Older technologies may seem hard to modernize, but if you want to remain competitive, it’s something you have to do. The good news is that with the right tools and a modern approach, you can successfully modernize your banking legacy systems without breaking anything else in the process. Here are some helpful tips on how to accomplish this feat.

What is a Legacy System in Banking?

In IT, a legacy system is an older computer system or application program that continues operating long after newer systems have been introduced. Newer systems are sometimes described as greenfield or brownfield systems, depending on whether they replace a working system or upgrade an older one.

The term legacy comes from legacy code — the term for obsolete programs that continue operating as-is. As a rule of thumb, legacy code is 10 years old or more; most often it refers to internal accounting applications.

In the banking sector, legacy systems include many of today’s most popular banking apps, from online banking portals to mobile and desktop Internet-banking apps.

Many of these systems have become unsustainable due to increasing demand for new features and improved user experiences, making it difficult for financial institutions (FIs) to service customers with ease and efficiency. That’s why it’s business-critical to modernize banking legacy systems.

Why Do Legacy Systems in Banking Need Modernization?

Customer demands. Among all, legacy banking systems make it hard to provide high-quality service to your clients. Mobile payments, instant interactions, secure data storage and personalized banking are just a few examples of what today’s consumers demand from their banks. Frequently, legacy software simply cannot keep up with these demands.

Maintenance cost. Supporting legacy systems in their current state is time-consuming and costly. Frequently, companies turn to expert help for that. However, several updates can go a long way toward improving performance — even increasing speed and stability — without incurring an enormous cost. Modern technologies can even automate your strategic decisions without the need to maintain the separate department of data scientists to manage them.

Need for innovation.To remain competitive, sooner or later, each bank faces the need to update their legacy software. A modernized banking system can improve security and customer satisfaction while also reducing operating costs and risk exposure, which means solving numerous internal problems and serving customers better.

Main Benefits of Modernizing Banking Legacy Systems

1. Risk management. The newer technologies reduce the risk of regulatory compliance through internal control.
2. Money. Modernization can drive down operating and delivery costs and improve efficiency of staff through technology.
3. Security. Cloud technologies introduce scalability and flexibility while maintaining the safety of your strategic assets.
4. Speed. With modernized legacy systems in banking, you can get access to digital capabilities that accelerate the pace of innovation in your organization;
5. Customer service. The improved areas include service levels and customer satisfaction.
6. Better use of talent. Instead of wasting your employees’ time on supporting older systems, you save their time on more strategic tasks through modernization.
7. Long-run advantage. Although investing in modernization needs extra money, their maintenance and operation will be cheaper in the long run.

Best Practices and Tips for Legacy Software Modernization

When it comes time for a financial institution to consider updating a legacy system, many questions arise: How will we finance modernization? What is our exit strategy from our existing environment? Is our data at risk during implementation? When should we start planning for a project like modernization?

Here is a collection of working approaches to answering these questions about modernizing legacy systems in banking.

Take Time on Preparation

First, understand how automation fits into your overall operations. While automating individual processes might seem like a good idea, it may not integrate well with other parts of your business. Thus, make sure you set clear goals for every automation project and create an implementation strategy that will work for you and last over time.

To prepare for modernization, you need a plan that ensures process efficiency and takes advantage of current technology. You also need a realistic budget. If your bank is currently using an old application that’s missing features and needs updating or repairing, you don’t want that updated version causing more problems than it solves. It should be a strategic part of your business’s growth plan.

To get started, gather ideas on how customers interact with your bank — both in person and online — and jot down new processes you could introduce. For example, if customers are always waiting in line at one branch location on Thursdays after lunch, maybe they would appreciate a mobile app so they can do their banking from anywhere, anytime. After collecting all these ideas, you can start searching for a reliable tech provider who can help you with the needed modernization.

Pick Your Tech Partner Wisely

While modernizing legacy systems in banking, it’s important to find a reliable tech vendor who can implement your ideas into reality. Be prepared for lots of questions about your system, and make sure you ask lots of questions, too—it’s critical to understand just how complex and difficult your project will be in advance.

Also, check the portfolio and technical capabilities of your future partner. It’s best to research ahead of time what kind of projects they’ve worked on in their past. The more relevant experience they have, the better off you’ll be..

Deloitte experts also recommend focusing on business impact and total cost of ownership, not just technology features and purchase price. While talking to an IT company, remember that the best way to ensure that your legacy modernization efforts are successful is by focusing on business value — not just because it’s easier to measure, but also because it forces you to ask tougher questions. Take an active role in decision-making so that you end up prioritizing your project wisely and aligning it to your financial goals.

Guiding Principles to Updating Legacy Systems in Banking

While working on the project, stick to these 6 key principles from the McKinsey list that contribute to successful modernization of legacy systems in banks:

1. Establish a flexible data platform. Don’t try to bring everything into a single new data platform: you will get bogged down in complexity and leave out key sources of high-quality data. Instead, start with those golden sources that provide deep insight into customer behavior or performance, such as credit card transactions or mobile phone records, and work on creating intuitive interfaces for these operations.
2. Use microservices: Focus new development on decentralization, changing behavior, and building new applications that are tailored to how today’s customers want to interact with their banks. Microservices are a good fit for this aim.
3. Categorize capabilities for customer journeys: Banks should identify key customer processes and map out their specific requirements for seamless digital experiences. The first step is identifying which functions are essential at each stage of a journey — and which are not. It may be tempting to use new technology as an opportunity to provide every possible service; but banking leaders should be aware that they could create distracting complexity if they don’t maintain simplicity at every step.
4. Prioritize integration: Rather than simplifying systems, leading banks use a strategy of integrating with modern tools while keeping legacy core intact. Then, they start slowly moving core processes to their new environment over time.
5. Rely on SaaS for non-critical capabilities: While many enterprises still rely on internal resources for service delivery, SaaS has proven especially effective for streamlining business processes. By moving applications like HR, procurement and other back-office systems (such as accounting) from onsite servers to a cloud platform, IT teams can focus their efforts on upgrading their mission-critical software.
6. Think globally, act locally: Global platforms are good but have their limits. If a bank takes an overly broad approach, it may build barriers for future innovation and harm customer outcomes by forcing them onto one global platform. Instead, focus on creating shared data models and core services that can be extended to support business-critical activities while remaining agile enough to accommodate alternative paths.

How Hard is It to Modernize My Legacy Banking System?

Initially, the idea of modernizing legacy systems was too unrealistic for many banks. The only option available was total replacement, which required tremendous effort and heavy investments.

But things have changed these days. Intellectsoft has already delivered several examples of legacy systems in banking that didn’t require heavy changes but modernized the outdated parts. We use the recent technology advances and approaches from our set of financial software development services:

• Online banking. We create new experiences for customers through custom online banking platforms, mobile apps, security technologies, UI/UX, and system integration.
• Digital wallet. We enable P2P payments, facilitate digital transfers, and introduce in-app currency with enhanced security and tailored promotions.
• Trading and securities. Services for mobile stock tracking include digital brokerage, blockchain ledgers, and applying AI and automation.
• AI and ML. We have vast experience of working with Fintech trends for mobile app development and can introduce predictive and recommendation systems, Natural Language Processing, computer vision, and data mining and analytics into your bank.
• Robotic Process Automation (RPA). The technology improves productivity and provides intelligent automation through account reconciliation, automated mailers, monthly account reviews, and regulatory reporting.
• Blockchain. We apply the technology behind cryptocurrencies to increase security, cut transaction fee costs, and introduce automation. Our services in this area include smart contracts, identity management, ICO launch support, and cryptocurrency operations.

Ready to start the modernization? Talk to our experts to discuss the best approach to updating your legacy systems and start improving your banking today!

The post How and Why to Modernize Legacy Systems in Banking appeared first on Intellectsoft Blog.

According to the latest research, the global financial services market is expected to reach $26.5 trillion in 2022 at a CAGR of 6% due to the fact that the pandemic starts winding down and companies are rearranging their operations.

The evolution in customer behavior, remote working, and the emergence of new needs encourage the financial technology industry to embrace a wave of changes and innovations to stay relevant.

There is a list of the top fintech industry trends that center around 15 technologies with the most potential to transform the market in 2022:

1. Open banking
2. Big Data and Analytics
3. RegTech (Regulatory Technology)
4. Blockchain
5. Virtual Cards
6. Cloud Computing
7. Defi (Decentralized Finance)
8. Cybersecurity
9. Artificial Intelligence
10. Machine Learning
11. The Internet of Things
12. Robotic Process Automation
13. Neobank
14. Biometric Security Systems
15. Voice Technologies

15 Fintech Trends for 2022

1. Open Banking

The open banking concept of using open API technology drastically changes the customer’s experience and boosts value to financial service. 3.9 million people use open banking to manage their finances but the number of users is increasingly growing and is expected to reach 63.8 million by 2024 as this financial technology becomes more popular.

