How to choose the best financial software development company?
N-iX
2022-06-01T14:53:19+00:00

Long gone are the days when financial services were limited to desktop computers, local servers, and paper-based payroll systems. Whether we are talking about a financial department within a business, or a specialized fintech company, they are all in dire need of digital transformation in order to k...

How to choose the best financial software development company?

Long gone are the days when financial services were limited to desktop computers, local servers, and paper-based payroll systems. Whether we are talking about a financial department within a business, or a specialized fintech company, they are all in dire need of digital transformation in order to keep up with the increasing competition. Companies often opt for partnering with financial software development vendors. But how to find one that will meet your specific business needs and develop an innovative solution? Discover in the article. 

A brief overview of the market changes

Often, financial software development is used as an umbrella term for a variety of activities that are in some way related to banking, payments, payrolls, or any other financial activities. 

The fintech software development market is actively evolving in various directions. Thus, according to GlobeNewswire, the fintech market is expected to reach around $305B by 2025. Formerly resistant and restricted, this industry is opening up to digital transformation and the adoption of advanced technologies. 

It is wise to take note of this digital shift. The fintech landscape has a wide range of diverse and growing applications with technical advancements in areas. For instance, insurance (InsurTech), payments gateways, regulatory (RegTech), and other fintech software are available. Let’s look at these usages of technology in these fintech branches.

InsurTech: 

According to Juniper Research, artificial intelligence will save the industry nearly $1.3B by 2023. When it comes to insurance, it is possible to automate post-incident data collection, analyze photos of accident scenes, and perform functions that reduce the time and money required for insurers to settle claims with the help of technology.

Payments gateways:

Payment gateways transfer the data on an intended transaction from a merchant’s mobile app to banks. To do it securely, the system uses security protocols and encryption. If you cooperate with a fintech software development company, they are responsible for the authorization of a cardholder, processing of a previously authorized payment and refunding a canceled order and void, security, compliance, and personal data protection, KYC and financial monitoring (in most cases).

RegTech:

RegTech Market is expected to reach $33.1B by 2026. Such solutions use machine learning and cloud computing blockchain to reduce compliance costs and simplify and standardize compliance processes. RegTech plays a significant role in services like KYC, Transaction Monitoring, Customer Credit Scoring, AML screening, trade data tracking, fraud prevention, compliance risk analysis, etc. Also, RegTech is widely used in compliance management, identity management reporting, and risk management.

Cryptocurrency and blockchain: 

The fintech world is yet to embrace cryptocurrency fully. Not all banks are entirely on board with the transparent and decentralized ideas promoted by cryptocurrency. Consumers aren’t entirely sold on the idea either, with only 6% of them using fintech blockchain applications to transfer cryptocurrencies. They consider security issues as the most significant concern regarding this new technology. 

Financial software development companies: a market overview

Clutch lists almost 4K of financial software development companies. Out of these companies, over 62% are small vendors with less than 50 employees aboard. And while there’s nothing wrong with smaller companies, they might not have enough resources if you need a big team or plan to scale quickly. Around 35% of these companies have between 50 and 999 experts aboard. And only 2.1% of vendors are large firms with over 1,000 specialists

% of different sizes of fintech software development companies according to Clutch

The vast majority of these vendors are based in established outsourcing destinations (e.g., Eastern Europe, Asia, and South America). Eastern Europe is a leader in the number of companies, with almost 1,000 vendors listed on Clutch. The region also boasts the largest share of midsize (30.5%, compared to 25.9% in Asia and 11% in Latin America) and large vendors in the global market (27% in Eastern Europe vs. 23.7% in Asia and 11.7% in South America respectively). 

# of fintech companies in different regions

Cooperation with fintech software development companies will help you optimize your business processes, keep up with the increasing competition, and upgrade the quality of services. However, you need a reliable provider of such services. We have put together a checklist that will help you do that. Let’s dive in. 

How to choose a trusted fintech software development company

This section breaks down the key aspects that make a trusted financial software development company. 

  1. Define your business needs

To begin with, you need to match the needs of your business to the overall goals and vision of the future. This is vital to ensure the success of your cooperation with a software development provider. With the help of a trusted vendor you can, for instance:

  • Digitally transform your business;
  • Introduce a new service or solution;
  • Automate mundane operations;
  • Migrate to a new platform;
  • Improve visibility of your processes;
  • Optimize performance of existing systems;
  • Tackle a complex business challenge or find a solution to an existing problem;
  • Conquer a new vertical with a new service.

Whichever is your aim, make sure to choose the vendor that can help you bring these business objectives to life. 

