The finance industry is undergoing a major digital transformation driven by the need for increased efficiency, agility, and competitiveness.
As a sign of this evolution, the number of U.S. neobank customers rose to 20 million at the end of 2021 and is projected to reach 39 million by 2025, according to Insider Intelligence.
In this scenario of technological advancement, finance companies are faced with new opportunities to streamline their operations, improve customer experience, and stay ahead of the competition. However, with these opportunities come new challenges that must be addressed to realize digital transformation’s benefits fully.
3 top challenges finance companies are facing regarding software development
Finance companies face several challenges when it comes to software development. Some of these challenges include:
- Lack of Technical Expertise: Software development for financial services companies need to be built by seasoned professionals and not all finance companies have the internal resources to develop and maintain it.
How to solve: To overcome the lack of technical expertise, finance companies can partner with software development companies that specialize in financial technology. These companies can provide the expertise and resources needed to develop and maintain software.
- Integration with Legacy Systems: Many companies have legacy systems that are not compatible with modern software development. This can make it difficult to integrate new software for financial services companies with existing systems, leading to increased costs and longer implementation times.
How to solve: Finance companies can modernize their legacy systems by using cloud-based solutions or replacing them with custom softwares. This can make it easier to integrate new software with existing systems, improving efficiency and reducing costs.
- Regulatory Constraints: Financial companies are subject to numerous regulations and laws. These regulations can make software development more complex, and the companies must ensure that their software complies with them.
How to solve: Staying Up to date with regulations to ensure that their software complies with these regulations. This can be achieved by partnering with software development companies that specialize in financial technology and can provide the expertise and resources needed to stay compliant.
The Benefits of Software Development in Finance Companies
For those companies that overcome all the challenges mentioned before, the benefits are many!
Continuous investments in the right technologies with the most suitable partner, can certainly result in:
- Increase efficiency and productivity: streamlining processes by automating repetitive tasks, such as account reconciliation and reporting saves time and reduces the risk of errors, making the process more accurate and efficient.
- Improve customer Experience: a better user experience can be provided with mobile banking apps, online account management, and other digital services.
- Enhance Data Analysis: accessing and analyzing data more efficiently provides valuable insights into customer behavior, market trends, and risk management.
- Better Compliance: by automating processes, financial companies can reduce the risk of non-compliance and ensure that their operations are in line with the latest industry standards.
Technology trends to watch in the Finance Industry
As finance companies embrace digital transformation, there are several trends to keep an eye on. For example, the rise of open banking and APIs creates new opportunities for finance companies to connect and share data with other financial institutions and fintech companies.
In addition, the increasing use of artificial intelligence (AI), omnichannel strategy, and machine learning is helping finance companies automate and streamline operations while providing new insights into customer behavior and preferences.
We can also mention as technology trends: artificial intelligence, data-driven culture, blockchain, and the deeper adoption of cloud computing.
After analyzing the scenario of software development for financial services companies, we can conclude that the finance industry faces new challenges and opportunities as it navigates the digital landscape. However, by embracing custom software solutions and staying abreast of emerging trends, finance companies can overcome these challenges and reap all the benefits of digital transformation.
Partner with a Software Company focused on the financial industry
At NTConsult, we are a Nearshore IT company with 20 years of experience in the digital solutions market. Working with clients in 8 countries, we have a strong emphasis on financial institutions and the banking industry (our solutions are cited as successful cases by leading organizations such as World Bank and Inter-American Development Bank).
As we work with nearshore LATAM based IT Talents, we offer competitive pricing, with English-speaking IT specialists that work in your time zone and are aligned with your country’s culture, which ensures real-time communication without language barriers and greater synergy with your teams working on your projects. Nearshoring with Latin America based professionals is a great choice for North American companies.
Get in touch with us in the quick form at the bottom of this page and let’s talk about your business challenges. We are always ready to help your company achieve its goals through technology.