The biggest convenience is that users can accumulate and manage all of their account data, operations, transactions, expenses on one platform. Another advantage is that an application helps them monitor costs and keep to a budget, which contributes to increased savings.

The benefit of one of the hottest trends in fintech at the moment for the financial companies is that by gaining access to this data, they can conduct a deeper analysis of the financial habits and behavior and provide users with more customized products and personalized offers that best meet their needs. Additionally, the open banking concept brings significant profitability, in particular, increasing customer engagement and retention.

2. Big Data and Analytics 

In 2022, businesses continue to see big data and analytics as one of the top three fintech trends. Most organizations are trying to capture all possible data streaming inside and apply all kinds of analytics to it.

There are numerous positive outcomes achievable, for example:

• Faster decision making: various analysis tools allow making instantaneous decisions based on immediate data streams
• Cost reduction: it helps to find better ways of doing business by scrutinizing individual aspects of everyday operations
• Customer satisfaction: having the opportunity to analyze the customers’ behavior over time, organizations get a chance to develop new products to meet their needs more effectively

 3. RegTech (Regulatory Technology) 

Combining a subset of financial technologies such as ML, natural language processing, predictive analytics, the RegTech phenomenon is one of the key players in the rapidly evolving fintech world. The purpose of it is to help both financial companies and banks to comply with all regulatory requirements more efficiently and much faster, reducing the level of costs and risks.

Even though Regtech is often considered a technology in the finance industry, it is applicable in a range of different fields. According to recent reports, this booming industry is predicted to bring in $21.73 billion by 2027.

4. Blockchain 

Being the most significant innovation in the financial technology industry, Blockchain has continued to influence the banking industry by ensuring end-to-end data security, preventing cyber-attacks, providing fast transactions, and reduction in operational costs.

At the end of 2021, the global cryptocurrency market cap reached $3 trillion, according to a recent study. However, the potential of blockchain isn’t limited to cryptocurrencies, and this financial technology could provide fertile ground for future fintech developments offering new ways of handling information.

5. Virtual Cards 

As cybersecurity attacks are on the rise, it has become necessary to develop a new way to protect account data when making online payments. That’s how virtual 16-digit cards, which are usually valid for a short period, emerged as an alternative payment method that aims to help users protect their sensitive information.

Virtual cards are safe, sustainable, and expire as soon as you complete the transaction. Besides, they might be used as a backup payment method if a standard card gets declined or lost. The rapid advancement in financial technology led to the increased use of virtual cards for businesses as they are easy to receive and use.

The total value of virtual card transactions is forecast to reach $6.8 trillion by 2026.

6. Cloud Computing

In the world significantly impacted by the COVID-19 pandemic, even the most traditional organizations have to find ways to interact with their customers digitally.

More importantly, they need to build a system allowing them to access, manage, analyze, and control massive data storage in a reality where managers and analysts cannot physically reach their offices.

As Americans were forced to live under official social distancing guidelines, a vital need to move organizations to the cloud as quickly as possible emerged. Leaders should undertake a few essential steps to achieve a smooth transition:

• Providing sufficient funding to ensure the employment of all the required technology
• Integrating the cloud to the business model to reflect its widespread and long-lasting impact
• Attracting well-qualified engineers and IT-specialists to support the technology’s everyday performance effectively and to avoid any disruptions

7. DeFi

The cryptocurrencies occupied headlines quite often in the previous year, as their underlying technology holds tremendous potential. According to recent reports, crypto borrowing was the largest single segment of DeFi in 2021.

Blockchain opens up a series of opportunities for protecting any kind of data, not just financial transactions. For instance, payment reconciliation, identity protection, and data access are significantly benefited through the use of this technology.

Caption 1. Primary challenges when implementing blockchain technology

One of the new fintech trends, decentralized finance or DeFi, is about creating autonomous protocols (set of rules) for money to operate; no trusted party is needed. The hottest topic is lending, namely yield farming.

8. Cybersecurity

With the COVID-19 world facing the rise of online activities, cybercrime constantly expands its endeavors.

Since the beginning of the pandemic, cloud-based and phishing attempts have increased substantially. According to the CPR, companies around the world witnessed a 40% growth in cyber-attacks in 2021. Additionally, it is projected that the number of cyber-attacks will double by 2025.

9. Artificial Intelligence

Organizations are paying more and more attention to Artificial Intelligence power. AI has been named the most disruptive technology by managers and IT leaders worldwide, exceeding big data and analytics.

The latest statistics show that by 2025 about 95% of all customer interactions worldwide will be fully powered by AI, and the industry is forecasted to reach $31 billion in revenue.

10. The Internet of Things

The giant ecosystem of the Internet of Things is multiplying. IoT devices are everywhere, from voice assistants to slow cookers.

The IoT market is expected to expand to $1386.06 billion by 2026, having systems integration and data center and analytics as its biggest segments.

Caption 4. Reasons for technology usage

Caption 2. Reasons for technology usage

11. Machine Learning

Machine learning is often seen as synonymous with artificial intelligence. It is a subset of AI, making the former perform faster by reinforcing its learning abilities.

These make machine learning a key component of AI, a fact confirmed by the latest machine learning statistics.

The machine learning market has been rapidly growing. The most significant segment of this market is the deep learning software set to reach about $1 billion by 2025.

Current machine learning market research has shown that the market for AI-powered hardware and assistants is expected to grow at a high pace.

12. Robotic Process Automation

The latest reports show that about 23% of factory jobs will be automated by 2025. The range of collaborative applications offered by robot manufacturers continues to expand.

Currently, shared workspace applications are most common: robots and people operate together, completing jobs simultaneously. They enable this by voice, gesture, and recognition of intent from human motion.

Caption 3. Service robots for personal/domestic use

13. Neobank 

Neobank is another great example of the fintech developments that deserve your attention. Due to quarantine restrictions, companies are actively switching business processes to online mode, and banks are no exception to this process.

Banks that operate exclusively online are gaining more and more popularity and are innovative competitors of conventional banking institutions. According to Statista, the digital-only banks’ sector is projected to grow and reach a market size of $722.6 billion by 2028.

Neobanking technology in the finance industry offers a plethora of plans and options for customers. This includes a variety of services such as international remittance, fee-free transaction operations, obtaining loans, etc.

14. Biometric Security Systems

It is vital for the fintech industry organizations to take all possible security measures. And biometrics is the best way to lift security to the next level, ensuring users’ confidence that their information is protected.

The world biometrics market is expected to reach $45.96 billion by 2024 as the partnerships between tech and biometric companies will be growing.

The range of solutions is set to grow bigger to utilize such biometric data as fingerprint, face, iris, vein, voice, DNA, palm prints, hand geometry, signature, and several behavioral features.

15. Voice Technologies 

Chat-like platforms keep arriving for everything customers need to deal with on an everyday basis. Voice assistants are being developed to provide support for various issues. Voice technologies have evolved to tell the weather forecast or stream sports and improve customer service in the banking sector.

Voice technologies are divided into two main groups: the phonetic recognition of different words and the interpretation of the actual language as spoken, also known as natural language processing (NLP).

The global voice technology market will rise to $20.9 billion by 2026.

Wrapping Up

As we can see from above, the banking industry trends and technology trends in financial services are here to optimize the working processes by saving money, eliminating all human errors during operation, securing personal information, and delivering satisfying and safe customer experiences.

Feel free to contact Intellectsoft experts to find out more about the key fintech trends for 2022 and the wide array of financial software development services we offer. Our experienced specialists provide clients with business solutions that will improve team performance and business efficiency.

The post Disruptive FinTech: 15 Technology Trends to Watch in 2022 appeared first on Intellectsoft Blog.

However, according to Deloitte’s research, the return on equity is going to return back to normal to 10.4% in 2025.

Additionally, the recovery in the financial sector is expected to result in loans and potential net interest margin growth. Therefore, the prospects for the next few years are quite favorable even though the pandemic isn’t over.

In the banking sector, digital transformations have continued to gather momentum by developing top-notch software and revising new approaches. While there are many aspects of digitalization, the combination of legacy lending systems and rapid technological advancements have generated strong demand for alternative credit scoring.

In this article, you will discover how scoring solutions including AI and ML can be used to extract meaningful insights from non-traditional data sources such as social media sentiment, app usage, utility or phone bill payments, and public records to achieve precision in solvency evaluation.

Moreover, we’ll describe the key advantages of the credit scoring software solutions and explain how they will take your business to the next level.

What Is Traditional Credit Scoring, and Why It Can No Longer Perform as Effectively as in the Past?

Traditional credit scoring is a process associated with the creditworthiness evaluation that is conducted before concluding credit agreements. Once it’s done, a loan applicant receives an individual credit score, which is presented as a 3-digit number.

