Custom Financial Software Development Simplified: A Guide for BFSI Leaders

However, developing software is more than creating a digital platform. There is too much behind the scenes, including customer security, future expansion of digital services, and integration with legacy and modern applications. Clarity and complete knowledge of developing custom software can help financial institutions like yours deal with these challenges without getting lost in the ocean of complexity and compliance.

As a financial software development company, we have created a handy guide to help you build software solutions with clarity and confidence.

The First Step: Know Your Software 

There is software for everything from accessing banking services, applying for a home loan, 

managing personal finance, and buying and selling stocks. There are millions of needs and billions of applications. 

Deciding what type of financial software you need seems a challenge. But it all begins with understanding available solutions, what they do, and how they would benefit you. The first step in our guide to developing custom financial software is getting an overview. 

1. Account Origination Systems

Onboarding new customers or clients involves a series of processes and verification. Your team goes through a back-and-forth process to double-check that they are doing business with the right people. Paperwork, identity verification, and background checks are all necessary but time-consuming, which sometimes causes delays in onboarding or skips red flags. 

Additionally, only some customers like to walk into banks. GenZ customers, especially, have a big appetite for digital processes. However, adopting the digital process is only part of the battle to acquire today's customers. Good digital experience matters, too. 

The account origination system balances speed and experience by automating and integrating multiple touchpoints for smooth onboarding. 

Discover how we helped a leading Canadian fintech provider enhance member onboarding, account management, and instant loan approvals with an advanced omnichannel solution. Click to know more.

2. Compliance Monitoring Tools

A compliance monitoring tool is a must-have system for every bank. Why? Wells Fargo's tales of compliance failure have the answers. America's multinational financial services company lost billions of dollars in penalties and ruined its reputation by repeatedly applying for loan payments incorrectly. Since 2016, the bank is under the clean-up process.

Use an AI tool for compliance monitoring to prevent this trouble. It periodically assesses risks, tracks compliance metrics, and gives real-time alerts when any department operates against regulatory requirements. 

3. Lending and Loan Origination Software

The mortgage lending landscape is taking a digital shape rapidly. Everyone from mid-tier banks to credit unions is adopting digital loan origination solutions to combat manual inefficiencies and high abandonment rates. 

Lending and loan origination solutions put mortgage providers into hyper-automation gear. They automate the entire lending lifecycle, from loan origination, underwriting, disbursement, and repayment across multiple channels. 

4. Payment and Money Transfer Apps

Customers want superfast and secure platforms to send and receive money, whether within domestic borders or outside them. Payment and money transfer apps are a good way to cater to this category of customers.

These apps have features such as instant fund transfers, adding multiple bank accounts, setting up secure codes for initiating transactions, and account verification. PayPal, Google Pay, and Zelle are a few examples of payment and money transfer apps.

5. Digital Wallets

Digital wallets save users from memorizing their bank account and card details to make payments. They store the details on users' devices and allow them to pay with one with one click. Beyond payments, digital wallets give customers loyalty points for using their applications frequently. 

They can convert the points into cashback or get discounts using points by shopping from the partnered online stores. 

6. Personal Finance Management Apps

These are very important finance applications for every bank, as their customers need help accessing banking services and managing their finances. 

Personal finance management apps help individuals track spending, create budgets, and set savings goals. Some also offer insights into financial habits and recommend the best way to save their hard-earned money. 

Read how to develop a personal finance app like Mint. 

7. Investment and Trading Platforms

These platforms are built for targeted customers who buy and sell stocks, bonds, cryptocurrencies, and other monetary assets. Users can open various brokerage accounts through these platforms, get real-time updates on stocks, and manage their portfolios.

Advanced platforms use AI to assess trading risks and recommend the most profitable financial instruments to buy or sell. Some tools also have robo-advisors who give personalized insights to customers on portfolio management based on their risk tolerance and financial goals.

The Second Step: Know the Key Features for Custom Fintech Software 

We understand you want the software to be the best for your bank and customers. But merely adding the best features won't ensure success. For example, a voice search feature might be the best feature for some software, whereas a custom dashboard might be useful for others. 

