Competing in a high-risk, high-reward sector has become a challenge, and financial service providers are constantly looking at how a banking software development company can help them lead the market again. Outdated banking software solutions also drive providers to develop banking applications.
McKinsey reveals that the average age for core banking systems is 14 years while insurance companies have an average age of 18 years for IT infrastructure. The right software development partner can help banks digitally transform and evolve systems, but discover how, why, and which services to use.
What Is Banking Software Development?
Finance software development involves developing, deploying, and integrating seamless digital solutions that streamline payment processing, mobile banking solutions, investment portfolio management, document management, and financial reporting for industry compliance. Ultimately, financial services software development should streamline all technologies related to banking.
The Importance of Banking Software Development
Compliance is the core factor driving every new software development process in financial industries. However, we’ll focus on compliance in our complete guide to financial software development. Recent research on the impact of digital transformation on the banking sector found the potential for the following opportunities and benefits:
- The 24/7 availability of services to customers enhances customer satisfaction and retention.
- A personalised customer service could expand the reach with custom recommendations.
- The bank leverages lower overheads and operational efficiency with automated processes.
- Instant banking services satisfy the instant gratification culture of today’s customers.
- Enhanced productivity and automated compliance reporting promote business continuity.
When Do Financial Institutions Need Software Development?
The banking system software market size is projected to reach a staggering £46.49 million by 2030! Knowing when to adopt cloud computing service models and transform legacy systems into new platforms will help banks remain relevant and competitive. Here’s when to develop software:
- The technology complexity and compliance standards overwhelm an in-house IT team.
- If the financial institution’s expenses don’t fit into the budget anymore.
- When banks feel pressured to deliver innovative solutions to customers.
- If the institution faces legal, technological, legacy system, or security issues.
Different Types of Banking Software Development Services
Core Banking Systems and Upgrades
Outsourcing software development to expert teams allows banks to build robust core banking software solutions, complete with advanced banking management systems, fraud detection tools, secure payment gateways, and customer-facing applications such as mobile banking apps — all designed to streamline operational efficiency.
Mobile Banking Solutions
Deliver innovative mobile banking solutions to customers to enhance the experience with intuitive interfaces and secure user authentication models. Professional teams also develop mobile banking apps that integrate seamlessly with core software solutions for cutting-edge accessibility on the go.
Online Banking Websites
Optimise, upgrade, or develop online banking websites from scratch with experienced developers who understand the latest online banking security protocols, UI/UX design to upgrade websites and online platforms to dynamic experiences, and the integration of a mobile banking application.
ATM Software Solutions
Software development services include the development, optimisation, and integration of ATM software, allowing traditional banks and online platforms to provide easy and secure access to cash. Other services include ATM hardware integration, monitoring systems, and migration solutions.
Payment Processing Optimisation
Enhance payment software for seamless financial transactions in any banking software product with optimisation services that streamline communications between merchant websites, mobile banking apps, and payment processing networks while integrating data encryption and recurring payments.
FinTech Software Development
Leverage e-solutions and FinTech products with services that seamlessly integrate e-money solutions into core banking systems, including e-money issuing or distribution, e-wallets, currency exchange services, debit or credit transfers, encrypted account information, and withdrawals.
Loan Management Platforms
Bring teams to a loan management financial software development project to deliver loan management solutions with integrated loan origination, loan servicing, credit scoring, fraud detection, underwriting, collections management, portfolio management, and interest rate calculation tools.
Investment Solutions
The banking sector can leverage integration services to add investment solutions to core banking systems and mobile banking apps. Add risk management, order management, algorithmic trading, financial analysis modeling, investment accounting, and real-time data analysis dashboards.
Insurance Software Solutions
Bespoke insurance software solutions easily connect with third-party resources and can feature as many user personas as the product needs. They also integrate claims processing, underwriting, policy management, CRMs, and reinsurance systems into insurance platforms.
Tax Software Development
A financial service provider can enlist expert programmers to develop tax software with seamless integrations for tax return filing or submissions, tax calculation or preparation, government bodies for multiple tax jurisdictions, document management, and automatic reporting and analytics.
Administrative Management Software
Streamline data management and customer relationship management with a program designed to automate administrative tasks and processes within core banking software solutions. Add advanced technologies like chatbots to handle customer queries 24/7 for added satisfaction and retention.
Banking Document Management Software
Partner with financial software developers to automate document management in any financial industry. Expert teams create a platform that integrates with core banking software solutions while automating the storage, security, management, and reporting of sensitive financial documents.
A Complete Guide to Banking Software Development
Understanding every aspect of software development for banks and financial institutions will help financial service providers choose the right software development company, ensuring compliance, seamless operations, and streamlined core banking systems or mobile banking solutions.
Key Features of Banking and Finance-Related Software
Financial software development services must provide financial institutions with the key features of banking applications, whether developing mobile banking apps, administrative management tools, payment processing platforms, or core systems:
- Security: A reliable banking software development company will reinforce the software solution with extensive security protocols and authentication tools to ensure data privacy and security.
