According to Fortune Business Insights, the global banking software market is expected to grow from $12.5B in 2022 to $40.7B by 2029 at a CAGR of 18.3%. As of the moment of writing, 35% of global banking executives are reporting substantial progress with their digital initiatives. But why is the digitalization of the banking industry at the hearing in this decade? The answer lies in the long list of advantages of adopting innovations. For instance, strong data security and enhanced customer experience that result in saved costs and an excellent brand reputation.
So, how to choose among the best banking software development companies that will be able to drive your project from a Product Discovery phase to the software release and maintenance? What are the must-have compliances for the banking industry your partner should provide? Let’s dive in for these and other answers.
What tech requests can be solved by banking software development companies?
Digitalization drives banking organizations in their efforts to automate financial operations and improve the customer experience while maintaining data security and compliance. An experienced software development company can help financial institutions with different kinds of tech requests.
Typically N-iX clients seek a partner to either implement new features or optimize their existing solution. Sometimes, however, a client has a specific challenge that needs to be addressed. Let’s view these cases in more detail.
1. Implementing new features for banking software
When it comes to modern banking solutions, users expect applications to be multifunctional. Usually, the set of basic features of the banking software includes secure login and authorization, money transfer, digital payments, and expense tracking. However, as the banking institution wants to expand its digital service list and tailor their solutions to meet customers’ demands, they reach out to software development companies. Tech providers can help them implement supplementary features such as multicurrency processing, real-time in-app customer support, integration with third-party services, and more.
2. Modernizing a banking solution and introducing new technologies
In some cases, banking institutions already have a solution that covers most of their customers’ requirements and meets all the compliances. However, they still want to upgrade their existing system, by increasing its scalability. Banking software development companies can assist you on your digital transformation journey. Most tech vendors that specialize in the banking domain provide the following services:
- Changing the legacy system to increase flexibility and cut down on maintenance costs;
- Cloud transformation to boost scalability and introduce new technologies faster;
- Integration of Machine Learning algorithms to detect fraud and deliver personalized customer experiences;
- Introducing Data Analytics for advanced decision-making.
3. Addressing your specific challenge
Let’s look at the list of common requests that can be covered by banking software development companies:
Detection and prevention of malicious attacks
In such a case, your partner aims at identifying and reducing the risks related to fraudsters’ attacks. Fraud prevention focuses on recognizing theft, cyber hacking, and insurance scams and protecting the banking institution’s assets, systems, and customers. As a result, you can eliminate key risks related to phishing and hacking to access users’ accounts.
Customers’ sensitive data protection
To solve the issue of the customers’ information safety, your tech provider will focus on the encryption of sensitive data. This could be done by hardware security module (HSM) adoption and tokenization. Both practices can help you keep your customers’ data safe and sound and, subsequently, prevent extra expenses and reputational damages for your business.
Prevention of money laundering
To eliminate the possibility of money laundering related to identity theft, your software development company can introduce the “Know your customer” (KYC) and “Know your business” (KYB) procedures. This set of compliances and tools aims at assessing clients’ risk profiles and financial profiles. With KYC and KYB in place, you will prevent money laundering by criminals who fraud documents from ultimate beneficial owners. Here, at N-iX, we have experience in the automation of KYC as well as automated monitoring of inflows/outflows and the compliance check system for Currencycloud, a global payments platform.
Regulations and compliance support
Adherence to compliances and regulations is a must for the banking domain. Some of them, like Open Banking, are a key to making the networking of accounts and data across financial institutions and third-party service providers secure. Open Banking is a system that integrates financial institutions and third-party providers and grants them access to the clients’ data through the use of APIs. Though Open Banking API is mandatory for any banking or fintech business within the UK, many institutions worldwide are adopting it. The key reasons for the interest in Open Banking are that it can improve their service offering, apply an analytical approach to personal finance and speed up real-time payment operations. Here, at N-iX, we have experience in delivering measurable business value by implementing an Open Banking API for one of the top UK fintechs. For instance, as a result of the OB integration with the existing ecosystem, our client was able to make it available for third-party providers.
In some cases, a banking software development company has to implement a more complex strategy for banking projects that spans more than one aspect, for instance, compliance and feature development.
Success story: Let’s look at how N-iX successfully handled a neobank transformation project. The client needed to redesign and rebuild a mobile banking app to improve the user experience. During the project, the N-iX team developed Android and iOS apps and implemented a number of security measures, including 24-hour fraud monitoring, secure face and biometric ID, the ability to block cards from the app or online, and more.
N-iX engineers also developed and integrated new features, namely, cashback, deposits, as well as dashboards, and simple user analytics. In addition, we conducted the Open Banking implementation as one of the mandatory steps for financial institutions in the UK.
