop

Another great example is ClarityMoney – a budgeting app that managed to acquire 100,000 users in less than four months by delivering on the promise of simplifying money management. Even their CEO Adam Dell admitted that the app is successful simply because “there’s nothing like this on the market.”

And this is another bonus of simplifying something – if your app is good at it, then it’s probably pretty unique in its own right, which instantly becomes a differentiator that sets it apart from the competition.

The bottom line is: if you want to create an app that mimics functionality that’s already available in other applications, then you can’t expect it to transcend traditional success expectations. Leading mobile apps discover and innovate, and that’s why they’re ahead of the curve.

Now, you can’t expect every app to be revolutionary and game-changing for its niche. But when you’re in the process of planning its functionality, keep asking yourself a simple question. “How can we make this easier for the user?” All of your know-how will stem from your answers to this question.

UX

This very distinctive trait of fintech apps derives from the ‘simplification’ philosophy that we described above. When you’re creating a more accessible way of doing finance, design and UI play a major role in the overall user experience. And yes, this is probably one of the most regurgitated tips out there. But somehow many app developers still fail to follow this requirement. Yes, there are design guidelines both for iOS and Android, containing a variety of detailed instructions on how to make an app that’s going to blend in pretty well with the ecosystem.

However, while these guidelines are handy for apps that want to ‘fit in,’ they can’t possibly explain what a polished and fulfilling user experience should be, especially if you’re developing a unique app with just as unique functionality. A small thing like a weirdly placed button could screw up the whole package.

Sure, you can test the app in-house and pass it around to your employees, but they’re not your target audience. An app engineer is not the best tester for an app that’s primarily designed for, let’s say, landscapers. If you keep an eye on Silicon Valley, then you know what we’re talking about. However, there are alternatives. You can always crowdsource your app testing through a third-party vendor to have your app tested by dozens or maybe even hundreds of potential users. However if you’re outsourcing your work to a professional app development team, they usually take care of UI testing. So discuss these details upfront when looking for a development partner.

Eye Candy

User experience is heavily intertwined with app design. Sometimes, the mere fact that an app looks and feels premium changes your whole experience. Let’s take a look at an elementary example below.

App comparison

Here you can see two apps being offered by two separate banks. One of them is a big international bank, and the other one is a smaller regional bank. Can you guess which one is which? If you thought that the screenshot on the left belongs to an app from a small bank, you were wrong.

The app on the left is from HSBC, and the one on the right is from Field & Main Bank. But it’s hard to make the right choice when the app from a bigger bank includes weird design/UI options, like the ‘Paym’ shortcut. Its role is quite hard to identify from the screenshot, despite it being the name of the bank’s proprietary money transfer tool that’s central to its mobile banking services. The app colors don’t reflect HSBC and its branding, while Field & Main’s app does a good job of conveying that. For the latter, the transition from the site to the app is easy, while with HSBC it’s not.

Change in designer to engineer ratio in tech companies

Data source: techcrunch.com

There are probably hundreds of fintech apps in each niche, and design is crucial to the experience of each of them. So much so that there are even separate web design agencies that focus on fintech and banking apps.

Therefore, if you’re creating an app that has elements of financial services, it’s advisable to check out apps that are already thriving on the scene and take inspiration from their design solutions.

Security

Personal finance is a topic that requires a lot of privacy. Fintech apps depend on the security infrastructure to exist, as even the smallest breach could cost them their user base, investors, and any growth opportunities.

There are many growing cybersecurity trends within the fintech industry, which show the emphasis these companies put on the digital security of their customers. And this topic is relevant to practically any other mobile app niche since most of the apps have some sort of monetization or transactional functionality. These options mean that at some point someone might want to steal the payment information transferred through the app or get a hold of personal information for various purposes, from just selling this information to using it as a tool for identity theft crimes.

