Key Considerations When Developing Personal Finance Apps

Economic meltdowns act as a sort of silver lining giving rise to new approaches that serve to improve the overall state of the financial industry. Financial apps are in hot demand because people prefer to do things digitally as much as they could in the current pandemic-stricken society. Personal finance apps in particular help to acquire greater control over your finances and life in general and are an attractive option for entrepreneurs who want to introduce a promising product to the thriving market. Still, there are challenges that make personal finance app development special. We are going to look into those and see what to keep in mind if you’re planning to try your hand at financial application development. 

If you want to get a more general perspective on the subject, explore our guide on how to create a personal finance app.

Essential functions of money management apps

Keeping your budget in line is both easy and hard at the same time. 

Jokes aside, there are just too many personal budget challenges to juggle. This is why many people seek help in technology, especially now. As of 2023, there are approximately 30,000 fintech startups. The rapidly expanding market is expected to reach $174 billion by 2023. It is expected to grow to $188 billion by 2024. The largest fintech company is Visa, it has a valuation of about $500 billion USD.

Using an app for finance management is very convenient. Their primary functions are:

• Cost accounting with tips on ways to save money.
• Analysis of financial habits with personalized advice.
• Smart digital piggy bank with flexible settings.

Thanks to personal budget apps, you can easily control your finances and view statistics for the chosen time period. What’s more, some of the more advanced budgeting solutions can help you, well, budget. They are customizable and can have the added functionality of “knowing” about stocks, bonds, funds, and other investments, and can deal with different currencies and cryptocurrencies, and do a bunch of reports. And at the same time, they remain simple and convenient, otherwise, they wouldn’t have been used.

Top tips to help you with personal finance app development

More opportunities mean more vulnerabilities. Users seek functionality but advanced functionality also means the necessity to pay closer attention to details. Have you ever wondered why some finance management apps can fail to help people? Some of the reasons are totally avoidable.

Data security is a top concern

If you plan to develop a linked app, that is, an app that draws all the information about expenses automatically, it will have to interact with banks, so you, in turn, have to ensure security by spending enough time to develop a server system with all the necessary firewalls and proxies.

The most pressing challenge of any financial app developer is concerns related to data security. Financial products are all about trust. Cultivating user trust and demonstrating that you’ve taken care of security concerns is the cornerstone of financial software development.

“Are money management apps safe?” is perhaps the most frequently asked question when people think about starting to use one. Data security is needed everywhere but in the case of financial apps, its importance becomes paramount. This is understandable of course, as financial institutions are one of the main targets of cybercriminals. Often people willingly accept that this or that app has the potential to seriously improve their life but avoid using them because they fear that their data like banking IDs and passwords, details of credit and debit cards, PIN or CVV numbers would end up in the wrong hands.  Still, in comparison with previous years, fintech companies’ security increased comparatively up to 23.6%. That’s why any financial app developer has to pay serious attention to the information security of their product both at the design and at the development stages of its development. 

Add additional security layers to your app. It might be encryption, fingerprint identification, two-factor authentication, or iris scanning. Only the required amount of data needs to be stored on a mobile device. This data should be requested from the server only while working with the application and should be deleted after completion of the work.

New technologies

Today’s consumers expect a lot more from apps than before without even realizing it. The finance industry cannot afford to live in the past, not for any reason. New technologies are considered the backbone of FinTech applications. The success of a FinTech software product largely depends on whether it can quickly provide an advantage to its users in the ongoing digital modernization process. Ideally, every new solution has to offer something new in terms of technology. Not necessarily something revolutionary but it has to run faster, work smoother, and possibly cover more functions at the least.

When considering what technology to use for your financial project, think of things like artificial intelligence or blockchain. Blockchain can help you with record-keeping, and artificial intelligence can be used for purposes such as personalized recommendations, data analysis, customer interactions, etc. Some examples include adding voice commands which couldn’t be more fitting than in the case of personal finance applications. After all, what can be more convenient than to get rid of boring manual data entering in favor of doing it verbally on the go? 

Consider the capabilities of AR and VR and how you can apply them. The development of applicable AR and VR in FinTech is only beginning. Some experts think that innovative banks and FinTech companies that are the first to learn and deliver a blended experience for their users will be the true pioneers in the new banking reality after the widespread adoption of mixed reality devices. 

