Exploring Fintech Application Development Costs in 2024

The contemporary fintech sector faces intense alterations, contributing to its recognition, enhancing demand, and intensifying market competition. The sophisticated tech features and new trends lead to the rise in costs, which requires organizations to reconsider their budgeting and search for the optimal alternatives for app development. Hence, if you are considering expanding your business in this sector, this is the right time to know the total fintech app development cost and the factors influencing this estimation.

Key Factors Influencing Fintech Development Costs

Developing any fintech application is a challenge, considering the elements it has to comprise and regulations it has to adhere to. To eliminate your anxiety, we categorize the required project elements 

Project Complexity and Scope: Simple Features or Luxury Tech Artefacts

When approaching the comprehension of the overall project, you can face uncertainty about the availability of the project features and how they will affect the ultimate cost of the final product. 

Project features (constituents) determine its complexity, which will demand more financial input. To alleviate the customer anxiety about understanding and differentiating between the features, we subdivided features into the three following groups:

Simple Features (Low Cost)

Simple features enable the application to perform the ordinary fintech functions with the minimal security layer to guarantee its basic safety. 

• Authentication verifies the client’s identity. This feature proves the user’s account ownership by verifying their username and password. For financial transactions, authentication represents the card’s credentials. 

• Authorization ensures access to the account. This feature grants users permission to perform financial operations, like authorizing the lending platform to analyze income data. 

• 2FA, or two-factor authentication, is the basic feature that secures the client’s entrance to the app by providing an additional security layer. The primary authentication level is inserting a password, while the second layer can be fingerprint recognition to verify the account and prevent phishing. 

• KYC (Know Your Customer) is the basic and mandatory process of identity verification when the person wants to open an account. The KYC feature helps prevent identity money laundering. 

• Money transfer is a core feature of any neobank or money-transfer application. It ensures that the client can send finances to another person via the bank’s ecosystem or to the accounts of different banks. 

Simple features represent the cornerstone of the fintech app’s functionality as they guarantee the basic elements of its functionality like access, security, and money transfer.

Although a simple-feature project is cost and time-effective, you should pay attention to the fact that it lacks diversification. There is a high market competitiveness between the fintech apps, so if you want to make your project visible and memorable regardless of its basic functions we offer you check the middle-based project features. 

Middle-Based Features (Moderate Cost)

The middle-based features of the project not only diversify the fintech application, but also serve as a means of attraction and retention of the clients. Additionally, if you are interested in mobile banking specifically, middle features expand the variety of the banking services, affecting its cost accordingly. 

Feeling anxious about how to make a financial application tech-savvy and recognizable? Then, it is possible to consider the following features as middle-based.

• As a subtype of deposit account, a savings account can diversify a fintech application by offering its users preserve some fund as an emergency. Savings account is separate from the checking account, as it does not cover daily financial procedures but serves for a long-term run. 

• Gift cards are a means of customer attraction and recognition. These middle-based project features serve as acquisition incentives and a loyalty program strategy. Attaching a gift card is beneficial to motivate the client to open an account. This tactic is appropriate for a neobank app. Additionally, gift cards are beneficial to gratitude clients for their long-term use of your app, which serves as a motivational incentive to keep using it. 

• Exchange enables the user to convert cryptocurrencіеs from one to another (for example Bitcoin to Ethereum) without any additional operations like transfer to bridging wallet.

The analyzed middle-based project features can expand the range of the fintech application services by generating a base of loyal clients. Nevertheless, if you search for the sophisticated characteristics of your product, you can consider the following complex features. 

Complex Features (High Cost)

Complex features can contribute to the development of a loveable project the client will recognize and prefer due to the extent of the luxury user experience it provides. The business owner should consider that the complex tech characteristics involved in the project will be the highest in price, as they represent the project’s integration of the latest tech trends.

• Credit card issuing both in a virtual and plastic variant is demanded for a luxury level app. The client can use it for making payments by applying personal crypto accounts. 

• AI-driven chatbots represent the luxury tool, which provides 24/7 assistance to the client. Chatbots answer frequently asked questions and can assist the user in guiding their financial decisions. Additionally, the analyzed tool can help the client in managing their budget based on their inter-account financial behavior. 

• Real-time chat is similar to the chatbots above as one of its opportunities represents automated conversation. For instance, when recording user behavior, the bank representative can communicate with the client themselves or apply the bot to record the voiced clients’ data. 

• Gamification integrates gaming mechanisms into a non-gaming environment. With the help of vouchers and rewards, gamification promotes more customer engagement and satisfaction by cultivating their financial literacy. For instance, you can consider the gamification model to encourage clients to save more. Challenges combined with rewards will enhance customer intention to save more. 

The analyzed complex features are the highest in cost, considering the tech stack and ongoing maintenance they require for the proper and efficient functionality of the project. Regardless of the range of benefits like a better user experience and client retention, any project from simple to complex remains vulnerable to cyberattacks, so you should pay attention to the security measures to ensure the safety of your clients’ data.

