How Much Does it Cost to Build a Fintech App?

What is Fintech?

"Fintech" is an abbreviation for "financial technology.” It refers to the use of technology that aims to improve and automate the use of financial services.  Fintech service providers leverage specialized software and algorithms to help consumers better manage their finances. 

The Fintech Market: An Insight

It incorporates various aspects of financial activities, from banking systems and mobile payment to digital lending and cryptocurrency services to wealth management and Neobanking and many more.  As individuals across the globe increasingly embrace digital financial offerings, the demand for fintech services has experienced exponential growth. And It is evident that this demand will continue to expand, especially considering the vast number of users who have not yet stepped into the digital world. 

In essence, it is apparent that the fintech sector will continue its upward trajectory in the coming years, driven by the growing demand for fintech applications. The stats below clearly indicate that it will continue to grow exponentially in the forthcoming yearsHence, if you are considering entering the fintech industry, this may be the optimal time to strategize and begin the development of a fintech app. However, you may be wondering about the costs associated with creating a fintech app. In this article, we will comprehensively explore all aspects of the costs of fintech app development.

Let’s start by answering this question.

How much does it cost to develop a fintech app?

The short answer is that there's no fixed price. The cost of making a fintech app depends on several factors, like the features, the type of app, the tech stack, the goals, etc. Generally, it costs between $30,000 and $500,000. But it can vary depending on the app's scale and functionality.

Fintech apps come in all shapes and sizes, from banking solutions to payment apps. Let’s break down the fintech apps into different categories and then talk about their cost to make it clearer.

Types of Fintech Apps and Associated Cost

1. Banking Apps

Banking apps allow users to perform a variety of financial activities without having to visit a physical bank branch. Users can log in to Internet banking or use mobile apps to carry out banking tasks, such as:

• Account management: View account balances, recent transactions, and other account details.
• Fund transfers: Transfer money between accounts, pay bills, or send money to friends and family.
• Branch locators: Find the nearest bank branch or ATM.
• Account-related activities: Deposit checks, set up direct deposit, or order checks.
• Card management: View credit card statements, make payments or dispute charges.
• Applying for cards: Apply for a new credit card or debit card.
• Investment trading: Buy and sell stocks, bonds, and other investments.
• Loan applications: Apply for a loan, such as a mortgage or car loan.
• Security features: Set up two-factor authentication or other security measures to protect your account. 
• Financial management: Track your spending, set budget goals, or create a financial plan.

These are just some of the many features that banking apps offer. With a banking app, you can do all of your banking from the convenience of your own home or on the go.

2. Lending Apps

The lending industry is undergoing remarkable growth. Thanks to technology, which has addressed the shortcomings of the traditional system, which requires people to visit in person and go through manual processes. On the other hand, lending service providers with digital applications now offer loans with online verification processes, which significantly reduces the need for labor-intensive tasks.

The average cost of developing a lending app ranges from $50,000 to $400,000, depending on the features included. Some of the key features of a lending app include:

• Loan application: Users can easily apply for a loan through the app by providing their personal and financial information.
• Loan eligibility: The app should be able to quickly and accurately assess a user's eligibility for a loan based on their credit score, income, and other factors.
• Loan terms: The app should allow users to compare different loan terms, such as interest rates, repayment periods, and fees.
• Loan disbursement: The app should be able to disburse the loan amount to the user's bank account quickly and easily.
• Loan repayment: The app should allow users to track their loan payments and make payments on time.
• Customer support: The app should provide 24/7 customer support to help users with any questions or issues they may have.

• Personalized recommendations: The app can use artificial intelligence to make personalized recommendations to users about loans that are right for them.
• In-app chat: The app can provide in-app chat support so that users can easily get help from customer service representatives.
• Social media integration: The app can be integrated with social media platforms so that users can share their loan experiences with others.
• Rewards program: The app can offer a rewards program to encourage users to use the app and make timely payments.

The specific features that a lending app includes will depend on the target market and the goals of the lending service provider.

3. Investment Apps

These apps allow users to invest in various services, such as mutual funds and other types of investments. Users can invest in services, buy stocks, mutual funds, trading apps, cryptocurrency exchanges, and other apps that are all the rage. The cost of developing these apps ranges from $60,000 to $150,000 or more, depending on the features.