The institutions use different ranges of scores, but the most popular is a 300-to-900 credit score scale. Generally, a credit score of high 600s and up to the mid-700s is considered good. Building and maintaining a good credit score is very significant as it can help customers get approved for lower interest rates and attractive terms.

Although the credit bureaus use different mathematical algorithms while calculating credit scores, there are the most important characteristics that are factored in when customers apply for credit:

1. The first thing prospective debtors need to pay attention to before the lodging of an application is the payment history as it defines how consistently payments are made on time.
2. The second most important factor that has an impact on credit scores is the level of outstanding debt a potential borrower owes. Experts recommend sticking to the 30% credit utilization rule, otherwise, it can actually hurt the credit score.
3. Representing both active and closed credit accounts, a long credit history helps the lender to gauge the customer as a borrower.
4. Maintaining a mix of revolving and installment credit indicates financial reliability to lenders.

With this traditional model, as we have seen, the procedure for credit score assessment involves quantitative and qualitative analysis. As a result, the possibility of unpleasant future events such as defaults and the risk of human intervention is eliminated.

Even though there are numerous benefits including objective measurement of credit risk and time-saving features, credit scoring results are not quite fair as the information, which is derived from credit bureaus, is insufficient to conduct a meaningful review; therefore, conventional methods of credit scoring can’t give an accurate picture of creditworthiness.

What Is Alternative Credit Scoring & Why Is It So Popular?

The methods used for credit scoring are evolving from traditional statistical techniques to innovative methods as the world is changing and a wide variety of new data sources are being created.

While lending institutions rely upon credit reports and scoring to decide whether an applicant can afford to repay debts, alternative credit scoring refers to the use of current and accurate data for creditworthiness assessment, such as a digital footprint, which is the online activity information about a particular person.

The use of alternative data sources and innovative algorithms in credit scoring may help enable greater access to the unbanked category and first-time debtors, thereby providing them with credit and an opportunity to start earning scores.

The alternative data that generate more accurate credit scores include the following sources:

1. The better the payment history with utility providers, the easier it will be for a borrower to prove their ability to repay loans.
2. Good rental payment reports can drastically beef up an applicant’s reputation and credit score, and therefore access finance at better rates. And it is sometimes necessary for rent payments to be verified by the landlord.
3. Asset ownership and steady employment have a beneficial effect on creditworthiness.
4. POS and transaction data reports can demonstrate a consumer’s spending behavior and the way they handle all aspects of finances.
5. Self-reporting personal checking and savings information to the lenders might open up more opportunities to reach the financial goals.
6. Analyzing mobile phone data including payments, subscriptions, income level, consumption and top-up pattern, social media information might bulk up the consumer’s credit score.

How Can AI and ML Enhance Credit Risk Assessment?

Being a technological innovator for the foreseeable future, AI along with machine learning are used to analyze large amounts of alternative credit datasets and identify patterns in the different types of data that will help assess a prospective borrower’s behavior and financial reliability.

Considering real-time factors of the potential loan applicant’s creditworthiness and making precise profit predictions, AI models transform credit scoring by identifying borrowers with high potential and thus include them in the credit programs. As a result, integrating AI into the financial sector minimizes risk exposures and provides more individualized credit score assessments.

One of the most effective unsupervised learning techniques applied in data analysis is clustering, which aims to obtain natural groups from the data. Based on the principle of maximizing the similarity between the elements of a group, clustering forms data groups. The algorithms find an appropriate cluster for the borrower and use the average default assessment of the cluster to estimate the borrower’s financial reliability.

The machine learning credit scoring solution provides a good understanding of credit risk in lending to consumers as they allow for faster and cost-effective data processing and detect fraud traits due to the ability of algorithms to learn from fraud patterns and quickly identify them in financial operations.

With these functionalities, it is no surprise that lending institutions are actively augmenting their analytics tools with machine learning to process big data, produce better insights, improve risk management, and expand access to low-interest credit. The innovative credit scoring solution includes the following subphases of the machine learning algorithms:

• Access raw data
• Collect and group the input data
• Extract characteristics and properties from raw data
• Choose useful features
• Ensure the machine learning algorithm absorbs training data set to make predictions or perform given tasks
• Interpret results

Credit Scoring Software: Definition and Its Main Benefits

Credit scoring software is designed to optimize workflows between a creditor and customer including the accurate determination of the loan applicant’s solvency and the possibility of defaults by processing both financial and non-financial data.

The technological scoring solutions extend opportunities for the import of critical information from both standard and alternative sources into the database to create an in-depth analysis and evaluate the solvency of the potential debtor.

Investing in a loan management system and credit scoring software brings a lot of benefits and advantages for both lenders and borrowers. Here are the 4 most important ones:

• Holistic Approach

Using credit scoring software draws a holistic picture of each applicant by taking into account more current financial and social information than earlier data as it builds a better understanding of their intention of paying back the debt.

• Fair Credit Decisions

Based only on the facts related to credit risk, the credit scoring software solutions made it possible for lenders to measure the creditworthiness of a loan applicant more objectively and eliminate the human factor that is common in manual underwriting.

• Instant Credit Scores

With the credit scoring solution, lenders can also significantly save time as the program speeds up decision-making by allowing them to approve an application as well as distinguish higher-risk borrowers immediately. Loan applicants receive credit assessment quicker without any quality or precision compromises.

• Increased Access to Credit

While traditional systems restrict borrowers with no credit history, alternative credit scoring software solutions open up an opportunity for such applicants by analyzing and giving a gauge of the overall financial health of applicants with no credit score.

Credit Scoring Software Implementation Process

Although the development of credit scoring software might be a bit challenging and requires a lot of resources and costs, a well-organized implementation plan will provide the efficiency of all processes and essential financial savings for your business. To make the implementation process go as smoothly as possible, consider the following steps:

1. Identify credit scoring outcomes the organization would like to achieve
2. Ensure you have sufficient data capabilities
3. Leverage AI tools and machine learning in credit reporting

Usually, the credit scoring software implementation consists of a certain number of phases. Let’s see six important stages that are employed during this process:

1. Combining various internal data with external information to create a statistical credit scoring model.
2. Measuring the likelihood of default by assigning consumers to risk classes based on their individual inability to pay obligations on time.
3. Defining threshold values on the default probability scale, developing measures to be taken on risk-class customers, and establishing decision rules regarding the risk classes that may result in applications refusal, the conclusion of the contract, modifications of payment terms, and risk-adjusted interest rates.
4. Using backtesting, an important part of credit scoring software implementation, as it verifies the credit scoring really fulfills the desired targets on the basis of customer data. The credit scoring calibration gives useful improvement clues of the developed model.
5. Ensuring credit scoring system implemented as part of the risk management.
6. Documenting the debtor- and credit-related data as well as the payment activities to keep technical and statistical maintenance of the scoring model and conduct a receivables risk assessment.

To Sum It All Up

Even though coronavirus factors strongly into the banking climate and economic situation remains fragile, you should still keep abreast of technology trends, opportunities, and innovations as there is a great deal of global financial transformations including fusion of technologies, cloud-based ERP, and automation continue apace. Otherwise, you are giving your competitors an edge.

As we can see from above, credit scoring software development emerges as one of the main focuses of the banking industry in the near future. At Intellectsoft, we bring together professionals with a solid background to provide customized solutions for various organizations to make the client’s credit scoring software more powerful that will meet all the customers’ needs.

Get in touch with our experts to find out more about our financial software development, credit scoring services, and the possibilities of working together. Our team at Intellectsoft would be happy to offer a free consultation and discuss opportunities that will help you grow your business exponentially.

The post Top Features of Credit Scoring Software Solutions That Will Benefit Your Business in 2022 appeared first on Intellectsoft Blog.

According to the ATOS research, nearly $50 billion will be invested in financial technologies solutions, and, with the growing popularity of digital technologies implementation, these numbers are expected to grow further.

In this article, we’re going to explore the digital wallets – a commodity fintech solution that is no longer nice-to-have but must-have to complete today and is expected to become one of the dominant technologies by 2029.

As a part of our discussion, we’ll find out what benefits this technology poses for the financial industry and ordinary consumers, and, finally, share some great tips on how to launch a secure digital wallet and make the most of this product development.

FinTech Industry Trend for the Upcoming 2022: Digital Wallets

With over 500 innovative tech solutions launched each year in the financial industry, it’s essential to uncover the trending yet prospective technologies on the market and inspect the overall vector of the industry development.

So, along with the commonly known AI and ML technologies, as well as big data analytics, the evolving fintech trend we should make a major focus on today is digital wallet solutions.

The increasing smartphone adoption, availability of different digital wallet apps, as well as the rise of various consumer pains and needs, have been stimulating the demand for digital payment solutions entering the industry.

Apart from smartphone availability, the other major drivers for this technology growth include the rise of various e-commerce platforms, supportive governmental initiatives, attractive discounts and cashback offers from digital wallet providers, and many more.