Ensure legal compliance

The financial industry is one of the more highly regulated ones. It’s worth remembering about frequent changes in financial legislation and the constantly updated body of legal norms. And for the application to meet all the requirements, app developers must ensure that it interacts properly with both other software components and with legal requirements.

Developers of financial software have to account for various global financial regulations and institutions. Take the increased awareness of the value of data in the digital economy, depending on where your users are situated. For example, there is the GDPR regulation which provides residents of the European Union with the opportunity to manage their personal data, so you have to tell them about the purpose of processing, where the data is going to be stored, and how, if necessary, it could be deleted. 

Stimulate interest beforehand

Take time to prepare your target audience and investors for your project, and give them a reason to trust your idea and vision. Don’t underestimate the power of pre-launch marketing. It may come as a surprise, but the most popular personal finance app Mint owes its initial success to its content marketing strategy, having created the most popular blog on personal finance recommendations even before it launched its famous app. They prompted visitors to sign up to get notified when the app was to launch and got more than 20K of such subscribers. The stock-trading and investment app Robinhood got even further. Thanks to their strategy that involved a referral priority program, they got an astonishing million users waiting to use the service before it even launched.

Pay special attention to UX

It’s a valid point for any kind of app, of course, but in a financial situation where digital-only is the new norm, it is of truly vital importance. Users won’t be giving you a chance to provide them with a better experience, they will sooner go and find the superior one elsewhere. What the COVID-19 pandemic proved is how technology-dependent we are and what power the digital world has upon us. Even before, the majority of millennials preferred to not personally interact with a financial institution altogether and there is data that tells us that 40% of them would rather interact with a robot advisor using their app than with a human being in a bank outlet. Gen Z is even more pro-digital and mobile-oriented. So there will be more quality products and the competition is going to be even more intense. 

Choose freemium over ads

The majority of apps for personal finance are free, yet they all successfully make money. When choosing a monetization strategy for your free app, it might be wiser to prefer freemium over in-app ads, though the latter seems to be the most lucrative option nowadays. As a matter of fact, though people may be used to seeing ads in games or lifestyle apps, they don’t usually like witnessing them in their financial applications. Ads make them look less secure and more spammy. A freemium strategy might be a more viable option in the case of personal finance app development. For example, you can offer a basic version of your app and a plan with additional paid features. You can also provide paid personal consultations or use other methods. For example, Mint aggregates and de-individualizes all the financial data it collects and then sells these data to banks, credit card companies, and other interested parties for a fee. The data is anonymous so they don’t violate any law.

Target a specific audience

Yet another personal finance app? You are likely to hear something of this sort when introducing your solution. What’s more, it’s hard to compete with such giants as Mint or YNAB that offer generalized solutions. The way out may be to consider catering to a specific audience. For example, a lot of people are interested in personal finance apps that allow you to create joint bank accounts with your partner or to track all of a family’s finances from one digital solution. Judging by the number of queries of this kind that consumers put into Google, it might be a pretty promising option on the way to differentiating you from the competitors. 

Apply a thorough testing

Financial software is considered a product with complex business logic because it manages and processes important user data, which is also confidential (credit card information, social security numbers, etc.) as we mentioned earlier.
And since a number of vulnerabilities, especially those related to the application logic, cannot be foreseen to any substantial extent, it’s recommended that you thoroughly test the apps you develop, and their protection mechanisms, not forgetting about performing an analysis of the source code.

To sum up

The goal of FinTech apps is to help users with financial matters as easily as possible. The FinTech industry is growing every year and becoming more and more influential. From 2019 to 2023, the number of FinTech startups doubled. It is logical that the more finance aids there are and the more sophisticated and multifunctional they become, the competition grows, and hence the requirements for the quality of services. Becoming a leader takes introducing something new and valuable. However, the first step is to master the basics. You have all the chances for success in the field of personal finance app development if you apply the tips above and focus on your audience.

Contact us and we’ll help you get the job done. We select team members according to your needs. Also, our app development company can recruit more specialists and even create an IT department to work solely on your project.

Further reads on personal finance app development:

• • Creating a Personal Finance App That People Will Want To Use
  • What Makes Now a Great Time to Build a Personal Finance App