
Seeing your idea come to life is very satisfying, especially if it profits you. However, a lot of businesses fail to make their ideas come true because they make mistakes early. Building a minimum viable product (MVP) is the best thing for companies to do to avoid these problems. MVPs test the app’s viability before big investments are made. The world fintech market is expected to keep growing quickly. From 2021 to 2028, it is expected to grow at a rate of 19.8% per year. This article will talk about building a fintech MVP as well as the total cost of development.
Let’s get started!
Why Build A Fintech MVP?
It is essential to grasp the significance of establishing an MVP in the fintech area before delving into the expense of doing so. Here are a few important reasons why you should make a fintech MVP before you launch your financial startup:
1. Digital Transformation Caused By Pandemic
FinTechs have shown what’s possible, and now every bank needs a digital plan. There has been a 72% rise in the use of financial apps in Europe since the lockdown, in case you were not sure. Companies like PayPal and new financial startups saw user bases grow at rates that had never been seen before.
With the move toward digital banking, now is a fantastic time to test out new fintech ideas. Now is the right time to start a fintech MVP and see how it does in the current market, since many people want digital-first financial services.
2. Fast-Growing Market
There is a lot of growth in areas like digital banking, blockchain technology, fintech robo-advisory, insurtech, and wealth management.
You can quickly get into this growing market for financial services by making an MVP. You can try your new idea in areas like payment processing, lending, or personal finance management before making a full-fledged product. This way, you can get ahead of competitors and gain traction quickly.
3. Making Money In The Long Run
Making an MVP is a smart way to spend money, especially in the banking industry. This is why:
- Spending less: Many startups fail because they don’t have enough money. You can better handle your resources when you make a fintech MVP. You can test the business plan without spending a lot of money by releasing a smaller version of your product. This way, you can make sure there’s demand before going bigger.
- User-Centric Refinement: Whether it’s for personal finance, investments, or loans, fintech solutions must meet the wants of specific users. It’s possible to get real feedback from users on things like transaction speed, security, and the user experience by releasing an MVP. This makes sure that the product you build meets customer needs, which is crucial in the fintech area where competition is high.
- Validation of Market Need: A lot of fintech startups have trouble finding the right product-market fit. In fact, many of them fail because there isn’t a need in the market. An MVP lets you test the market early on, which helps you make your offering better for the right people. For instance, release a limited form of a digital wallet or build payment gateway website, which can help you figure out if people want it before you spend more money on it’s full development.
Step-By-Step Guide To Build A Fintech MVP
There are eight steps that need to be taken before a barely viable product can be released. The first four steps are meant to help you get a better idea of the business idea. The fifth and sixth stages are all about designing the product. The seventh and eighth stages are where the product is actually built and tested.
Step 1: Write Down The Task
It is important for financial services to focus on the wants of their users rather than just making money. We want to know what the user really needs from the offering by taking a client-centered approach.
Understanding the user’s goals and the financial service’s worth becomes clear after we have a firm grip on their need. For example, creating a place for simple access to short-term loans solves a problem that a lot of people have by giving them a quick and easy way to get money when they need it.
Step 2: Determine Audience
When building a fintech MVP, it’s important to be specific about for whom the product is meant before starting to create it. It is essential to create a portrait of the “ideal” user, someone who will quickly accept your solution and be satisfied with its capabilities. This user profile usually has information like the person’s age, level of schooling, income, habits, hobbies, and interests. It will help during the advertising and promotion stages to know how well the product fits the wants of the target user.
Step 3: Considering Competitors In Financial Services
In the financial industry, it is crucial to analyze existing businesses and their strengths and weaknesses to improve your MVP. For instance, if you are developing a budgeting app, consider examining your competitors like,
YNAB
A budgeting software and app that encourages users to prioritize their money by putting money towards specific categories and goals. It provides simple access to income, costs, and savings, as well as tools to track spending, set financial goals, and save for the future. YNAB encourages proactive budgeting and breaks the cycle of living from salary to paycheck.
Step 4: SWOT Analysis
SWOT analysis, a strategic planning tool used by large firms, will help you determine your financial service’s MVP’s strengths, weaknesses, opportunities, and threats. The results of this study help managers make smart choices and shape business policies. Compare your product’s pros and cons to those of rivals, look for ways to make it better and grow, and think ahead about what could go wrong and stop it from being a success. A robo-advisory investment platform MVP may have minimal costs, an intuitive user interface, and algorithm-based portfolio optimization, but it may have fewer investment possibilities than conventional brokerage firms.
Step 5: Design Path Map
Provide the steps a user will take to use your financial service. The road map should put ease of use, simplicity, and productivity first. You can figure out when to give more information, where to put hints, and how to make the design better by watching how the user interacts with the future app. For example, on an online mortgage comparison site, the user’s path map would include steps like entering their financial information, choosing the loan parameters they want, comparing offers from different lenders, and finally applying for a mortgage with the lender they chose.