Learn about the key aspects to scale your neobank.

Security Measures

Security is a pillar of any fintech app as it enhances the reputation and recognition of your potential fintech application by guaranteeing client data privacy and safe transactions. The development cost will vary from the measure complexity and its functional specificity.

Security code optimization 

When starting developing a fintech app, it is important to be sure that the development team crafts well-written algorithms to analyze the flaws and security breaches in its code for their further prevention.

Data encryption

The key task of any fintech application is to ensure a safe data journey from its very beginning to the end as it has to comply with PCI-DSS regulation to protect client’s data. In-transit encryption and end-to-end encryption can ensure data safety during its journey:

• In-transit encryption: protects data in the middle of its journey by implementing a TLS or Transport Layer Security method. 

• End-to-end encryption: ensures that when the sender is going to send their data, it is encrypted, and only the receiver can decrypt it, minimizing the possibility of hacking attacks. 

Code obfuscation

When developing a fintech application it is crucial to keep in mind that hackers can try cloning the developed and launched app, which can threaten your reputation and clients’ safety. This measure integrates encryption and eradicates vulnerable metadata. 

Tokenization

Tokenization replaces the client’s sensitive data with tokens, or a generated random string of symbols. The identified fintech app security measure complies with PCI standard regarding the safety of online transactions it promotes. Only authorized users gain access to the ‘token vault,’ or the database that preserves all links between the generated strings of symbols and original data. 

AI & ML (for user transactions)

Artificial Intelligence and Machine Learning algorithms are useful for keeping a round-the-clock analysis of the user’s behavior to detect their unusual and usual behavioral patterns. These security measures analyze user ID, device information, geolocation, IP address, and can block suspicious transactions if they are sent from an unknown or suspicious IP address.

Gain insights into the top security practices for neobank.

Design & User Experience

Design and user experience are elements that can make your app memorable and recognizable and keep clients’ retention. UX/UI are based on visual elements and tech ease of use. The more diverse your User Experience and User Interface design is, the more expensive it will be. 

• UI Design focuses on the visual elements of the app’s design: color palette, font, logos, motion for animations to attract the client. 

UI design affects the app’s overall cost as the means of visual aesthetics convey the message and create an app’s loveability. If the fintech application has a good UX design but poor UI, users will use it only if there is no other alternative.

• UX Design focuses on improving the way the user interacts with the application. You should keep in mind the UX elements like interface design, interaction design, information design, and functional/content requirements as they will either undermine or optimize the app’s ease in use. 

When thinking over the UX design, you should keep in mind the overall strategy of your fintech application as it has to meet the client’s needs. The cost will vary based on the interactive experience features of the product as the weak UX design and strong UI design will not keep the clients in the long-term run. They will search for the easy-in-use app. 

Tech Stack

A large fintech project is a serious technical challenge. As a rule, the result of development is a rather complex architectural solution, which consists of a large number of different microservices, each of which solves its own highly specialized tasks. Accordingly, each of such services should be written in a language and framework that are best suited for solving microservice tasks both from the point of view of 

• modernity of approaches and technologies embedded in them (frameworks)

• high performance

• security

As a rule, the key element of the server-side part of the system is the NestJS framework. This is an advanced framework that allows developing applications that run in the Node.js environment using the modern programming language TypeScript. 

Besides, the following architectural elements are usually involved:

• microservices in Go language for especially high-performance nodes of the system.

• RabbitMQ - distributed and horizontally scalable message broker for organizing interaction between separate system components.

• Various databases and data stores such as MySQL, PostgreSQL, MongoDB, Redis, Elasticsearch.

• Docker/Docker Compose for organizing fast application deployment.

When it comes to the client side of applications, the need to provide maximum security and a high level of UI/UX comes to the forefront. To solve these tasks, the company's stack includes:

• modern tools for developing mobile solutions using Swift, Kotlin languages to create native iOS/Android applications that provide the highest level of performance and UX

• powerful tools for developing cross-platform solutions based on ReactNative, NativeScript, Flutter or Ionic, which at the expense of a slight decrease in performance will significantly save the financial component, allowing you to develop 2-3 platforms simultaneously

• advanced frameworks for Web application development - Angular and React, with the help of which you can easily create enterprise-level applications.

Finally, the company uses a huge stack for organizing application testing (Jest, Cypress, Playwright), code quality and security checks (SonarCube, Aqua Security Trivy, Snyk), system monitoring (Sentry, Zabbix, OneSignal, New Relic) and much more.

Systems deployment is usually based on AWS to maximize security and reliability, but Hetzner, DigitalOcean or other cloud providers can also be used depending on the situation.

Development Team

Development teams usually consist of the following specialists: project manager, front- and back-end developers, UX/UI designer, QA engineer, and DevOps and can be subdivided into the in-house and outsourcing teams. 