Benefits of Launching a Digital Wallet App

In fact, digital wallet development has plenty of benefits for the service providers and their consumers. From the last one’s point of view, this technology enables simplifying the payment-making process and completing the transactions cash-free, while protecting financial account information and all the passwords.

Additionally, the advanced encryption and virtualization approach ensure that personal information will never leave the consumer’s personal device.

Last but not the least, digital wallets are extremely easy to manage and use, and feature different ways you can conduct a payment. Some of the digital wallets even allow their clients to withdraw cash from ATMs.

On the other hand, there are also various benefits of digital wallet for service providers and financial institutions. For instance, digital wallets are much easier to implement and maintain, they cannot be stolen or lost like regular wallets. The data stored there is secure and encrypted, which may add to the credibility of a vendor.

Along with the debit and credit cards, some providers can also include add-on features to encourage more clients to use their services: cryptocurrency, insurance cards, boarding passes, concert tickets, coupons, and gift cards, virtual IDs, and driver licenses, and many more.

Finally, by investing in a secure digital wallet, you can implement it just about anywhere and use it for nearly any transaction, no matter online or in-store!

Main Challenges of Building & Maintaining a Digital Wallet App

Once you know why this technology is a great investment option, you’re more than likely to initiate the digital wallet development. However, before you get started, it’s essential to weigh all the pros and cons of this fintech trend.

Just like we’ve mentioned before, the core advantage of a high-quality, secure digital wallet is its convenience and ease of use. At the same time, there are plenty of pitfalls you might face during and after you create a digital wallet, that can significantly impact the product performance:

• Fraud and security. It’s essential to focus on constantly improving the mobile wallet security and eliminating the risks of hacking and security breaches, as they can hit not only the reputation of an organization but the significant financial losses as well.
• Awareness and adoption. Despite the high popularity of digital payment technologies, some people are still uncertain about their security, data privacy, and many more. For this reason, it’s essential to invest in the popularization of a current trend, as well as explain the basics of its usage and the benefits this payment method can bring to consumers.
• Merchant accepting. If the businesses are not ready to support the contactless payment methods, neither the clients will. That is why providing support on the mobile wallets adoption stages is essential to provide the customers with multiple payment options.
• Compliance with legal requirements and standards. For successful digital wallet development, it’s also important to ensure it is compliant with all the regulations. This not only enables performing the first-class services to its clients but also in the best interest of the companies themselves.
• Device compatibility. It’s not enough to simply create a digital wallet to make customers start using it – you should also maintain the app so it could be easily utilized across multiple devices on different operating systems.
• Wider functionality. The core idea of mobile wallets implies their usage for different purposes, including payment transactions, document carrying, and more. To stay at the top among competitors, it’s essential to adapt technologies that go beyond the standard payment approaches and enable a wider range of different functions included in the app.

Without any doubt, digital wallet development features plenty of different challenges to resolve. However, with all those factors considered and implemented, it’s more than possible to create a competitive, high-quality product that will surely compel consumers to switch to mobile wallets technology.

Best Practices of Launching a Digital Wallet Solution

Now that you know the major benefits and possible challenges of developing a mobile wallet technology, it’s time to uncover how you can launch developing a safe digital wallet project.

1. Select the Type of Your Digital Wallet

Not all digital wallets are equal: their functionality and the area of use might slightly differ. So, one of the core steps on how to create a digital wallet is considering the most suitable type of app first:

• Open-loop or Closed-loop e-Wallets. These can either be used anywhere or only stick to a certain type of transactions we can perform. For instance, if the wallet is closed, like in Walmart or Starbucks app, you won’t be able to pay rent with any of these options.
• Mobile Banking Apps. Feature a robust set of functionalities and are used to deal with the financial services offered by a particular bank.
• Crypto Wallets. A completely new trend in the FinTech industry, that is traditionally used to buy, hold and transfer cryptocurrencies, and, because of its popularity, is now gradually migrating to mobile.

Once you’ve selected the most beneficial type for your product, it’s time to think over its main functions.

2. Consider Its Major Features

Implementing the core features is another important step in developing your secure digital wallet. It should cover all the top functions that enhance the wallet usability, ensure all the transactions are safe and cannot impact the security of customer data.

Additionally, such an app should feature a first-class customer experience to encourage people to switch to their digital wallets. Some of the main functions of a secure digital wallet include:

• Easy Registration, Sign-In, and Onboarding – Users usually try a lot of different apps and decide which of those they want to go on using in the first 3 to 7 days. By improving the UX and simplifying the access to a mobile wallet, you can significantly enhance its usability and reduce the bounce rate.
• Simple Payments – Another basic function that should always work smoothly. After all, that’s why people want to use it!
• Informative Transaction History – This feature always keeps your users up-to-date regarding the latest payments they did, so it becomes much easier to track the spendings. As a rule, it should display the time and type of transaction, as well as the name of a service provider that conducted it.
• Convenient Budgeting Trackers – Being usually presented as a standalone app, this feature can put your digital wallet onto the next level! Budgeting trackers can help to provide informative insights about the spendings across various categories and even give some great comments on its optimization.
• Valuable Rewards – This option adds more to the overall impression of the e-wallet, and performs as a compelling reason why people should start using it. For instance, a digital wallet can feature attractive cash back for certain categories or bonuses people can get by making payments.

These are only a few of the features you can add to make your mobile wallet app stand out from the competition. And, you can be sure that by offering the most beneficial UVP to your potential customers, maintaining the app functionality and performance, yet keeping them always engaged in e-wallet use, it’s more than possible to establish a first-class digital product!

3. Choose the Best Technologies

If you’ve ever wondered how to create a digital wallet or any other mobile app, then you must have already known that this process implies a thorough development process including various front-end and back-end techniques.

To ensure your mobile wallet flexibility and easier maintenance, it’s recommended to use native development tools: Swift (iOS) or Kotlin (Android). This way you can also make sure it will support the new features from the OS updates.

4. Make Your First Prototype

When getting started, it’s recommended to begin with making the interactive prototype of your digital wallet to save up on the time, resources, and costs needed to develop the app itself. You can first plan the screen designs based on the key characteristics of your target audience and which of their pains can be resolved with your app.

5. Develop & Test a Digital Wallet

Once the prototype is finalized, you can finally start the process of the digital wallet app development! To ensure your product will be secure yet bug-free, hiring a dedicated team of professional developers, like Intellectsoft, is a must-have for a successful project launch.

With over a decade of experience, our developers are always ready to deliver high-quality, feature-rich software products at the most reasonable price!

Conclusion

As you can see, building up a digital wallet is one of the most important innovations in the fintech industry that is only at its initial stages of development.

Once you’ve learned all the critical insights on how to create a digital wallet, yet uncovered the possible challenges and pitfalls to know before getting started, it’s the right time to start the development process!

Hiring a dedicated team of developers with solid experience and professional skills is one of the best solutions for creating digital wallets as well as many other financial software development projects.

We, at Intellectsoft, have years of experience in empowering different companies and their workforces with innovative technologies and advanced solutions within plenty of industries. Our experts have shown high expertise in the most complex yet challenging projects to deliver the best software products.

Already have the project you want to create? Talk to our experts to uncover how you can start developing a first-class digital wallet solution today!

The post How to Build a Safe and Secure Digital Wallet appeared first on Intellectsoft Blog.

The financial institutions are now looking for opportunities to quickly implement various banking industry trends and digital solutions that will help them to transform their current business model, enhance the efficiency of the operations and improve competitiveness on the banking market as well.

According to Deloitte’s recent research, these changes in the banking industry have opened up new focus areas for the businesses, such as cybersecurity, advanced analytics, robotic process automation, cloud computing, etc.

Moreover, around 84% of banking institutions consider AI solutions as one of the main priorities for improving their competitiveness in the current industry market

In this article, Intellectsoft will explain what emerging trends in banking will be popular in the upcoming years and what benefits they can actually bring to your business in 2022.

Banking Industry Trends to Keep an Eye On in 2022

This is one of the latest banking technology trends that will even keep picking up the pace. The pandemic forced brick-and-mortar banks to reduce their working hours or temporarily close branches until everything settles down.

More and more banks provide their services without having a physical branch. The only thing clients need to do is to use their preferred device to open a bank account and use their finances.

This is a cost- and time-saving solution for both banks and clients and the competition has already started extending.

Such an approach grants uncomparable flexibility and, what’s even most important for clients, digital-only banks offer their services at lower rates as there is no need to maintain a brick-and-mortar branch so this is a real threat to traditional banks.

1. White Label e-Wallet

The pandemic has stimulated users to try a new format of payments they’d like to use further – digital wallets. In general, that’s a contactless form of mobile banking that enables completing the transaction anytime and from nearly any iOS or Android device.

At the same time, it allows businesses to provide a personalized customer experience while eliminating the high costs and time for developing the system from a scratch.