State of mobile app security

Data source: 1, 2, 3

Blockchain

While most of us know what Bitcoin is, not many of us understand the technology behind it. Blockchain is the underlying technology that powers Bitcoin and other cryptocurrencies. The overall concept of blockchain is pretty complicated, but the general idea that allows it to be secure is that to get encrypted information, one has to hack into all of the blocks in the chain simultaneously.

This requires an economically unjustifiable quantity of processing power. And this is only after you’re able to get through the encryption, which is hardly a walk in the park. At this point, blockchain technology is virtually impenetrable. Not to mention that it’s still a buzzword, so you might get some extra marketing points on top of securing your app.

User Data

Many apps store data on their users’ devices. This may pose many security threats, like the phone being compromised through other apps. If your app needs to store data on the phone, make sure that it’s deleted after a period of time. Fintech apps take it a step further. Like Apple Pay, that doesn’t store transactional data on the device at all.

Conclusion

Fintech is one of the fastest growing niches, which uses mobile apps as the primary driver of its growth. Given the sheer amount of competition that wants to take advantage of the developing opportunities, companies tend to place a lot of emphasis on usability, security and the general appearance of their apps. This helps them to differentiate themselves from the competitors and traditional banks that are starting to realize the threat posed by fintech companies.

This niche is where innovation in many app development techniques and methods take place. So if you want to develop a successful application that your users will love and appreciate, using the experience of fintech companies might help you understand the underlying factors that successful apps inherit. Get acquainted with them and apply this knowledge to your future app as early in the development process as possible.

If you’re looking for an experienced app development partner that understands these factors, then Iflexion is right for you. Our stellar team of developers has extensive experience developing apps for a wide variety of businesses.

What other traits of fintech apps could be applied to other mobile development niches? Let us know in the comments below!

Darya Shmat

Darya has spent over a decade in the banking industry, working on various projects and in multiple capacities since 2003. In the early 2000s, a lot of the processes were manual, and no one had even conceptualized mobile payments and other technologies that are prevalent in the niche today. Darya witnessed the technological growth of the industry from within, as banks digitized and embraced mobile technology. Over the span of her career she has participated in a variety of projects that deal with operations automation, analysis, beta testing, auditing, efficiency evaluation, and other modernization efforts undertaken by banking institutions. She knows firsthand about the technological transformation that the banking industry is steadily going through. Today, Darya works as a business development representative at Iflexion and expertly applies her practical experience to help our banking and financial industry clients find the right development or QA solution.

  • Kate Pioryshkina

    Cybersecurity is and will be a problem as long as there are accounts to hack. 2FA (2 feature identification) will give way to MFA (multi-feature identification). This will include biometrics as at least one of the authentification options. One would expect that something as personal as an iris scan would be good enough to render your phone secure. But, as Samsung, who offer this option to unlock your phone discovered, it can be hacked. Fiendish hacker Starbug used a combination of infra-red photography and a contact lens to fool a phone, and has also managed to hack fingerprint security, sowing that using a single biometric is just not good enough for the determined hacker. However, if the biometric is combined with other authentification, like a password and another biometric, such as speech recognition, it does offer more security.A new branch of biometrics is behavioral biometrics, which examines personal behavior, like typing patterns on a keyboard, choice of words and phrases, to identify an individual. This is a special branch of fintech that will no doubt become a growth industry, like firm Biocatch. In fact, there are fintech companies that help other fintech companies prevent fraud, like Feedzai.

  • Masha Marinina

    One of the things you did not mention in this excellent article is the ability of the customer to personalize their apps. Not all fintechs do this, but Backbase, a digital platform company provides both the company who buys their product and the customer who uses the app the ability to change the appearance of the app. The company can do this to reach different market segments. The customer can select his favorite transactions and change things like buttons and colors, up to a point, because the company branding must stay intact. This helps the customer bond with “his” app, which has a unique “flavor” and is different from that of his friend’s version.
    Looking at the comment on security, the app should be able to give the customer a range of security features to choose to create his own access identity, for instance I have a friend who has corneal problems, which makes iris scans impractical.