Types of Financial Software: 13 Ideas for Your Fintech Startup

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Yuliia Podorozhko
Market Researcher

By 2025, the financial software market is expected to be worth US$191.8 billion, and a large segment of that market is still up for grabs. In 2019, for instance, the Global Fintech Adoption Index reported that global fintech adoption was still only at 64%, meaning there’s plenty of room for growth and new opportunities. 

Investing in a fintech company in 2021 can be a very profitable decision. In the fintech startup world, though, there are various types of financial software, so which presents the greatest potential?

Truth to be told, you could build any type of fintech solution and remain competitive as the level of rivalry in each category differs across regions. The key to success is to build secure, functional software that’s based on advanced technologies (artificial intelligence, machine learning, blockchain, biometrics) and offers customers value. And that's exactly what MadAppGang has been doing for our customers for years. 

In this article, we overview the types of financial software that represent an opportunity for fintech startups. Our goal is to help you understand what types of financial software are in demand and choose the right idea for your startup.

Types of financial software

Fintech is a huge market that encompasses various sectors; retail banking, fundraising and nonprofit, and investment management to name a few. The sheer number of options make choosing a fintech niche overwhelming.  

For more than a decade, MadAppGang has built smart and secure solutions for mature companies and startups, including WebMoney. Based on market research and our experience, the list below covers the types of financial software where opportunities are present. Review the options and decide which sector of the fintech market you want to target.

Mobile payment systems

This type of financial software offers an easy and quick way to send and request money worldwide and pay online or offline using QR codes. In contrast to bank payments, mobile payment systems provide customers with a seamless experience as there’s no need to type in card numbers, or use a card to make payments at all.

mobile-payment-software-type-revenue

The mobile payments market is projected to grow at a 30.1% compound annual growth rate (CAGR) and reach US$12.06 trillion by 2027. In this saturated market, newcomers have to compete with other startups and the industry's big hitters. The table below details the main players in global mobile payment systems:

user-stats-for-payment-fintech-software

Don’t let these figures put you off, though. The mobile payment app market is still promising as it has a fragmented nature. While numerous startups compete with each other and larger enterprises, none exert enough influence to move the industry in a particular direction. You can find a profitable niche, despite stiff competition, if you have an innovative idea or create a mobile payment app with improved functionality and security. 

Whatever you choose, implement the following core functionalities: 

  • A high level of security with TLS encryption, firewalls, biometric and two-factor authentication (2FA).
  • Seamless experience for contactless payments via NFC and/or QR code scanners.
  • Instant payments to and from bank accounts and between wallets.

Digital wallets

A type of financial software that forms part of mobile payment systems. Digital or e-wallets are online platforms or mobile apps that allow users to store funds and conduct transactions, or exchange digital currencies for products and services. Mobile wallets differ from mobile payment apps such as Apple Pay in that most don't offer contactless payments in offline stores.

create-fintech-payment-app-like-webmoney

Source: WebMoney

Key features of digital wallet apps:

  • High level of security (biometric authentication or/and 2FA)
  • Bill payments
  • Instant payments between wallets
  • Payments to and from bank accounts
  • eCommerce Integration

By 2026 the mobile wallet market in the USA and Canada is expected to exceed US$80 billion. Promising market forecasts indeed, however, there is speculation that most mobile wallets will be owned by big banks in the future, meaning competition is going to be an issue for startups.

Personal finance apps

Personal finance software is among the most promising and rapidly growing fintech markets and is projected to hit US$1.58 billion by 2027. According to Forbes Advisor, the best personal finance apps on the market in 2021 are:

best-fintech-software-2021-budgeting-apps

Source: Forbes

There are several types of personal finance software:

  • Investment apps 
  • Stock trading apps 
  • Wealth managers 

Each type is made to help users manage finances in various ways. For example, wealth managers track spendings, savings and credit scores, and allow automated bill payments. Investment apps put a user’s money to work, providing the right instruments and information to allow easy investments. Stock trading apps allow users to play the market and potentially make a profit. 