According to the predictions of Allied Market Research, around 4 billion people will be using digital wallets as the main payment method by 2024, so such digital banking trends are simply a must for the institutions that want to be at the top amongst competitors.

2. Self-Service Applications

One of the most valuable online banking technology trends, especially for millennial banking is self-service apps. Basically, they enable customers to make a list of financial transactions such as deposit or withdrawal, inquiry, transfer, bill payment, loan, currency exchange, and lots of other wealth management directly in their in-app profile.

At the same time, various businesses within the banking industry can improve client engagement, optimize and automate most of the services that are currently offered on the banking market.

Thus, clients no more need a physical presence to conduct any sort of banking transactions: all these are already included in their banking app!

3. Cross-Platform Services

In fact, transactions are closely involved in other industries such as healthcare, insurance, hospitality and retail banking. That is why embedding cross-platform payment methods, such as mobile payments or hybrid wallets can significantly raise the income of the businesses and financial institutions they’re cooperating with.

A notable example of the utilization of cross-platform services is the Payment Program of the WeChat app in China. The embedded payment in-app services allow businesses and entrepreneurs to quickly conduct the transaction within a few seconds while not compromising the application security.

Moreover, this digital banking trend is much easier and faster to launch and maintain, and is between 15% to 50% more cost-effective compared to the native apps!

4. API Implementation

In the banking industry, API or Application Programming Interface enables synchronization, linking, and connection of the database of service with any application. It works as a so-called bridge that ensures the secure transmission of personal information without involving third parties.

At the same time, the API trend in commercial banking and private banking makes these financial institutions more transparent and secure, which surely is a great benefit for businesses, their clients, and of course, the financial institutions themselves.

The other great advantages of the API banking trend implementation are the cost reduction and increased income, workflow optimization, and eliminated time for transactions completion as well. Thus API implementation is among the top banking trends for 2022.

5. Video Banking

Another emerging banking trend is video banking technology – a great opportunity to enhance the workflow by optimizing the remote services for their clients. Such an approach provides a better engagement of customers with their financial institutions and enables the online processing of different in-person procedures.

This banking trend is especially beneficial for investment banking and consumer banking. Moreover, this enables bank specialists to be always available at the exact time the customer needs, so the bank doesn’t always need to be local to the client.

Thus, video banking can optimize the various banking processes to provide as smooth and effective client service as possible. At the same time, workflow optimization and automation allow financial institutions to reduce the time and costs needed to process any client request.

6. Online and Mobile Banking Experience

Online and mobile banking experience is already common as it’s extremely convenient for most people. In fact, in spring 2020 many banks experienced a 200% rise in mobile app registrations.

Respectively, it resulted in a declined number of physical branch visits as self-service automation enables clients to perform many actions on their own.

However, it’s worth noting that, at the same time, the demand for an expanded range of mobile banking features is growing exponentially.

Users are expecting to completely substitute their cards with an app and use it when withdrawing cash in ATMs, put a temporary hold on a card, use facial recognition or scan fingerprints when entering the app, view spending statistics, cancel service subscription payments, etc.

It’s crucial to understand and satisfy these needs for retaining the existing clients and attracting new ones.

7. Open Banking Gains Traction

Such an increased interest in online and mobile banking has contributed to the advent of new financial innovation called Open Banking.

A growing number of countries worldwide are planning to implement Open Banking initiatives and leverage the enormous potential of APIs. This is a perfect way to achieve a connected holistic banking experience for clients.

Basically, this technology will enable clients to easily consolidate and access their financial data from multiple institutions and organizations through open API for a seamless and impeccable experience.

The adoption of this technology will lead to Open Finance that makes it possible for third-party providers to access clients’ financial data after their consent.

8. Contactless Payment Methods Over Cash

The latest crisis has significantly impacted people’s lifestyles and has formed new behavior patterns. With the reduction of real-life interactions, people opt for online transactions and digital payment methods.

Some countries even expect the complete abolishment of cash and switching to solely digital financial transactions. In its turn, such a transition of banks to a cashless society will reduce costs related to handling hard money.

It will be much easier for banks to analyze digital transactions and get an overview of clients’ expenditure patterns.

9. Artificial Intelligence for Increased Personalization

Artificial intelligence is being implemented in many industries and the banking sector will broadly utilize this game-changer to increase clients’ personalization and overall service use convenience.

AI and machine learning will be actively used to provide clients with real-time tailored financial recommendations to ensure a smooth experience.

In addition, this innovative technology will help banks to predict clients’ behavior, perform risk management, reduce fraud, identify banking technology trends, and analyze the competition.

10. Shift to Composable Architecture

Many banks are predicted to switch to composable architecture to let them effectively respond to potential challenges and crises in the future.

The transition can be done step-by-step and it is a perfect agile and scalable solution for financial organizations that will help optimize many internal processes.

This is why broad investment in the transition to composable architecture is a banking trend for the future year.

11. More Complex Cloud Environment

From now on, banks and financial organizations are starting to create more complex cloud environments and actively benefit from the enormous potential of cloud computing technologies for efficient remote operations.

Such organizations have to process a huge amount of data on a daily basis and making the information easily accessible will be possible only with the increased use of cloud computing.

This solution is very scalable and cost-efficient and most financial institutions are predicted to embrace this innovation in their favor.

12. Robotic Process Automation for Higher Efficiency

Robotic Process Automation or simple RPA is another hot banking trend that institutions will try to adopt for increased productivity and efficiency.

This solution can significantly save the budget and substitute or assist human employees with a wide range of tasks to minimize error, maximize accuracy, and significantly improve clients’ experience.

Companies of all sizes invest to leverage this amazing solution that soon will rock the world of banking.

13. Focus on Cybersecurity

Taking into account that most transactions and financial operations are processed online, companies will pay extra attention to their cybersecurity to protect all the sensitive data and ensure the highest security level of clients’ financial information.

Such data is an easy target for hackers so to avoid financial loss and reputational damage, cybersecurity has to be a top priority for all industry players.

Summing It Up

As the situation with coronavirus spreading remains uncertain and the crisis continues, no one knows exactly when the dust is going to settle.

Companies might still encounter new challenges, opportunities, and discoveries so it’s mandatory to keep a close eye on the situation, monitor the market, and focus on customers’ behavior to quickly adapt to arising circumstances.

Don’t miss a chance to get in touch with our specialists and discuss potential opportunities that will help you implement the latest innovations to take operations to the next level and keep up with the banking technology trends.

The post Banking Industry Trends to Keep an Eye On: 2022 Edition appeared first on Intellectsoft Blog.

These brand-new institutions successfully deal with several key demands for the industry players, including having a robust strategy for building the computing infrastructure, establishing omnichannel experiences for clients, having a modern and scalable platform for data and analytics, and being cloud-based, configurable, and secure.

Thanks to these capabilities, AI banks are going to shape the digital transformation for the banking sector in the near future.

In the given circumstances, loan management systems are essential for building an effective financial business. Being specified on making loans faster, more accurately, and easier, this technology addresses the current demand for a leading-edge operational model that enables smart servicing and experience.

In this overview, we’ll explain how the systems for loan management work and what they are good for.

What Is LMS (Loan Management System)?

The software is a digital banking enhancement that facilitates the loan lifecycle as a whole. In particular, the technology is capable of:

• assisting in processing client data
• creating new loans
• generating accurate statements and reports for lenders
• managing interest rates
• serving collection automation.

In addition to these features, an important capability of loan management solutions is scalability. They not only facilitate processing for separate tasks but also automate the entire process.

Loan management software is an end-to-end service that covers key processes in cash and liquidity management, lending for commercial, consumer, mortgage, and syndicated needs, loan origination, and collateral management.

This way, the solution opens the door for new business opportunities as you can create a more comprehensive corporate environment and deepen the relationships with customers.

How Loan Systems Improves The Lending Experience

Having a seamless digital solution for loan management facilitates all your business processes and establishes a great borrower experience for your clients.

Loan management digitalization helps to get rid of manual work and papers. Thanks to the toolkit incorporated, you can transform the way your institution operates. With Big Data and analytics, businesses get the effective instrument to automate loans and establish a machine-ruled procedure for account opening.

Combined with machine learning capabilities, these technologies can leverage even large investments, including student loans and trading. Altogether, these enhancements enable identifying new growth opportunities, managing back-office data more effectively, and structuring the existing loans from present software and papers.

Improving customer experience is critical for business success. With loan management solutions, it’s possible to introduce a customer-centric service and address the growing demand for self-servicing portals.

The system can speed up customer onboarding through automated tools and digital document management and provides your managers with the necessary client data to increase the accuracy of offerings.

4 Key Benefits of a Loan Management System

Investing in a loan management solution brings substantial advantages for businesses of any size. Startups can rely on this technology for dealing with the existing loans faster and more accurately, which is the necessary prerequisite for future growth.