Here are some common features that you might find in an investment app:

• Account Management: Users can create accounts and update their personal information, including email, phone number, and other information. 
• Portfolio Tracking: The app allows users to monitor their investment portfolios in real time, including the performance of individual assets and overall portfolio growth.
• Buy and Sell: It allows users to buy and sell orders for various assets, such as stocks, bonds, mutual funds, ETFs, and cryptocurrencies.
• Research and Analysis: The app provides tools for conducting research on various investments, including access to news, financial reports, and market analysis.
• Watchlists: Users can create watchlists of assets they're interested in, making it easy to track their performance and receive relevant updates.
• Educational Resources: The app offers resources to help users learn about different investment options, strategies, and market trends.
• Performance Visualization: Graphs, charts, and reports help users visualize their investment performance over time.
• News and Alerts: The app sends notifications about relevant market news, asset price changes, and other events that might impact investments.

4. Mobile Payment Apps

With advances in technology and the growing popularity of contactless and digital payments, mobile payments are now commonplace.

Mordor Intelligence Research & Advisory. (2023, July). Mobile Payment Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028). Mordor Intelligence.

A recent report reveals that 66% of Americans believe that smartphone payments will eventually replace credit cards and cash. Speaking of mobile payments, it has come a long with the addition of new features to enable users to make payments to a local shop nearby them or for online purchases. Developing a mobile payment app cost ranges from region to region. Hoover,  the cost of developing mobile payment apps ranges from $40,000 to $300,000.

Here are some common features you might find in a mobile payment app:

• Registration and Authentication: Users can create accounts, set up usernames, and passwords and enable enhanced security methods such as two-factor authentication.
• Linking Payment Methods: Users can link their bank accounts, credit/debit cards, or digital wallets to fund transactions.
• Contact List Integration: Users can sync phone contacts to send payments to friends and family.
• QR Code Payments: QR codes for quick payments at physical stores or to other app users.
• NFC (Near Field Communication) Payments: To make contactless payments by tapping their phone against compatible payment terminals.
• Bill Splitting: Users can divide bills among multiple people and send payment requests to friends or groups.
• In-App Chat: Many apps include messaging features to communicate.
• Transaction History: A record of all past transactions, including payments made and received, with dates and amounts.
• Push Notifications: Real-time notifications for transactions, payment requests, and account activity.
• Merchant Payments: The app can be used to pay at physical and online stores that accept mobile payments.

5. Personal Finance Apps

These apps empower users by allowing them to meticulously track both their income and expenses, thereby facilitating informed financial planning. Developing a personalized financial app typically entails an investment ranging from $50,000 to $300,000.

Here are some common features you might find in a personal finance app:

• Expense Tracking: The app helps users record and categorize their expenses, offering insights into spending habits.

• Budgeting Tools: Users can set up budgets for different categories and track their spending against these budgets.
• Transaction History: A detailed record of all financial transactions, including income and expenses.
• Bill Reminders: The app sends notifications to remind users of upcoming bills and due dates.

• Income Management: Users can input and track their various sources of income.

• Debt Management: Users can input and track their debts, including credit cards, loans, and mortgages.

• Expense Analysis: Visual representations (graphs, charts) of spending patterns to help users understand where their money is going.

• Savings and Investment Tracking: Users can input and track their savings and investment accounts to monitor growth.

• Expense Categorization: Automatic categorization of transactions and the ability to manually categorize transactions.
• Financial Reports: The app generates detailed reports, such as spending summaries and income reports.

• Cash Flow Analysis: Tools to analyze cash flow and understand patterns in income and expenses.
• Syncing Bank and Card Accounts: Users can link their bank and credit card accounts to automatically import transactions.
• Investment Insights: Basic investment advice or insights to help users make informed decisions.

• Expense Goals: The user can set financial goals for spending categories and monitor progress.

• Cash and Credit Balances: Clear visibility into available cash and credit balances.

• Synchronization with Other Apps: Integration with other financial apps and platforms for a financial overview.

• Educational Resources: Tips, articles, and resources to improve financial literacy.
• Family Sharing: Many apps allow multiple users within a household to share and manage finances collectively.