As a result of a partnership, the client got the solution that enabled seamless management of their funds and excellent user experience for their customers. Moreover, the neobank managed to:
- accelerate its time-to-market;
- significantly improve data protection standards;
- reach Open Banking compliance.
You may also be interested: Challengers and neobanks: the rise of finance alternatives
What steps of solution implementation a banking software development company will guide you through?
With a reliable software development company by your side, you will be able to transform technology into measurable business value while maintaining a cost-quality balance. Experienced tech vendors can guide you through every stage of SDLC during your project, including:
- Banking software idea validation/product assessment. At this stage, the workflow depends on your initial aim. If you want to validate your product concept, your tech vendor will conduct a Product Discovery to clarify tech requirements, find the best approach and technology stack for your specific business case, as well as build the prototype. If your goal is to modernize your existing product, your partner’s tech consulting team will thoroughly assess the banking software to later upgrade it based on their findings.
- Planning the development strategy and its implementation. During this phase, your engineering team will outline the project's key features and deliverables, as well as design and implement these features.
- Integration of a feature with the existing system presupposes introducing new units of functionality directly into the banking software.
- The final phase of support and maintenance covers the constant tech support of the solution and its timely updating.
What are the characteristics of a trustworthy banking software development company?
As of February 2023, Clutch lists over 4,700 tech vendors worldwide that specialize in tech consulting and custom software development for banking and fintech domains. However, these companies differ greatly in size, expertise, and service offerings. How to choose the one that will turn your business case into a success story? Pay attention to the following criteria:
Experience with financial software development
The banking sector is highly regulated within every country. Therefore, proven experience in developing features and modernizing banking solutions for this industry is a must when looking for a software development partner. Before shaking hands, look through their portfolio of banking projects and read client reviews on credible resources such as Clutch. It would be a huge plus if your tech partner has dealt with innovative finance systems, such as neobanking and implementing digital challenger banks. These banks distribute services to their customers digitally and, therefore, are able to minimize their operational costs.
The vendor’s size
When choosing among numerous software development companies that deliver for banking sector, pay attention to the size of your potential partner. Large and midsize tech companies with 250+ employees on board are more likely to have optimized development processes and robust quality control practices. Moreover, such enterprises usually have access to a significant number of engineers, which ensures quick project starter.
Relevant technological expertise
Another aspect that will help you sort out reliable software development companies for banking is their technological expertise. Focus on the tech vendors with specialists well-versed in Cloud development, Artificial Intelligence and Machine Learning, and Big Data analytics. The engineering vendor with robust data expertise can help you accumulate and analyze large volumes of diverse financial data in real time as well as make data-driven decisions regarding financial processes. Seasoned Cloud specialists can migrate your banking solution to Cloud infrastructure and, as a result, enhance your data governance and increase scalability. N-iX engineering team consists of 400 seasoned Cloud professionals as well as 200 data specialists that have experience in powering innovative technology businesses for banking and financial services domains.
Information security and regulatory compliances
One of the main responsibilities of a banking software development company is to secure the personal and financial information of their client’s customers. To make sure that your tech partner will keep your sensitive data safe, figure out whether they comply with the recognized data protection standards and regulations. The banking domain requires adherence to special industry and region-specific regulations, namely the Payment Card Industry Data Security Standard (PCI DSS) and Revised Payment Services Directive (PSD2). These regulations secure credit and debit card transactions against fraud.
For instance, N-iX adheres to all the necessary regulations for banking and fintech domains and has a track record of integrating software for GDPR compliance. For example, as a part of cooperation with the UK personalized financial solutions provider, N-iX helped the company to comply with the Payment Services Directive (PSD2) and GDPR, as well as to implement the Open Banking components.
Why should you choose N-iX to build your robust banking software?
- N-iX is a global software engineering company with 20 years of experience in tech consulting and custom software development and over 2,000 skilled tech specialists on board;
- The vendor’s client list spans long-term relationships with leading banking institutions and financial enterprises such as Currencycloud, cleverbridge, Globacap, and Mobile Trading Partners, as well as Fortune 500 companies;
- N-iX specialists have vast experience of working with payment integration, multicurrency processing solutions, fraud prevention, and other types of financial software;
- We comply with international data protection standards and protocols for fintech and banking domains, including PCI DSS and PSD2;
- The company is well-recognized in the industry: N-iX has repeatedly reached top positions in the global outsourcing rankings, such as IAOP and has made it to the CRN and GSA UK lists for several years in a row. In addition, N-iX received certification for the Hellios Financial Services Qualification System (FSQS).