Which of these personal finance software types are suitable startup ideas? Let’s have a closer look at each and review the key features needed.

Investment apps

Investing apps make the investment market accessible by removing intermediaries and simplifying the process. Basic investing apps provide market fluctuation data and tools for trading, creating, and managing portfolios while advanced investment apps also offer robo-advisor services — AI algorithms that analyse historical data, market trends, and user preferences and behaviours to suggest the best investment options.

investment-software-characteristics

Source: Listen Money Matters

Core features of investment apps:

  • Bank and payment systems integration
  • Dashboard for multiple portfolios
  • Search and organisation of investment opportunities
  • Real-time analytics and statistics
  • Push notifications
  • Bank-level security 

Stock trading apps

Stock trading apps let users manage their portfolios and trade stocks on the go via smartphone. In addition, trading apps provide users with real-time market data, analyst ratings, news, and sometimes even human or AI-powered advisory services. Some trading apps also offer crypto trading and crypto exchange services.

trading-apps-valuation

Source: Business of Apps

Key features of stock trading software:

  • Bank and payment system integration
  • Dashboard for multiple portfolios
  • Stock search and sorting
  • Trade engine
  • Real-time analytics and statistics
  • Push notifications
  • 2FA and/or biometric authentication 

Wealth managers

Wealth managers help users manage personal finances by keeping track of their spendings, savings, investments, bill payments and credit score changes. This type of financial software includes: 

  • Habit trackers such as Digit, MoneyHabit, Empower
  • Budget planners like PocketGuard or Mint
  • Money managers as YNAB and Personal Capital

Money manager apps hold the crown for being the most advanced. Not only do they help users plan monthly budgets and track everyday spending, but also educate on how to put money to work through investing.

wealth-management-fintech-software

Source: Pymnts

Main functionalities of wealth management apps:

  • Personal profile with a ‘settings’ section
  • Tracking of spending and receipts
  • Data analysis and reporting
  • Bank and payment systems integration
  • Secure authentication 

Mobile banking

The mobile banking software market is expected to hit by 2026. Among the players in this sector are both traditional banks (that rushed to launch mobile apps to gain a competitive edge), and fintech banks or neobanks such as Current and Chime. Here’s a list of the most popular and profitable neobanks in 2021:

neobank-fintech-software

Neobanks are industry trend-setters, so it makes sense to check their functionalities before launching a similar product. A traditional banking app or a fintech startup app should not offer less than Revolut or N26 to remain competitive. However, as a matter of time and money savings, we recommend including just the minimum required features in your minimum viable product (MVP): 

  • High level of security (data encryption, behaviour tracking, multi-level authentication)
  • Accounts management
  • Payment processing
  • Transactions management
  • Deposit and withdrawal management
  • Map with ATM locator
  • Push notifications

Lending apps

Peer-to-peer (P2P) lending apps are web and mobile-based platforms that let users lend and borrow money in a virtual marketplace. Typically, such platforms reduce operational costs, which makes them attractive to investors, and offer a user-friendly interface and numerous useful features to attract borrowers:

  • Loan calculator
  • Credit score calculator
  • Loan application management
  • Bank and payment systems integration
  • Push notifications
  • High level of data protection
p2p fintech software

Example of a lending app’s functionality. Source: Prosper

Boosted by the pandemic, the global P2P lending market is projected to reach US$558.91 billion by 2027. Currently, this market is extremely promising, and P2P lending has given many fintechs a solid start. Prosper is a good example. By charging a small fee for every loan processed, this company generated US$18 billion.

Insurance apps

This type of financial management software is also known as InsureTech. InsureTech apps make it simple for customers to buy and renew insurance covers, file claims, and get support. Advanced insurance apps use AI to gather data and provide customised offers, making life even easier for users.  