Mid-sized companies can invest in the system for improving the customer experience, which significantly improves the retention rate and assists in scaling. For large enterprises, the key benefits include increased security and streamlining the workflow.

Notwithstanding the company size, loan management systems will improve the organization in 4 key dimensions:

• Customer satisfaction
• Corporate processes
• Risk management
• Opportunity for innovation

Let’s review the perks of each of these enhancements.

#1 Boosting Customer Satisfaction

Contemporary consumers have become digital-savvy, and each business should address their new demands to the maximum today. With the tool that collects all the key information about clients and possesses the capabilities to establish a self-serving portal, your abilities to satisfy your customers increase.

It’s important to address the need accurately, though. The easier your digital solution, the greater your chances of maintaining existing clients and attracting new ones.

In this context, loan management software stores all the relevant information about your clients and makes it possible to draw insights from the data. As a result, your employees will offer the most accurate services to customers, based on their preferences and loan history that the technology has carefully collected and accurately processed.

#2 Optimizing Corporate Processes

These days, many companies suffer from miscommunication, lack of structure, and duplicated tasks. Organizations dealing with loan management are not an exception to this rule. But with the software specially designed for managing loans, your enterprise gets the chance to get rid of these problems.

The unified platform will organize all the existing loan-related processes. This way, your workers can easily access the most accurate information about all the loans and collaborate on the data in real-time.

#3 Mitigating Risks and Errors

Financial services suffer from human errors, and the cost of the mistake can become catastrophic. That’s why automating the processes is a must-have step for the industry.

When it comes to the loan management system, the software deals with billing inaccuracies and payment tracking as the most common areas for making mistakes. By taking over these routine tasks, the technology lets your workers concentrate on working on data rather than dealing with the tedious work of filling spreadsheets and inputting the client information.

Even more, the communication platform in-built in the software lets your workers react on the recently updated information only, which significantly reduces the frequency of miscommunication in your office.

#4 Fueling Innovation

Even though the loan management system mainly deals with optimizing the existing processes, this solution also helps businesses innovate.

By being a cloud-based digital end-to-end solution, this software addresses the growing demand for connected banking and takes over the entire loan lifecycle, freeing your people’s time to conduct more strategic and creative tasks.

In particular, the solution provides and organizes all the relevant loan-related information, and your workers have the key data prepared. They can concentrate on detecting patterns, justifying the logic, and finding new opportunities and more accurate services for clients.

Most Common Loan Types that Can Be Managed with Loan Management Systems

1. Personal loans, or loans for non-commercial use. In this loan category, the software will categorize secured and unsecured loans and store the credit history previously checked for easy access.
2. Student loans, or costs to cover educational needs. The system will select the date, amount, and interest rate (if relevant).
3. Commercial loans for businesses. Here, the software will assist in document management and automatically process the required data from these papers.
4. Syndicated loans for multiple lenders. With the software for loan management, the middleman in the transaction can process this loan type faster and easier.
5. Mortgage loans for real estate purchases. The system will take care of deadlines in this long-term loan and manage the needed documents,
6. Short-term and high-interest payday loans. With the loan management system, your workers won’t lose this loan and won’t miss its deadline.

7 Essential Features of Loan Management Software

Once you invest in a custom loan management solution, check your tech provider can include these critical features in it:

• Loan origination. The machine should be able to check the risks and assist in the decision-making process when processing a loan application.
• Loan servicing. This feature of a loan management system deals with the complexity of loans, classifying them by interest rates, payment deadlines, and other critical criteria.
• Funds collection. The service should have a digital wallet module to enable payments. The data privacy for this feature is essential, and each online solution builder should invest in a secure payment getaway.
• Debt management. The in-app notifications should assist in controlling the schedule, fulfillment, and fee calculations for repayments.
• Communication platform. The system should store all the information in the same place and update it in real-time so that your employees have accurate and fresh data to act upon.
• In-app analytics. The loan system should process the data algorithmically to establish connections between separate data points.
• Reporting module. Data visualization is critical to control the business performance and keep track of cash flow.

Ask Intellectsoft for Help in Building the Software for Loan Management

If you’re looking for a loan management system that possesses all the above-mentioned benefits and features and blends well with your existing processes, you can refer to Intellectsoft.

With decades of expertise in the IT market, we can build a custom solution with all the necessary features for your business benefit. Among our financial software development capabilities, you can request as main or extra features these services:

• Online Banking with the solutions including custom platforms, mobile apps, security, UI/UX, and system integration.
• Blockchain and Cryptocurrencies with an ICO launch support, transaction operations, smart contracts, and identity management.
• Digital Wallet, or an app that enables P2P payments, digital money transfers, and in-app currency creation.
• AI and ML technologies for predictive and recommendation systems, natural language processing, computer vision, and data mining and analytics.
• Trading and Securities services that include securities trading, digital brokerage, blockchain ledgers, and AI automation.
• RPA, or Robotic Process Automation for account reconciliation, automated mailers, monthly account reviews, and regular reporting.

Talk to our experts and request a custom financial software development solution that will fully meet your business needs! Transform your business today with Intellectsoft as your reliable technology partner!

The post How a Loan Management System Serves the Business and Customer Benefit appeared first on Intellectsoft Blog.

These days, FinTech attracts heavy investment: from $12.7 billion in 2020 to $23.4 billion in 2021. This means a significant shift in the financial industry structure, calling businesses to introduce cutting-edge technologies to remain competitive.

Given the capabilities of FinTech solutions, this change is for good, promising better ways for people to manage their money.

In this overview, we’ll reveal the key technology opportunities and share our experience on how to build secure FinTech applications.

FinTech App Potential and Adoption

Companies choose to build FinTech app solutions to simplify and increase the effectiveness of financial operations with a diversified set of high-tech solutions.

Currently, the secure FinTech industry encapsulates the set of various technologies, including payment processing, digital wallets, and lending services.

In addition to providing functionality to manage sensitive information, these automation tools have improved the efficiency of managing business processes. And these benefits reach far beyond the limits of traditional banking.

3 Key Ways FinTech Solutions Are Applied to Mobile Apps:

1. Adding financial features to non-financial apps. Now, each business owner can process in-app transactions.
2. App monetization. Secure FinTech services made the appearance of the Freemium model possible, meaning the presence of paid features in a generally free mobile app.
3. Meeting customer demands. Already existing and new technologies make banking apps in the customers’ eyes more effective and secure.

As the leading trends in Fintech application development, artificial intelligence, blockchain, gamification, bots, and voice technologies shape the future of innovation. All of them possess the power to reinforce your business performance and customer experience even more.

FinTech Use Cases

These days, FinTech applications are very popular and serve the financial needs of various industries, including banks, insurance, and eCommerce.

Erica

Bank of America decided to build a FinTech app to enable mobile banking for their clients. Serving as a virtual financial assistant, this mobile solution has a diversified set of features:

• View all your bonuses in one place
• Check your balances across the accounts
• Get a weekly snapshot of your month-to-date spending
• Locate past transactions across accounts
• Receive notifications on refunds
• Monitor recurring changes
• Receive bill reminders and schedule payments
• Get alerts when duplicate changes occur
• Check important credit score changes

All-in-all, this solution facilitates everyday banking and provides personalized and proactive insights to support financial activity.

Lemonade

This FinTech app provides instant access to a diversified set of insurance services. The set of features includes claims, giveback, and policy 2.0. Handled by AI tools, claim management allows filing claims quickly and hassle-free. All you need to do is to press a “Claims” button, tell the app what’s happened, and let AI run its anti-fraud algorithms to instantly approve this claim or send it to the team.

Giveback is a service that lets customers choose a nonprofit organization to care for and send unclaimed money that is left. All you need is to sign Lemonade Policy, a radically simplified, modernized, and digitized insurance policy.

Shopify

As an eCommerce platform, Shopify adopts FinTech instruments to ensure safe payment processing in the system. This company is a striking representative of non-financial players that start offering financial services without leaving their industry. The term that represents this trend is “embedded finance.“

In essence, Shopify provides infrastructure for other eCommerce companies, including in-built FinTech solutions for trading. In particular, the platform has Facebook Shop integration and provides installment payments to clients who buy for the price between $50 and $1,000.

This way, the ability to offer secure and efficient financial services with FinTech tools generates profits and creates revenue growth for the company.

Development Tips: How to Create an Outstanding FinTech App

Normally, the FinTech application development process consists of these stages:

1. Product concept. The development process starts with defining your product, along with determining its purpose, researching the market, and calculating the possible risks.
2. Vendor selection. Once you know what you do, it’s time to answer the question, “Who?”. At this stage, check the resource base of each vendor carefully to make sure this company can become your reliable tech partner in the long run.
3. Technology stack choice. Selecting the exact set of technologies for developing FinTech apps depends on the expertise of the team and your budget limitations, among other factors. Make sure your choice has true value for money.
4. UI/UX design. The main focus of a FinTech app is to ensure the most satisfactory customer experience. It’s important that the design has full functionality and presents all these features in an easy-to-use manner.
5. MVP development. This product helps to test your product idea by investing a minimum in the app development itself. What’s more, you will get customer feedback right away and develop software so that it addresses their needs more accurately in the future.