The final choice relies on what you are developing. But for a start, you can go with the most in-demand features in custom fintech software development:

1. QR Code Payment
2. Voice Integration
3. Multi-Factor Authentication (MFA)
4. Real-Time Transaction Processing
5. Data Encryption and Security
6. Multi-Currency Support
7. AI and Machine Learning for Insights
8. Fraud Detection and Prevention
9. Automated Alerts and Notifications
10. Dashboard for Advanced Analytics and Reporting
11. Cross-Platform Accessibility
12. Chatbots and Customer Support Automation

The Third Step: Learn About Mandatory Compliance

Compliance is non-negotiable in any industry. Certain laws at the local, global, and international levels must be abided by for friction-free operation. Even a small violation can prove disastrous, bringing penalties, fines, and legal consequences. Ensure your bank or financial institution never faces these adverse impacts, although it's complicated considering these laws keep changing.

Therefore, hiring financial software developers who understand the nuances of compliance is important. Their understanding determines whether they are capable of doing this complicated development or not. Below are the primary compliance requirements that your development partner in the USA must know:

1. The Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) Laws
2. The Dodd-Frank Wall Street Reform and Consumer Protection Act
3. The Payment Card Industry Data Security Standard (PCI DSS)
4. General Data Protection Regulation (GDPR)
5. The Gramm-Leach-Bliley Act (GLBA)

The Fourth Step: Know What it Takes to Build a Great FinTech Software

To stand out in the crowded BFSI space, your fintech software needs more than just functionality-it must deliver value. These non-negotiable features bring that value:

• User-Centric Design: You can impress and acquire more customers with pixel-perfect and mobile responsive design. 
• Advanced Security: The financial sector is a prime target for cybercriminals. Make sure your software does not become a host for those attacks. Add robust security features (multi-factor authentication, end-to-end encryption, etc.) to protect your customers, their financial information, and your business at all costs.
• Real-Time Data Processing: Whether you are tracking stock prices or processing payments, real-time functionality is essential to ensure accurate and up-to-date transactions.
• Compliance at Every Step: The global nature of financial services means that compliance with regional laws is vital. Your fintech platform should be built to adhere to international standards.
• Scalability: Custom financial software development is a one-time investment, but it does not have to be built around current scenarios and needs. The software must have enough space and capabilities for future growth and new customers without any performance lag. 

The Fifth Step: Search for the Right Development Partner

The kind of people you work with matters more when developing business-critical and security-focused software. Because your business and customers are at stake in the digital landscape, especially when competitors and cyberattacks are growing daily. Therefore, you should be wary of whom you hand over the development project to. 

Three things in your checklist confirm that you are with the right software vendor. 

• Expertise in Fintech: A software company that knows about financial software ins and outs, mandatory compliances, diverse challenges of the BFSI sector, and customer needs is the ideal partner.
• Support for Innovation: They should be the development partner and the supporter of your success. If they are highly invested, passionate about technologies and emerging trends in fintech, and can incorporate them into your software, go for it. 
• Ongoing Maintenance: Development is half the work done; what happens after that is the real deal. Your software may start lagging, or a small technical issue keeps pushing your customers away. Finding a new vendor for software maintenance is additional work, and don't forget the cost it brings. An ideal partner will not leave you with challenges; they take responsibility for post-development issues and support you. 

Your Custom FinTech Software is Just a Click Away!

Softude is a seasoned custom software development company with 18 years of experience. We are the trusted partner of over 900 global businesses, including credit unions, financial institutions, and top-tier banks. We have delivered diverse fintech software, from loan origination solutions to KYC integration, e-wallet apps, and custom banking solutions. Contact us today for more details or explore our full range of services for BFSI. 

Conclusion

As the U.S. banking sector increasingly embraces digital technologies, the demand for custom financial software will never end. Whether it's a new payment system or an AI-powered investment platform that you need, a custom approach is a sure shot to your success and safety. It perfectly balances the demands of today's digital-first customers and your needs. 

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