• An in-house team or insourcing implies that the organization assigns project development to its employees, who receive fixed salaries and financial perks. The advantages of insourcing include: complete control over the project, the team’s dedication to the product, and corporate culture

• On the other hand, outsourcing represents a substitute for the in-house team. The advantages of outsourcing represent: a vast talent pool, reduction of the labor costs, intensified effectiveness, and  flexibility in staff arrangement.

Although in-house team is more aware of the corporate culture and organizational processes, outsourcing can win the lead through its adaptability, dedication, time flexibility, and tech effectiveness. 

Cost Considerations

Developing a fintech application, especially in the neobank sector is a cost-demanding task. Despite there is a lot of "money eaters" in the fintech app development the factors mostly influencing the costs are the follows:

Development Infrastructure: Technology and App Development

1. Basic Version: while the costs of the simple-featured application start with $100,000, adding middle-based features will increase the price, until the final price range of $500,000 for the luxury-level feature complexity. 

2. Advanced Version: the advanced version may present tech-savvy features like  integrations with various payment systems and advanced security measures may cost between $500,000 and $2M or even higher.

Administrative and Operational Costs

The administrative and operational costs can range from $100,000 yearly per minor operations and simple fintech apps but can expand to over $1 million if the neobank grows. 

Security Maintenance

The initial cost of the development and integration of the security measures with their further monitoring will range from $100,000 to $500,000.

Customer Support Infrastructure

The price range varies from $50,000 to $300,000 for building effective customer support. Key factors to take into account are: the system’s complexity and types/numbers of the client’s expected interaction (to ensure app’s scalability and easy operability). 

Why Choose Agilie as a Reliable Partner

Agilie is a fintech-savvy organization with 14+ years of experience on the market. Our core principles represent transparency, value for clients, and diversity enable us to generate a dedicated client-centric approach to any project we fulfill, whether it is a software optimization or the from-scratch neobank, cryptocurrency, smart contract development.

As an outsource organization, Agilie provides clients with solutions based on the three-dimensional team model: software outsourcing, staff augmentation, and dedicated team.

• Software outsourcing implies that the client delegates its IT services to a third-party organization whose specialists are in charge of the tech roles. 

• Staff augmentation is the practice when the client hires one or a few outside specialists. Staff augmentation is beneficial for long-term staffing when the business owner integrates one or a few outside specialists to work on the project. 

• A dedicated team means that the organization can hire a complete team of developers outside the company, which can be a cost-effective alternative to the in-house team. 

Expertise & Success

1. Cross-Platform in Level01

Based on the Ethereum blockchain, Level01 is a P2P decentralized financial platform that enables the users to store the coins in their cryptowallets. The initial client MVP for the product represented an Android platform, as its target audience was only Android users. 

Agilie’s success was preparation of the solid roadmap that enabled Level01 to cover both Android and iOS users. The flexible SDLC ensured an efficient team collaboration. During the discovery phase, we developed a product architecture and prototype. Agilie optimized Level01’s smart contract with keeping AI-based predictability inside.

2. Artificial Intelligence & NFT in Lolypto

As a Web 3 game, Lolypto intertwines social interaction (e.g. laughing), NFT staking, and AI operations. Focusing on the ‘you you laugh - you lose’ idea, the user plays with NFT characters where they can further buy and sell items with the NFT tokens. 

Agilie’s AI success was based on the application of the AI modules to detect the slightest signs of the player’s emotional expressivity. Our team of developers approached the game considerably because by utilizing ML-kit, dynamic configuration, and cloud-based solutions Agilie managed to guarantee Lolypto the maximized precision of the predictions, making it more fun and client-engaging. 

3. Tech Stack Optimization in The Wholesale B2B Marketplace

The Wholesale B2B Marketplace refers to the marketplace category, where our initial task was to boost the app’s features. However, per new requirements our task became building a functional app in both iOS and Android from scratch. Our key business-oriented technological achievements included:

• Siri integration: B2B platform includes the Siri technology, which enables the users to send messages to different recipients, which improves user experience by alleviating communication with vendors.

• iMessage extension: represents the ability to transform client’s wishlists and inspirations into product descriptions, which they can share with an interlocutor. 

• Augmented reality: our team supported augmented reality, which enabled the application to visualize 3D models of goods in three-dimensional space, enabling the users to view the model from various angles. 

Conclusion

The developmental costs in the fintech sector require considering multiple factors, like the tech complexity, UX/UI design, and security measures of your future product. The key idea we aimed to share in our article is that the more feature-complex your app is, the more expensive it will be. Choosing a reliable fintech app development partner is a core to ensure yourself and your product with the maximized tech efficiency, dedication in development, and passion in collaboration that we in Agilie cherish to provide. 

Contact us to make your fintech application tech-savvy, user-centric, passionate, and dedicated.