- User-Friendly Interface: UI/UX designers must ensure all customers and employees within financial institutions can easily access and interact with the banking system software.
- Growth Potential: A custom software development company will allow banks and financial institutions the opportunity to grow, scale, and broaden their reach.
- Instant Processing: Developers must provide software solutions and payment processing platforms for fast banking transactions, with instant transactions being the goal for some systems.
- Compliance: Any banking software development company must understand and implement the regulatory standards for cybersecurity and data privacy in all banking solutions.
- Seamless Integrations: Developers must ensure that core banking systems integrate seamlessly with internal and external software tools, management platforms, and mobile banking apps.
Core Technologies for Financial Software Development
A trusted software development company will use core technologies to build web or mobile banking apps, often integrating the latest technologies like machine learning and artificial intelligence. Other common technologies include blockchain and cloud computing with some security tools.
Cloud Computing
Cloud computing is the cornerstone of modernised core banking systems. Three core cloud computing service models are implemented in the industry, including Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS).
Blockchain Technology
Partner with a software development company that ensures seamless blockchain technology development with smart contracts for secure and anonymous financial transactions across borders. Blockchain technology welcomes secure and instant transactions on a decentralised network.
Cybersecurity Protocols
Cybersecurity technology and protocols include multi-factor authentication, fraud detection tools, data encryption, access control, DDoS protection, biometrics, end-point security, automated incident response tools, continuous monitoring software, and penetration testing tools.
Artificial Intelligence and Machine Learning
Artificial intelligence and machine learning play vital roles in finance software development. Our artificial intelligence consultants can recommend integrations, while our machine learning app development can help clients in the banking sector leverage financial data analysis to customise user experiences.
Common Technology Stacks for Banks and Financial Providers
- Backend Tech: C++, Django, Express.js, Flask, Java Spring, NestJS, .NET, Python, and Ruby.
- Frontend Tech: Angular, HTML/CSS, JavaScript, PWA, React.js, Svelte, TypeScript, and Vue.js.
- DevOps/Cloud: AWS, Azure, Conan, DataDog, Docker, GitHub, Google Cloud, and Kubernetes.
- Databases: Cassandra, Maria DB, MongoDB, MySQL, Oracle DB, PostgreSQL, and SQL Server.
- Web 3: Arbitrum, Chainlink, Ether.js, EVM, Hardhat, Moralis, OpenZeppelin, Truffle, and Web3.js.
- Artificial Intelligence: Caffe, Chainer, CNTK, DL4J, Open CV, and Theano.
Challenges Facing Financial Software Development and Tips to Overcome Them
Core banking systems, mobile banking apps, and financial software solutions must comply with various regulations, focus on consumer expectations, and seamlessly integrate with legacy systems, which a new software development company may struggle with when developing banking software.
Regulatory Compliance
Financial reporting and regulatory compliance are key challenges for some banking software developers, particularly freelance developers and uncertified programmers. Ensure that core banking systems and other banking software complies with regulatory standards to prevent issues:
- Core banking system security standards include the General Data Protection Regulation (GDPR), PCI DSS security standards (SDP, CISP, and AIS), e-Privacy laws, and PA-DSS standards.
- Banking software must also comply with digital signature regulations like the AES, AES-XTS, EIDAS, PADES, NIST, QES, SES, and SEPA regulatory boards.
- Other financial regulations to consider include the AML/CFT, AMLD, MIFID II, MIFIR, PSD2, and MIFIR standards, which also require finance software development with automated financial reporting and other core tools that streamline compliance in the banking industry.
Integration with Legacy Systems
Another key challenge in finance software development is the integration with legacy systems because some older banks and financial institutions use outdated systems with ancient programming languages and frameworks. Integrating new mobile banking apps or software becomes an obstacle.
Cloud computing can resolve the interoperability issues between legacy and new systems. The International Banker claims that 44% of financial institutions have adopted cloud computing technologies by 2023. Use financial software developers with cloud experience to overcome the issue.
Customer Experience
Finally, a banking software company must focus on customer expectations to enhance the customer experience before they develop software for financial institutions. Research shows that customer experience in FinTech is integral to successful finance software development and deployment.
Financial software developers who fail to meet customer expectations could already set banking software products up for failure before they hit the market, whether a company in the banking industry develops mobile banking apps, e-wallets, accounting software, or core banking systems.
The Banking Software Development Process Explained
Partner with a banking software company that uses a step-by-step process while implementing Agile methodologies and streamlined collaboration with banking clients.
1. Project Planning for Financial Institutions
A financial software development project requires comprehensive planning to define the project scope. Project managers define the budget, milestones, deadline, and goals during the planning phase to clarify the project scope for stakeholders. Some project managers use a feasibility study at this stage.
2. Banking Software Requirements Engineering
A business analyst steps in at the requirements engineering phase to define the specifications of products for banking services or the banking industry. The analyst will gather functional and non-functional requirements before using requirements analysis to prioritise and document the results.
