Fintech is the new buzzword that is steadily becoming a part of every person’s life, touching on personal finance, insurance, banking, and investing. It is not only beneficial, but essential for the companies interested in the further development of this field to keep up with the latest discoveries.
The current advance in technology and the alteration of the rules on the industry have contributed to the growth of the fintech business. Besides the basic services of accepting deposits and providing loans, it has expanded its services to include insurance, payment, investment and other personal financial services.
Let’s quickly examine some of the newest developments and applications that will be used in financial software development services in 2024-2025.
Rise of Open Banking
Open banking refers to the use of open APIs and data sharing to enable third-party developers to build applications and services around financial institutions. By opening up previously closed banking infrastructure, the financial industry aims to drive more innovation.
In 2024, open banking adoption will accelerate globally, driven by regulations such as PSD2 in Europe and open data initiatives in North America, Australia, and Asia Pacific. More banks will invest in open API platforms and developer portals to attract partners. This will expand the FinTech ecosystem and bring new products and services to market faster.
Neo-Banking
The financial banking industry has also taken the epidemic seriously, and it has demonstrated that we can accomplish everything at home. Neo-banking has become more popular due to FinTech. Neo-banks are fintech-based technological institutions that resemble regular banks but lack physical branches.
- Neo-Banks come with every feature seen in conventional branch banks. Unlike conventional branch networks, the Neo-Banking model is the exclusive focus of a large number of recently established FinTech enterprises. The solution presented benefits both the client and the business because of the lower expenses and easier access to data.
- One type of fintech company that exists to reduce banking expenses is a Neo-Bank. Neo-Banks concentrate on these particular areas to raise the caliber of their services, in contrast to larger banks that provide more services.
Proliferation of Embedded Finance
Embedded finance integrates financial services such as payments, lending, and investments into non-finance digital environments. For example, it enables customers to apply for loans when checking out from an e-commerce store.
The embedded finance market is forecasted to grow to USD 251.5 billion by 2029 from USD 115.8 billion in 2024. Software developers will play a key role as more businesses look to embed financial capabilities to drive revenue and loyalty. Developers with expertise in areas like digital wallet integration, identity verification, and data analytics will be in high demand.
Cloud Adoption Reaches New Heights
By 2025, 85% of organizations will be “cloud first” for hosting infrastructure, leveraging data analytics, and enabling collaboration. Software developers will need strong cloud architecture and data engineering skills to build highly scalable and secure FinTech applications in the cloud.
Key drivers of increased cloud adoption include faster time-to-market, lower costs, higher productivity, and compliance benefits. Migration to the cloud also enables the usage of bleeding-edge technologies like AI, blockchain, and quantum computing. Legacy modernization will be an important focus area for banks and insurers.
Evolution of Blockchain and Web3
While the hype around cryptocurrencies and NFTs dominates current Web3 conversations, enterprise blockchain adoption will see steady progress in finance.
On the software development front, we will witness further tooling and framework maturation for building decentralized applications. Developers with hands-on smart contract coding experience will be sought after as blockchain is deployed for security settlement, trade finance, cross-border payments, etc. Interoperability solutions will also gain traction.
Fintechs Embrace Low Code / No Code
To compete for top talent, address faster release cycles, and offer rich customer experiences, FinTechs will accelerate the adoption of low-code/no-code development platforms over the next few years.
Low-code platforms utilize visual, configuration-based app building with minimal hand-coding. No-code platforms, on the other hand, require zero coding through pre-built templates, drag-and-drop interfaces, and AI-assisted development.
With citizen developers and less specialized skills now empowered to build apps, FinTech engineering teams can focus more on complex platform infrastructure, integrations, and specialized capabilities like ML.
Conversational Banking with Voice and Chatbots
Currently used in customer service, conversational AI will become the core of digital banking in the next few years. The generative AI and NLP have evolved significantly in recent years, and the development of more human-like interactions is now possible.
Banks will spend significantly on developing intelligent chatbots and voice assistants to offer recommendations, anticipate customers’ needs, explain products, facilitate contactless identification and payments, etc. Developers will have to use new NLP libraries and frameworks to design human-like conversational interfaces.
Focus on ESG and Sustainability
Environmental, social responsibility, and governance (ESG) factors are being integrated into FinTech products and services due to stakeholder capitalism and the young generation.
Some of the subthemes will be carbon tracking cards, green robo advice, social trading, financial inclusion for the underbanked, ethical lending, and diverse VCs. Software developers will have to consider sustainability measures as part of the systems’ architecture.
Platform Engineering and DevOps Transformation
As FinTech engineering teams scale up to manage complex cloud platforms and unreliable legacy systems, software delivery challenges plague productivity. Manual processes, lack of collaboration, insecure credentials, and testing bottlenecks often obstruct development velocity.
Leading FinTechs will invest in platform engineering, CI/CD automation, and DevSecOps capabilities powered by developer self-service portals, low-code workflows, value stream mapping, and advanced AIOps. With robust DevOps, FinTechs can securely achieve higher software release frequency.
Talent Shortage Drives New Partnerships
The explosive growth in FinTech has led to a huge demand-supply gap for skilled technology talent. Attempts to lure talent with high pay in concentrated hubs have had limited success. While reskilling existing employees is an option, realistically, most FinTechs will need external partners to access specialized skills.
Strategic IT partnerships with global systems integrators, niche technology consultants, and offshore development centers will be crucial for FinTechs to accelerate product development. Co-innovation programs with academic institutions and startups will also uncover new ideas. Mergers and acquisitions of smaller FinTechs will continue.
How Fintech is Shaping the Future of Accounts Payable(Opens in a new browser tab)
Conclusion
Fintech software development is on the right track to become the convergence of innovation, technology and global financial systems. In the following projections and future technologies, the world economy and the future of financial services show the influence of fintech.
Since they have become versatile and employ advanced technology in their operations, fintech firms are posing competition and hence challenging traditional financial institutions. This change is leading to the provision of efficient and easily accessible international financial services. The application of fintech in sustainability, moral investing, and strong economic growth will continue to be more important in the future. This serves to bring out the fact that it is not only finance that is created in the industry but also the overall social and economic welfare.
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