In the FinTech app building process, it’s important to make wise decisions and consider all the opportunities in each development stage.

For example, the ideation stage should go beyond corporate brainstorming and include in-depth research, like PwC best practices. Moreover, MVP development isn’t effective without sufficient testing before the release.

From our development practice, going for outsourcing is the best choice in terms of cost-effectiveness and quality standards. These days, software development outsourcing is rising, meaning the ability to provide enhanced experience with AI and IoT, work with blockchain services, and stick to the highest cybersecurity standards.

Nevertheless, it’s important to make an informed decision about your tech partner and be aware of all the possible risks and pitfalls in your cooperation.

5 Main Features for Building a Fintech App

• API integration. It’s essential to link your FinTech app to other applications to guarantee a satisfactory level of user experience.
• Chatbots. Combined with AI capabilities, this technology provides customers with essential and accurate support and maintains this service 24/7.
• Notifications. The financial sphere is dynamic and constantly updated. Without the notifications feature, they will miss important news or have doubts about whether the transaction was successful.
• Security. FinTech apps deal with sensitive information, and it’s crucial to introduce at least a two-factor authentication defense for customers.

3 Core Tips to How to Build a Secure FinTech Application

Generally, the development of the FinTech industry has improved the security standards for mobile apps. That’s because the safety layer is the key one for FinTech apps.

Unfortunately, not every tech vendor is aware of it: most developers prefer to copy the quick solution from StackOverflow or introduce already existing crypto algorithms. That’s how buggy software has flooded the market.

In the given circumstances, FinTech security is one of the strongest ones in the mobile app development market. Below, you will find the exact things to do to make secure FinTech solutions.

1. Payment Gateway Protection

Providing a safe payment gateway is a must-have measure for secure FinTech development. Being a technology that collects and transfers data from a client to an acquirer, it acts as an interface between a merchant’s website and its acquirer.

In other words, it deals with sensitive personal information that should be protected accordingly. Among must-have measures, your Fintech app development company should add SSL for secure connections, have a PCI certificate, enable tokenization, and provide 3D secure authentication.

2. Dedicate Enough Time to Testing

Also, FinTech security comes as a result of passing a sufficient number of checks and validation. In the software development process, they happen in the testing stage. Being titled “penetration testing,” this set of measures is aimed at detecting vulnerabilities in the app and contributing to creating an attach-resistant code.

The effectiveness of this step depends heavily on a clear understanding of the app security requirements. Besides, QA testers should work through every possible scenario during functional testing. That’s why the professionalism of these team members is crucial in FinTech development.

3. Invest in IT Security as a Whole

Finally, it’s impossible to maintain FinTech security in a vulnerable IT ecosystem in the long run. That’s why it’s important to develop a defensibility approach, meaning the creation of a safe cyber environment as a whole.

In this context, the list of key measures includes leveraging a robust IT infrastructure, building secure application logic, ensuring web-server security, and writing secure code.

Intellectsoft Will Help You with FinTech Application Development

Ask us for help! Intellectsoft is a Fintech app development company that offers a wide range of financial software development solutions:

• Online banking: Create a state-of-art banking solution for your end-users, including custom platforms, mobile apps, security, UI/UX, and system integration.
• Blockchain and cryptocurrencies: Ask for solutions and platforms to increase services’ security, reduce transaction fee expenditure, and automate operations.
• Digital wallet: The range of well-made wallet apps that enable P2P payments, digital payments and money transfers, and in-app currency.
• AI and ML: Adopt cutting-edge technologies to build effective, automated, and highly accurate systems for delivering financial services.
• Trading and securities: Invest in securities trading, digital brokerage, blockchain ledgers, and AI automation with us.
• Robotic Process Automation (RPA): Enhance productivity, drive down costs, and streamline compliance with this intelligent automation solution.

Let Intellectsoft be your secure FinTech development partner! Speed up innovation using the power of our banking and financial services. Intellectsoft is eager to advance your efficiency, improve customer experience, and skyrocket business performance with future-proof technologies. Contact us now!

The post FinTech App Development Essentials: How to Create an Efficient and Secure Application? appeared first on Intellectsoft Blog.

The financial accounting software is not an exception, as it helps to increase the business efficiency mostly by tracking the accounting transactions, managing the accounts of business (including the account payables, account receivables, business payroll, general ledger, etc).

Consequently, the growing market for accounting software solutions has significantly influenced its further development: in 2020 the total value of the accounting software market was estimated at $12.01 billion and, at a CAGR of 8.5% within the next 5 years, is expected to reach $19.59 billion by 2026.

The main reasons for the increasing demand in accounting software development are mostly related to the brilliant perspectives and numerous workflow improvements it can bring to the different businesses.

In this article, we’ll discuss what financial accounting software is, its main types, and the key benefits it can provide to the companies after the implementation.

Main Functions of Financial Accounting Software

Financial accounting software refers to the software that performs numerous accounting and bookkeeping tasks. This software is mainly targeted for streamlining the processes, reducing operational complexity, and optimizing the technology used for the core finance processes.

As a result, businesses can get a huge increase in the main KPIs, improved tasks’ efficiency, control, and quality.

Additionally, the accounting software solutions are cost-efficient and effective options for businesses to boost their competitiveness and enhance the performance for the successful partnership and fruitful collaboration.

According to PwC, the financial accounting software can also assist in accelerating the numerous decision-making processes using the finance process intelligence and cash intelligence features. For instance, this type of financial software can:

• Integrate different types of business data in a centralized hub
• Generate numerous cost-efficient business decisions via the scenario planning
• Display the suite of various KPIs and metrics using the specific dashboards and multimedia solutions
• Leverage the agile “what-if” solutions to analyze the future cash flow scenarios
• Provide businesses with dynamic data and advanced performance analytics

Thus, by implementing accounting software development, businesses can significantly improve their performance, uncover the effective options of accounting automation, gain valuable insights about the further dynamics of development and its enhancement as well.

The Main Types of Accounting Software

Needless to say, the types of accounting software are determined according to the specific financial operations the business employs. At present, we can classify the 3 basic categories of financial accounting software.

Invoicing / Billing Software

The financial accounting software that handles the invoicing/billing operations is traditionally responsible for the basic billing activities of the company. Additionally, they cover the daily accounting tasks of a business that includes cheque issuing, various payment notifications for customers, etc.

Payroll Management System

These accounting software systems cover the basic payroll registers, calculation of the employees’ salaries, cutting deductions, depositing the salaries directly into the staff member’s bank accounts, producing tax forms, and plenty of other different tasks.

Enterprise Resource Planning System

Also known as an ERP system, that type of accounting software solution is in charge of the entire operating system that covers product planning, material buying costs, inventory management, distribution and accounting, marketing, HR, finance, and more. Basically, that’s a huge system that handles the entire business performance from a financial aspect.

Benefits of Financial Accounting Software

No matter which type of software a business has intended to apply, any of these operates with strong potential and numerous benefits for the organization from any industry. Here, you’ll find the basic features of accounting software that companies would like to make use of.

Enhances and Simplifies the Accounting Processes

One of the major reasons why companies apply accounting software development is its availability for the non-accounting audience. The financial accounting software benefits the various accounting processes by automatically performing the key tasks and providing a clear explanation to each operation.

Saves Lots of Costs

With its automation feature, the accounting software can greatly enhance the numerous calculations and administrative procedures. However, it also enables the control of the companies’ revenue, which means the businesses become less dependent on the finance management experts outsourcing.

Provides the Transparency of Complex Processes

Another great benefit of using financial accounting software is that it can provide cost-efficient business solutions and prevent recurring human errors. For instance, this software can effectively calculate the accurate totals or provide the reporting data in time, which is essential for the successful performance of any business.

Assists With the Tax Laws Compliance

Good accounting software automatically contains the taxation laws compliance in its internal structure. With this feature included, the businesses can easily avoid the penalties and some other serious tax laws issues that can be detrimental to the company’s performance.

Improves the Customer Service

The current accounting software systems can significantly enhance customer relationships as well. Now, businesses can manage the billing and invoicing, reduce possible delays and prevent miscommunications as well.

Additionally, the accounting systems can send notifications and business emails, reminders of outstanding dues, and different types of notes, which increases the business’s credibility.

Therefore, the companies will boost customer retention and customer loyalty via the features applied in the process of accounting software development.

Thus, having spent some time and resources on software training, the accounting software systems allow the business owners to complete the basic accounting operations and comply with legal standards with ease and simplicity.