Exploring Additional Variables Influencing the Cost of a Fintech App

Also Read: Fintech Trends to Watch in 2023

Fintech Application Development Challenges

Developing a fintech application comes with its own set of challenges, given the complex regulatory environment, security concerns, and user expectations for seamless experiences. Here are some key challenges faced in fintech application development:

Regulatory Compliance

Fintech applications need to comply with various financial regulations and standards, such as KYC (Know Your Customer), AML (Anti-Money Laundering), GDPR (General Data Protection Regulation), PCI-DSS (Payment Card Industry Data Security Standard), etc. Ensuring compliance adds complexity and may require continuous monitoring and updates.

Security

Security is paramount in fintech applications due to the sensitive nature of financial data. Challenges include protecting user information, securing transactions, guarding against fraud, and adhering to data protection regulations. Implementing robust encryption, authentication mechanisms, and regular security audits are crucial.

Scalability

Fintech applications must handle varying loads, especially during peak times. Scaling infrastructure and architecture to accommodate growing user bases, increased transactions, and new features without compromising performance is challenging. Cloud services and microservices architecture can help address scalability concerns.

Integration with Legacy Systems

Many financial institutions operate on legacy systems that may not easily integrate with modern fintech applications. Bridging the gap between old and new systems while maintaining data integrity and security can be a significant challenge.

User Experience

Fintech users expect intuitive, responsive, and secure experiences across multiple devices. Balancing complex financial functionalities with simplicity and ease of use requires careful design and testing. Providing personalized recommendations and insights can also enhance the user experience.

Data Privacy

Fintech applications collect and process vast amounts of personal and financial data. Ensuring data privacy and protection in compliance with regulations while leveraging data for insights and personalization is a delicate balance. Implementing privacy-by-design principles and transparent data handling practices are essential.

Customer Trust and Adoption

Building trust among users is critical for fintech adoption. Communicating security measures, being transparent about data usage, and providing excellent customer support can help gain user trust. However, overcoming skepticism and changing user behaviors, especially in conservative financial sectors, remains a challenge.

Technological Complexity

Fintech applications often involve complex technologies such as blockchain, AI, machine learning, and big data analytics. Integrating these technologies seamlessly, maintaining interoperability, and staying updated with emerging tech trends require significant expertise and resources.

Cost Management

Developing and maintaining fintech applications can be costly, especially considering regulatory compliance, security measures, and infrastructure requirements. Effective cost management strategies, such as cloud optimization, agile development methodologies, and outsourcing non-core functions, are crucial.

Market Competition

The fintech landscape is highly competitive, with both startups and established players vying for market share. Differentiating your application, offering unique value propositions, and continuously innovating to stay ahead of competitors are ongoing challenges.

Addressing these challenges requires a multidisciplinary approach involving expertise in finance, technology, regulation, design, and user experience. Additionally, staying agile, adaptable, and responsive to evolving market dynamics is essential for long-term success in fintech application development.

Fintech App Development Cost Factors

• The App Requirements

What the App Does: This means all the things the app can do. If the app can do lots of things, it needs more work and time to be made. If it does more, it takes longer to finish.

How Hard It Is: This is about how tough the app's idea is. The harder it is, the more work it needs to be built, checked, and put out there. If the idea is tricky, it takes more time and effort.

• UI/UX Paradigm

A well-designed app is essential for success that makes it easy for users to navigate its features. A meticulous UI is created with care and attention to detail, from the font selection to the use of language and white space. This results in an effective user experience that allows users to quickly and easily find the information they need. The complexity of UI can affect the cost of the app.

• Development Partner's Locale

The geographic location of your chosen development partner has a significant impact on the cost of financial app development. This is because the hourly rates of developers vary depending on the country. For example, a FinTech application specialist in the United States typically charges more than their counterpart in India.

• Development Time

How fast a FinTech app is made really affects how much it costs. If the app is quickly planned and built, it means everyone has to work closely together. So, if you want the app done quickly, it can end up costing more. The time it takes to develop the app also depends on what kind of financial app it is.

Conclusion

In this article, we explored the world of FinTech, and talked about its remarkable growth and the myriad opportunities it holds. The dynamic nature of this industry highlights the vast potential it offers. We also explored the varying costs associated with different types of FinTech apps, showing that possibilities abound in this expanding sector.

Got a FinTech app idea? Let's talk.

We're a team of experienced FinTech developers who can help you bring your idea to life. We can help you with everything from idea validation to app development and deployment. Contact us today to learn more about how we can help you with your FinTech app development project.