This article is part of our Software Development resource section.
Open Banking Software Developers
For developers creating fintech solutions, the current market situation is full of opportunities and risks both. On one side of the spectrum, you have tremendous upside and great avenues to be explored whilst on the other side there’s risk of competition, changing legislature, etc. This creates a major obstacle for developers who are pondering whether to invest in new software development projects or to focus elsewhere. These decisions are part of the broader software development process, where teams must balance technical requirements, market conditions, security, and long-term business goals. In this article, let’s focus on the biggest challenges for developers of open banking software today.
Table of Contents
It’s hard to create usable solutions outside of UK and the EU
As of right now, the only two markets with significant levels of open banking implementation are the European Union and the United Kingdom. Elsewhere around the world, the open banking sector is in its infant stages or is yet to be introduced.
This makes it especially difficult for developers outside of these regions. Businesses building the web component of an open banking product should also understand how to hire the right web developer to ensure candidates have the technical skills and experience required for the project.
And within the EU and UK, competition is fierce, meaning that in order to succeed, they have to invest significant amount of financial resources as well as time. With a market that’s already quite filled, there could be opportunity abroad, but for all developers, creating solutions for anywhere outside of the aforementioned two places, is very rarely with a promise of profit. The same principle applies to specialized development projects, where businesses may need to hire a Magento developer or another platform specialist rather than relying on general development expertise.
Strict security and licensing requirements
For the markets where you have a working open banking sector, there’s very strict security and licensing requirements. Both the EU and the UK have dedicated institutional watchdogs, monitoring the way software developers enter the market and launch their product. Through meticulous inspection and weeks-long check, a tool can be licensed and is allowed to enter market, if no further adjustments are needed or clarifications to be presented.
The requirements for data security and operational trust are the highest, meaning that development will be expensive.
Difficult legislature that can change in the future
Hundreds of pages of legislature means that developers have to utilize tools which are already compliant and stick their systems on top of them. Or they go in an alternative direction and hire expensive outsourced legal counsel. Before relying on external expertise, it is worth considering the reasons to outsource custom software development services and whether outsourcing fits the project’s regulatory, technical, and financial requirements.
When external development resources are required, businesses should also understand how to properly outsource custom software development so that responsibilities, requirements, and project expectations are clearly established.
Taking the time to establish these expectations can also help organizations avoid common mistakes while outsourcing software development that can lead to unnecessary costs, delays, or communication problems.
Although the latter method is preferred for when devs are trying to make something unique and new, but if you already have a clear model in mind, it might be better to choose tools with a broad range of end-user customization. The same need for specialized technical expertise can arise in emerging technology projects, such as creating WebAR with a software development company, where development requirements can be highly specific.
Developers working in this environment also need strong technical and practical abilities, making the competencies of successful software developers particularly important when building compliant fintech solutions.
Pressure from larger financial institutions
Finally, if you wish to make your service popular, you have to integrate it with the largest banks. However, if they decide to create something similar to what the developers have in mind, there is going to be a very steep hill to climb in order to compete against these big banks. If the fintech service also includes a mobile application, businesses can apply similar principles when learning how to hire the best mobile app developers on a budget while balancing specialized skills with development costs.
In such a competitive environment, partnering with a software development company can provide access to additional technical expertise and resources when developing or scaling a fintech product. When choosing an external partner, knowing what makes a good software development company can help you evaluate its technical capabilities, experience, communication, and ability to meet demanding project requirements.
This is why developers have to be wary of entering the market with a solid enough business plan and an insightful plan for the nearby future. When expanding the team to meet these demands, non-technical interview questions to hire a software developer can also help business leaders assess communication, problem-solving, and overall candidate suitability.
Building the right software development team is equally important, as fintech projects require people with the technical, security, and domain expertise needed to handle these challenges.