Tips to Develop an Outstanding Finance Accounting Software and the Core Features to Include

Accounting software development implies not only advanced knowledge in programming but also a deep understanding of the financial accounting processes. That is why finance management experts recommend including the following features of accounting software:

• Cash flow tracking
• Accounting analysis automation
• Transaction processing and management
• Payroll processing
• Auditing
• Tax laws reporting
• Invoice processing
• Budget management
• Smart prediction
• Data encryption

In order to save the accounting software cost, the companies tend to use the free accounting software or purchase ready-made options with specific configurations that can hardly be changed.

Consequently, the companies end up with the need of creating their own financial accounting software that will fully correspond to all the business goals and would provide the maximum data protection.

And that’s where the Intellectsoft development team works best: we’ve created the detailed step-by-step strategy for creating the feature-rich, cost-effective, and easy-to-use software solution that is directly targeted at your company or business. The essential steps for accounting software development should cover the following:

Research the Problem

Talking about the first step of any type of software development, it’s important to make detailed research regarding the main goals, specific needs, and pain points of a business the software should either resolve or enhance. According to PwC best practices, the preliminary project stage consists of:

• Conceptual formulation of ideas and alternatives;
• Determination of the key performance requirements and essential features to include, and also estimate the total cost of accounting software development;
• Presenting the demonstrational sample of the software, its concept, and how this can fulfill all the business needs;
• Research for the alternative methods of the development of the specific features, if available;
• Set up the performance requirements needed to comply with the business goals;
• Select the person in charge of the accounting software development process, who will run the final testing and make the adjustments.

Develop the Prototype

Before the development team goes directly into the coding, it’s essential to design the product prototype. By creating a model of the financial accounting software for a specific business, the clients can provide clear ideas of what they expect to see in the final software version.

Additionally, at this stage, it becomes much easier to determine all the features that should and shouldn’t be included in the accounting software as a result.

Start the Software Development

After the prototype is ready, the developers start working on the custom accounting software creation. At this stage, the team writes the code, performs the testing and debugging, adapts the software to the changes, and prepares the product for the general release.

Testing and Release

When the software is presented, it’s essential to monitor the financial software system for any failure indicators and security vulnerabilities, and adapt the product to the emerging industry trends. The professional team of developers will be also able to maintain the system and keep it up to date according to the basic business requirements.

Summing It Up

Accounting software development has become an essential yet efficient part of business improvement within any industry. Its implementation can provide numerous benefits for the small and large business units, including processes automation, informative performance insights, and smart development scenarios, which can assist in optimizing financial management.

Creating feature-rich accounting software solutions requires a deep knowledge of financial software development and detailed research of the specific needs of your business.

Cooperating with a dedicated team of developers, in this case, is the most effective option to get the best financial software that perfectly fits all your needs.

Intellectsoft has years of experience creating innovative solutions for the financial industry, so we are well-aware of the modern market trends and the needs of end-users. We treat the client’s business as our own, so we deeply immerse ourselves in the project in order to offer the best-fitting technological solution.

Are you looking for a reliable development vendor to create high-quality accounting software that would help to take your business to the next level? Then, contact Intellectsoft, and let’s transform the industry together!

The post Financial Accounting Software Development — Cost, Features and Security Measures appeared first on Intellectsoft Blog.

Historically today’s financial services and banking institutions have been too slow to adapt to a fast pace of tech development, especially in the area of service delivery and personalization.

And now the time has come! As current marketing and decision-making teams in financial services should focus on providing a unified customer experience, at the same time maintaining the privacy and providing custom-tailored recommendations to drive customers throughout their marketing journey.

What Is Personalized Banking? Could It Be Really That Important?

What is the groundwork for a unified customer experience? Remembering a line of different tricky factors that companies need to consider when dealing with their customers, below let’s have a look at personalized banking. This time – as the future of customer experience in finance.

Personalized banking is intended to deliver a value-rich service experience to end-users, taking into account their personal experience, demands, and historical customer profiles.

Helping to shape trust and seamless experience by eliminating problems even before it’s realized by a human, personalization in banking makes it possible for the industry to drive results and revenue owing to the following:

• Higher rate of engagement
• Higher rate of conversion
• Higher customer retention
• Higher customer loyalty
• Better customer experience
• Multi-channel marketing consistency
• Higher ROMI (otherwise, return on marketing investment).

What Are The Commonest Types Of Personalization In Banking?

Prescriptive Banking Personalization In Real-Time

Prescriptive banking personalization is aimed at guessing the intentions of the user and the commonest needs, based on historical data.

Highlighting different marketing contexts or global business goals, marketing, and software development teams can create a seamless and fully personalized customer experience on the go.

For example, providing users with live prescriptive recommendations during active online shopping – driving both active customer engagement and a higher rate of conversion. How can anything go wrong over there?

ML-Based Financial Service & Banking Personalization

Banking personalization driven by the machine-learning crack of technologies is built around using the full potential of intelligent ML-based software algorithms. Most of every successful use case in AI-driven automation is generally referred to as making maximum informed decisions and reaching more potential customers using individual behavior patterns.

How To Make It Happen?

Putting yourself in the shoes of the customer, it becomes apparent that people do not just want to get to know about some sort of new products or services peppered with loudly-voiced statements of their developers or owners.

Let’s face it – people just want to quickly get solutions to their issues as they arise. That’s exactly when personalization comes into play, helping banks and other institutions in the financial industry streamline their marketing pipe and turning customer experience into a fully controllable journey.

1. Leverage Banking Personalization Across Different Channels
2. Build Up A Personalized Web Content
3. Segment Customers With A Buying Cycle In Mind.

Leverage Banking Personalization Across Different Channels

Targeting multiple channels and using at least several sources of information is a great way of creating a 3-D view of a single customer. Here the most important thing is to employ a unified marketing measurement.

That would be absolutely central to driving the success of any banking personalization campaign. That’s why marketing and product development teams should pull together different shreds of data from multiple sources, parts of the company, and areas of business.

As a result, creating cohesive marketing material that raises an array of successful personalized marketing campaigns becomes a much easier thing to do.

For even better performance, we recommend spotting the right connections with potential customers – whether they are online or offline – to create a seamless marketing journey using different touchpoints based on previous touchpoints and behavior.

Building Up A Personalized Blog Content

A comprehensive content marketing view backed with a data-driven content creation process can become a powerful engine driving the whole integrated marketing strategy. And right here the financial and banking industry is no exception. Easier said than done, right?

First and foremost, don’t try to craft a one-size-fits-all content strategy, even in case you can afford to apply to some well-segmented demographics.

Instead, let’s optimize content blogs and other related resources using small (or at least moderate) segments. Later on, that would be much easier for marketers to directly reach the ones having the most interest in that topic. What about doing that in practice? We recommend creating targeted content by dividing potential customers into two categories:

• Based on use. For example, are your customers commonly using credit cards? Do they prefer operations with cash withdrawal? Probably, they are looking for home financing?
• Based on interest. Let’s say the average customer would not even look at a credit card with flight miles. So, any marketing content for promoting credit cards of that kind should keep that in mind, indeed.

Segmenting Customers With A Buying Cycle In Mind

As we already mentioned (that’s really important), having perfect timing is everything. Everyone in financial and banking services can not afford to promote their products or services simply based on global trends or current quotas. We believe that turning all of your CRM-based data into a smart software helper for smarter, better decisions could be an option.

Marketers just need to have their customer data split by every stage of their purchasing journey. By analyzing data using the right individually-tailored software toolkit, marketing teams and decision-makers can uncover invaluable insights on different things. Here are a few of them:

• Analysis. In service-based marketing, the customer’s journey never ends after the purchase. Make sure to offer data-driven to keep customers well-informed and professionally engaged
• Decision. Here your potential customers are ready to go. Give them the most straightforward way to purchase. And they will make it!
• Consideration. Remember that your customers must have already seen what your competitors have to offer. It’s just time to show them why a smarter, more affordable, and generally better look
• Awareness. Let people know more about your great products or services. Focus on needs instead of highlighting benefits – and you’re already halfway done.

Bottom Line

After all, current industry demands in personalized banking and modern financial software development aren’t all-new trends. They are just reshaping the original business models that used to pull customers to banks and other financial institutions far before the era of digital marketing.

So, something around fifty years ago people would go to banks knowing their teller counterparts simply on a first-name basis. But right now the market – and the whole wide web – is much more fragmented.

Here, at Intellectsoft, we are all about providing banks and other financial institutions with financial software development services aimed at driving their bottom-line results to a wholly new level of productivity. Check out the latest technologies and top-innovative solutions by Intellectsoft. 

Looking for something really specific or tailored exclusively to your business? Don’t hesitate, talk to our experts and find out more!

The post Personalized Banking As The Future Of Customer Experience In Finance appeared first on Intellectsoft Blog.