  1. Establish the selection criteria 

To find a trusted software development provider, you have to know exactly what you are looking for. So, you need to set the vendor selection criteria. These criteria are based on your specific business requirements and the expertise you seek in the vendor-to-be. These can be: 

  • Understanding of the industry;
  • Proven track record of working with similar businesses;
  • References, reviews, and testimonials from clients;
  • Any other aspects you consider important. 
  1. Make a long list of potential partners

When compiling a long list of financial software development vendors, here’s what you need to consider:

  • Outsourcing destination: Look for a location with a decent number of vendors, sufficient tech talent pool, and a good reputation; 
  • A number of employees: Focus on vendors with at least 250+ specialists. Smaller fintech software development companies might not be able to staff or scale up quickly enough; 
  • Market experience: Include companies with over five years of market presence. Such vendors typically have more experience in developing complex solutions for their clients; 
  • Client reviews: Use directories like Clutch to make up the list of your potential partners and check their reviews. Such websites verify the reviews, conduct interviews, and publish only genuine reviews, so this information is objective. You can see the Leaders Matrix of fintech development companies (as of the moment of writing).

market leaders in fintech software development

  1. Shortlist the chosen financial software development companies

Once you have a long list of companies, it’s time to look at them and narrow down the list. This brings us to your business needs. When searching for a fintech software development company, it's vital to look for a vendor with a portfolio of projects in your domain and the technical expertise needed to carry them out. This aspect brings us to the next step of choosing a trusted vendor. 

partner with the best fintech software development company

  1. Analyze their portfolio and case studies

As we have already mentioned, the fintech software development market is evolving in various directions and requires different expertise. So, we cannot cover all business verticals in a single article. But here are some examples of the expertise you can look for in your fintech software development company:

Fraud prevention

As stated by the Association of Certified Fraud Examiners (ACFE) report, an average fraud costs an organization more than $1.5M. However, the financial aspect is only a share of the overall impact that a security attack has on a business. Fraud hampers customer experience, damages company reputation, brings about operational failures, etc. 

Thus, technical solutions that allow companies to identify and prevent unauthorized financial activity identify theft, cyber hacking, insurance scams, and more are essential for fintech businesses.

Open banking

New European standards require banks to share account data with regulated third-party providers for payment initiation. This step aims at seamless integrations, streamlined processes, and actionable insights available within seconds and protected from cyber threats. With open banking APIs, financial institutions can use banking data to make more informed decisions faster. 

So, having a financial software development company with such expertise by your side will help to optimize your business processes and enhance your services. 

Robust security expertise

The fintech sphere works with sensitive information (cardholder information, passport data, customers’ transactions, etc.) So, security is vital when cooperating with a financial software development company. To ensure the security of your data, your potential partner needs experience in: 

  • End-to-end encryption. The end-to-end encryption method ensures a secure transfer of payment information, preventing third parties from accessing the data in the process of deciphering it. This expertise is vital to ensure the high security of your fintech project that deals with sensitive data. 
  • A hardware security module. A device that manages digital keys encrypts and decrypts functions for digital signatures and provides strong authentication is an integral part of the E2E chain.
  • Tokenization. This is another level of security that prevents the use (transmitting, storing, and processing) of sensitive data, replacing it with tokens to perform financial transactions securely.
  1. Look for clients’ feedback and testimonials

Out of more than 20K vendors listed on Clutch, only 6K have reviews. Though this platform may not seem significant on its own, the lack of reviews from clients anywhere is a disturbing sign. 

Check the company’s website. Look for long text reviews, video testimonials, and details of the collaboration. It is also a good idea to google the company and check reviews online. This might clarify what a typical project for this firm looks like, how they tackle challenges, and if they can deliver the negotiated results.   

  1. Check certifications, partnerships, memberships, and awards

If you plan to find a trusted fintech software development company, make sure you deal with the one with all the needed qualifications. For example, every reliable company should have at least basic ISO certifications (9001 and 27001). In case your company is dealing with payment processing, you might need PCI DSS compliance. If you need cloud specialists, the vendor should have partnership status with at least one primary Cloud provider (AWS, Azure, or GCP). 

If you can find the company in the international ratings, such as Global Outsourcing 100 (it recognizes the best outsourcing companies) – it is also a good sign.

Criteria for choosing the best fintech software development company

WRAP UP

​​While looking for the best financial software development company, opt for a vendor with strong technical expertise, end-to-end development services, and an in-depth understanding of the domain. This will help you find the tech partner for successful cooperation and, as a result, will help you accelerate your fintech solution. 

Why choose N-iX as your fintech software development company?

  1. We have 1,800+ experts on board that are ready to consult and support you at each stage of your financial software development process;
  2. N-iX complies with international security regulations, including ISO 27001:2013, PCI DSS, ISO 9001:2015, and GDPR, to ensure the high security level on your fintech project;
  3. N-iX professionals have a proven track record working with payment integration, fraud prevention, multicurrency processing solutions, and other types of financial software.
  4. Our tech portfolio includes 20+ successful partnerships with global fintechs, such as Currencycloud, Globacap, Cleverbridge, and others;
  5. N-iX specialists have in-depth knowledge in cloud-native and cloud-agnostic development, big data engineering, data analytics, data science, ML&AI, BI, DevOps, and Security.

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