The global InsureTech market’s value is projected to grow from US$2.72 billion in 2020 to US$11.94 billion in 2027. InsureTech is rising steadily as it has many benefits over classic insurance companies: a simplified claims process, improved customer support, process automation, and customised offers. In coming years, the health insurance market is expected to show the highest growth rate, surpassing that of both car and life insurance.

Example of InsureTech app functionality. Source: Australian Unity

Regardless of the InsureTech niche you chose, several core functionalities need to be included in your app:

  • Account management
  • Policy search and details
  • Claim filing
  • Payment gateway
  • Document/image uploading or scanning
  • Push notifications
  • Data-protection security measures

Accounting systems

Businesses use this type of essential financial software to track company expenditures and revenue. The market for accounting fintech is expected to reach US$20 billion by 2026, and the main share of this pie will belong to four types of accounting software: 

  • Enterprise Resource Planning (ERP) systems 
  • Core accounting software such as Workday or Sage Intacct
  • Payroll software similar to Execupay or ADP 
  • Billing and invoicing software like NetSuite and Freshbooks

Example of billing and invoicing accounting software. Source: FutureFirm

These systems vary and are designed for different goals. However, they share a list of similar core features: 

  • Basic accounting functionalities such as account overviews, invoicing, and reports
  • Payroll and time tracking
  • Expense tracking
  • Bank reconciliation
  • Budgeting and forecasting functionalities (consider AI-powered systems, a key trend for fintech for the next decade)

Crowdfunding

Crowdfunding platforms allow anyone to pitch ideas to a large audience and garner funding from hundreds, or even thousands, of individuals. A good alternative to traditional loans or P2P lending, crowdfunding can help entrepreneurs source capital easier and faster.

crowdfunding-software-market

Since the launch of Kickstarter in 2009, the crowdfunding market has grown to an estimated US$114 billion. And it's not the limit. By 2025, the crowdfunding market is projected to hit US$196.36 billion. Building a crowdfunding startup is a viable option. But don't forget to study the market and include the following key features:

  • Fundraiser’s dashboard
  • Investor’s dashboard
  • Project pages and search
  • Payment gateway integrations 
  • Social network sharing

Regulation and compliance technology (regtech)

Although a relatively young fintech sector, regtech is growing rapidly due to a rising number of fraudulent activities and increased regulatory pressure from governments. By 2026, the regtech market is expected to be worth US$15.8 billion.

Source: A-Teaminsight

The goal of regtech apps is to improve compliance management by leveraging emerging technologies. Regtechs help startups stay in compliance with fintech regulations, and sort through massive amounts of financial data by using AI, machine learning (ML), blockchain, and other cutting-edge technologies.  

Core functionalities for a regtech app include: 

  • Automated compliance task scheduling
  • Fraud detection 
  • Risk engine
  • Analytics instruments
  • Push notifications

Blockchain and cryptocurrency

The blockchain technology market is projected to reach US$36 billion by 2028, expanding at a breathtaking rate of 59.9% annually. The main share of this market is held by cryptocurrency exchange and trading platforms such as Coinbase, Binance, and Kraken.

Example of a cryptocurrency wallet app. Source: Blockchain

This industry is incredibly competitive, so creating a unique cryptocurrency app and platform is essential. Consider adding some useful and outstanding features to the following core functionalities:

  • Payment gateways
  • Trade engine
  • Digital wallet
  • Transaction history and order book
  • Analytical tools
  • Push notifications

Let's create a financial software product together

As fintech is a vast market that’s still expanding, it's far from too late to launch a fintech startup. Any type of financial software can make an impact, and get a piece of the huge fintech pie. The key to cracking into the market is quality; innovative products and services are always in demand.

While the competition is stiff in some regions, there’s every chance for fintech startups to succeed. Extensive market research, a robust plan, and a reliable team of professionals, such as MapAppGang, all help fintechs get the best possible start.

Decide on the type of financial software you want to build and entrust your MVP to MapAppGang’s experts. We design and build  Android, iOS, and web fintech platforms, and provide you with essential information and updates at every stage of your project. Contact us and let's create a unique financial solution for your venture.