In 2021, it’s hard to surprise anyone with technology. High tech has made its way in each area of our life. We have smartphones, smartwatches, even smart houses. It’s easy to find a soulmate in a dating app or get an online medical consultation via Zoom. And sure, banking is not an exception.
The list of possible tech solutions for the financial and banking sector is huge. From banks’ websites to software for ATMs—everything is based on technologies. People are trusting fintech, so there is no wonder the world already has more than 16,000 fintech startups.
Despite the fact that a tech solution will bring more revenue and customer loyalty to the bank, it can be quite costly to implement. Budget planning for banking software development has its own aspects to take into account. Here are the most influential factors to consider while thinking about fintech development costs.
1. Project’s type and complexity
These specifications are the most obvious ones. They directly influence the cost: The more features you want to implement, the more expensive the development will end up. At this stage, you should define the features that will appear in the first version whether it’s an MVP or not. Also, consider the platforms for deployment (iOS, Android, web, or all together).
Time to market matters a lot in financial software development. If you release your solution too early, you may not find the right audience to use your app. If it’s too late, the swarm of rivals can swallow you and push you away from the market.
The common way to count time developers spend working on a project is by hours, especially in the time & material method. It implies that you pay for development depending on how many hours the team was working on your code. If there is a fixed price basis, you will pay an established amount of money without connection to hours.
This point stems directly from the previous two. Depending on what features you want to see in your banking solution, the team size will be tailored respectively. If you are planning to update the website or migrate it to a cloud platform, you will need one set of specialists. An AI-based mobile banking consultant will require completely different expertise.
Also, you should take into account developers’ location, seniority level, and hourly rate since these metrics will greatly affect final costs.
4. Tech stack
We can highlight the two most influential characteristics of the tech stack: the novelty of technologies and license fees. A brand-new technology will require more research and learning from team members and it will impact the development budget. At the same time, well-known solutions will take less time to master but they may be less efficient in the long run.
Besides, not all technologies are free to use. Some of them require you to pay a certain amount of fee for their usage. It’s especially relevant to third-party tools that have unique features and advantages.
Any business is accompanied by risks. The team can misunderstand the specifications, the target audience can be resistant to change, third-party solutions can change their ways of billing. You should consider the maximum possible amount of force majeure situations while estimating the development costs.
Talking about banking and fintech, the greatest risk is security. You and your team should pay extreme attention to the data protection and strategies of dealing with data leaks and hacker attacks.
To sum it up
The above-mentioned factors contribute a lot to estimating software development costs for banking. Depending on specific requirements, the list can be expanded with things like design, testing, maintenance, and even corporate policy. It’s hard to say precisely how much money you will spend on your solution, but the core items of expenses will stay the same.