The Fintech industry has become one of the most dynamic and unforgiving sectors in software development. It is quite competitive, so companies are always trying to innovate and quickly introduce new features to the market. 

However, many teams go in with a great idea and strong technical skills, only to find themselves derailed by unexpected challenges. As top fintech developers have observed, the pressure to be innovative and deliver quickly often results in various common mistakes that can prove quite costly.

Today, we’ll break down the most common issues that development teams face and look at how to steer clear of them.

One of the most common mistakes is focusing on an app’s features and trying to comply later. But in fintech, compliance isn’t just a final checkbox, but a crucial part of development. It shapes how the app is designed as it dictates how you are supposed to handle data.

The problem is that there are dozens of regulatory measures you need to consider. For example, the GDPR in Europe and the CCPA in California dictate how you can collect and store data. There are also AML and KYC rules in the US and other parts of the world, as well as PCI DSS standards for handling card payments. Non-compliance with any of these can result in huge legal penalties or restrictions on where your app can operate.

A good way to deal with these is to treat compliance as a design input. Understand the data and financial regulations in all the regions you want to operate in and build for compliance. Ensure you reach out to compliance experts or legal consultants for expert input.

Since fintech involves finances and sensitive personal information, security is part of the foundation. Unfortunately, some developers start without a solid security architecture, only taking basic measures like HTTPS and password encryption. That barely scratches the surface when you are dealing with financial data, identity verification, and fraud prevention.

To avoid this, create a solid security architecture for every layer of the system – from how APIs are designed to user session management. This includes measures like end-to-end data encryption, strong authentication flows, secure configurations, and constant monitoring for unusual behavior. Essentially, if one part of the system is compromised, it shouldn’t expose the entire platform.

Scalability often doesn’t get the attention it requires in early development as most fintech companies tend to target a particular region. However, growth can happen fast (and unexpectedly) in the industry. It doesn’t even have to be new users, it can be the transaction volume or third-party integrations.

If you hadn’t factored scalability well, this would result in slow load times, failed transactions, timeouts, or inconsistent performance during peak times. You may then be forced to refactor the architecture, migrate databases, or rework entire components.

A better approach is to plan for scalability from the first day, even when you are starting small. This includes choosing a cloud infrastructure that can auto-scale, designing stateless services where possible, and using microservices to decouple heavy processes. Essentially, think about what happens when the different numbers you are targeting triple.

Fintech apps often ask users to carry out processes that aren’t exactly simple. These can be linking bank accounts, verifying identity, or completing multi-step transactions. These are all necessary, but when they are presented in an interface that isn’t intuitive, users can abandon the process and even drop the app.

It’s important to understand that while users are willing to do complex stuff on a desktop, the expectations are different on an app. But the problem isn’t the complexity itself, it’s how it’s presented. A poor layout, too many steps, and unexpected interruptions like being logged out are annoying.

During the design, create workflows that feel effortless for the user, even when the processes are complicated under the hood. Break them into manageable steps, but use progress indicators so that users know where they are. Where possible, pre-fill information. And if something goes wrong, let the error be clear and helpful, not a vague warning that will leave the user guessing.

A Weak Testing Strategy

To ensure reliability, testing is critical in fintech. However, some teams often rely on general testing practices that focus on surface level functionality. This isn’t enough in fintech as a missed decimal point can cost real money and damage trust.

Testing should be incorporated during the development as an ongoing process, so ensure you have a robust testing framework for each layer. Otherwise, bugs will be harder to isolate and more expensive to fix when the development is complete. 

Go beyond quality assurance to include unit tests, integration tests, security tests, and performance checks. You should also test for unexpected conditions, such as when a transaction fails midway or when two users submit the same action at once. Ensure that manual testing is also backed up by automation. 

Development teams often underestimate the amount of ongoing maintenance, updates, user support, and compliance changes that come after the launch. And without a proper maintenance plan, even the best products can start to show cracks within months.

The problem is that fintech is highly regulated and fast-evolving. New compliance requirements can be issued at any time, banking APIs can change, user behavior can shift, and new security threats can prompt urgent updates. If your team can’t respond quickly, you risk downtime, customer dissatisfaction, and even falling out of compliance.

This means that during the planning phase, you need to address how different issues are handled post-launch. For example, what happens when a bank changes how it handles authentication? Ensure that there’s clear ownership in the development team to address such issues promptly. 

Ultimately, success in the fintech industry goes beyond launching fast. While you still need to be innovative, follow a comprehensive development framework to ensure reliability, security, and user-friendliness.

Author

Mary Zayats, Lead Business Analyst and Banking IT Consultant

Mary joined ScienceSoft in 2016 and promptly won the position of a lead business analyst and banking IT consultant, owing to her meticulous approach to details, strong communication skills, and deep knowledge of the banking legal framework. Mary helps ScienceSoft’s banking clients drive high business efficiency and improve customer experience with the help of mature automation tools and advanced techs. She elaborates unique IT solutions that provide robust data protection and 100% regulatory compliance. The banking apps delivered with Mary’s assistance became the leaders in their markets and received widespread recognition.