3. Software Design and Architecture
Designers and developers collaborate to design the software architecture, user interface, and user experience for financial software solutions using the latest and most secure tech stack based on the software development requirements specifications document (SRS) from the project manager.
4. Prototyping the Software Solution
Developers start prototyping the banking software for core banking systems to ensure the architecture and requirements will protect the financial data and operate as planned. Mobile developers may also create wireframes for mobile app development and early usability tests.
5. System Development and Integration
Software engineers start developing banking services and software solutions by writing the code, conducting unit tests or code reviews, integrating secure APIs and core banking system connections, and adding functional features and security protocols to create a working application or software.
6. Software Quality Assurance Testing
Quality assurance experts or QA engineers will thoroughly test the software or services for core banking systems with comprehensive software testing methodologies to ensure it meets the quality standards. The QA specialist may implement database, integration, functional, and security testing.
7. Financial Software Deployment
Software engineers will deploy the mobile banking application or core banking system upgrades to a live environment, allowing banks to provide their customers with a functional product. The engineers may also deploy banking products to cloud environments if clients choose cloud computing.
8. Ongoing Maintenance and Support
Mobile banking, online websites, and core banking require ongoing support and maintenance to reinforce security with new protocols and identify any potential cyber threats. Reliable developers will provide ongoing support and maintenance services for all digital banking products.
Streamline Financial Software Development With Pulsion
Why should banks use our outsourcing software development services or custom software development company to build and upgrade financial products? Here are the benefits of using our development team to build finance software, a web-based banking app, or use our mobile app development company services.
Expertise and Experience
Our diverse range of experts offers various services to the financial services sector. Develop software with a team that has served many clients and successfully completed various case studies. We’ve delivered excellence in web, software, and mobile app development for 30 years.
Emerging Technologies
Innovative solutions in the finance sector begin when companies use the latest technologies, which ensure the implementation of effective security protocols in banking software from scratch. Infuse industry-leading technologies in web, software, and mobile app development.
Compliance Knowledge
Our teams develop products for multiple high-risk industries and have a deep understanding of the compliance standards guiding the financial sector. Our teams also implement digital transformation best practices to streamline automated reporting and compliance management.
Migrate Existing Systems
Migrate existing software in traditional banks to secure cloud platforms with our cloud migration services, whether trying to revolutionise an online banking platform or mobile banking application. Our company is an AWS partner and Microsoft Azure partner to guarantee seamless migrations.
Risk Management
Implement effective risk management by using a team that web and mobile app security best practices when developing digital products for financial organisations. Cybersecurity is a priority for our teams, enabling financial organisations to flourish and mitigate typical risks associated with the industry.
Ongoing Support and Maintenance
Ensure operational efficiency in all banking processes with our commitment to ongoing maintenance and support, an essential part of our software development life cycle. Keep customers satisfied, processes automated, and security protocols updated with our maintenance services.
Banking Software Conclusion
Partner with the right company or developer before considering digital transformation and development services that align with business goals. Ensure companies use the latest technologies and implement cloud computing and cybersecurity protocols to ensure compliance. Use our guide to choose the right partner, or contact us to discuss your software needs with industry experts.
Financial Services Software Development FAQs
What do developers do in the banking industry?
Financial software developers serve the banking and financial services sector by writing code for secure applications, testing software to ensure security and compliance, and maintaining the platforms to ensure happy customers and operational efficiency for banks and financial service institutions.
What is the finance software development life cycle?
The software development life cycle follows these steps for financial institutions:
- Defining the project scope
- Requirements engineering
- Creating a project requirements document
- Designing and prototyping the product
- Writing the code and integrating APIs
- Quality assurance software testing
- Deploying the software into a live environment
- Maintaining the application and components
How do banks use software practically?
Cutting-edge banking solutions allow financial service providers to do the following:
- Look after accounts better and customise the services and products for customers.
- Improve the payment processing and loan approval procedures for faster turnaround.
- Digitalise how investment portfolios update and make personalised recommendations.
- Meet compliance standards with automated reporting solutions in software.
- Streamline core banking software for higher productivity and operational efficiency.
How much does financial services software development cost?
The cost of developing software for financial services providers in the UK will vary, depending on project scope, complexity, integration requirements, and platform type to mention a few. Use our app development cost calculator to better estimate the costs involved in software development.
Here are some examples to guide the budget for digital transformation:
- A basic banking app with account management, transaction processing, and basic security protocols will cost £40,000 to £120,000.
- An advanced banking solution with real-time analytics, personalised customer experiences, and enhanced security protocols will cost £120,000 to £400,000+.
- Core banking software solutions with payment gateways, customer-facing applications, and investment portfolio personalisation will cost £800,000+.
How does Pulsion ensure security and privacy in financial data?
Our development team implements the latest cybersecurity protocols, including multi-factor authentication and data encryption to deliver secure banking software following the General Data Protection Regulations (GDPR), Payment Card Industry Data Security Standard (PCI DSS), and Payment Application Data Security Standards (PA-DSS).