Step 6: Choose The Major Functions And Calculate MVP Volume
Write down and rank the most important features of your fintech MVP. Pay attention to features that directly help with the product’s main goal. Don’t add extra features or complications that aren’t needed because they can confuse users and make your study results less reliable. Based on feedback from users, more features can be added in later versions.
Step 7: Select The Best Approach And Create Fintech MVP
To create a successful fintech MVP, collaborating with an experienced fintech app development company can streamline the process and ensure that your product is built to the highest standards. Alternative methods like Extreme Programming, Lean, Scrum, or Kanban are great for making sure that updates happen regularly and that the product keeps getting better based on user input. The development team’s preferences and the needs of your project will determine which technique to use.
Step 8: Check Out The Product
While discussing the testing phase, you can emphasize the importance of testing how well multi-agent systems works together, especially for complex fintech operations where different agents (such as risk management, payment processing, and fraud detection) must interact seamlessly. If you incorporate technologies like a multi-agent system in your fintech MVP, it’s essential to test how these agents work together under various scenarios. MAS-based features such as real-time risk monitoring or autonomous financial decision-making need rigorous testing to ensure they meet user expectations
Cost To Build A Fintech MVP
There is a common misconception among founders that the types of technology used affect the cost to create an app. This is not the case. Your budget for making new products is only one side of the story. Getting the job done on time and having a good idea behind it are both very important.
The product owner needs to pick coders carefully if they want to make a great product.
Let’s look at what choices you have.
Choice 1: Hire freelancers, Which Is Cheap But Risky
A quick, cheap, and simple way to start a job is to hire freelancers.
Lots of freelance sites can help you find qualified coders. Freelancer.com and fiverr.com are all good places to start.
The main problem with hiring freelance developers is that they don’t have to work on the job. It’s easy for them to leave if something goes wrong. You will also have to take on the role of project manager and be in charge of all contact and getting things done.
It’s pretty hard to handle this problem. If you still want to hire independent developers, we suggest you look for ones who are close to you.
For most projects, you’d need to hire a full-time group of people. Let’s look at how much freelance software writers charge.
- It costs around $6,000 a month to hire a full-stack coder. This expert is needed at all stages of the project’s growth.
- It costs about $5,000 a month to hire a designer. The project needs this expert right from the start.
- During the whole creation process, you will need a tester. It will cost you about $2,500 a month to hire this expert.
- All told, it will cost up to $13,000 a month. The current pay of freelancers around the world are shown in the chart below.
Choice 2: Bring An In-House Team
There are times when founders choose to make software themselves. It makes relationships clear and conversation easy. When a company does its own development, the whole team can work on the project. You are still in charge of the quality. Your employees care more about app and company success than personal goals.
Putting together an internal team is also a lot easier.
The biggest problem with this choice is that it costs a lot more. If you start out with a small income, it could become a problem.
When you hire full-time coders, you have to pay for their holidays, their training, and a lot of other things. At the fintech MVP stage, make sure that your project needs this much money.
How much does it cost? Let’s use the same team:
- It costs about $9,200 a month to hire a full-stack coder.
- There is a $3,600 monthly fee for artists.
- Every month, a tester costs $4,100.
- It takes $7,500 a month to hire a project manager.
- Making things in-house will cost you around $25,000 a month.
The country-specific average cost of in-house developers will determine the fintech MVP pricing.
Choose 3: Hire An Agency
It also costs a lot to make products locally. The price does, however, include business and technology methods that have been built.
There would be a project manager, a specialized MVP development team, and a tester who would be involved in the process and whose work would be legally documented.
GoodFirms.com or Clutch.co are good places to look for a well-known local firm. You can use the scores and reviews left by past customers on these sites to find a skilled and dependable team.
One specialist at the company makes between $80 and $150 an hour. That means it will cost you at least $300 an hour for the same team.
For example, you should think about whether you are willing to spend up to $64,000.
Choose 4: Outsource Fintech MVP Development
A lot of companies choose to outsource their work. It costs twice or three times as much as choosing a local agency.
When you hire someone else to make your goods, you face two main problems:
Making the team feel involved and building trust.
Both problems can be easily solved, though. Before you hire an agency, make sure you’ve done a lot of study on them. To do this, read reviews, visit the company’s website, and look at new case studies.
Conclusion
Developing a fintech MVP is crucial in transforming your innovative app idea into a viable product. However, improper budget planning can lead to challenges in the development process. Therefore, it is vital to fully understand the cost to build a fintech MVP.
Since multiple factors contribute to the overall cost, the actual pricing can only be determined by discussing the project’s requirements and scope with industry professionals.
At Appic Softwares, we offer expert-led discovery workshops to help you get an accurate estimate. Our team specializes in delivering scalable and high-quality MVPs that foster growth for your startup.
Get in touch with us today to discuss your idea with our specialists and take the first step towards building your MVP.
Frequently Asked Questions
1. How Much Time Does It Take To Build A Fintech MVP?
According to a CB Insights survey of over 2,000 startups, the average time to develop an MVP is around 6 months. Another study by TechCrunch suggests that an MVP can be built in as little as 2 months.
In general, the process of creating an MVP can range from 2 to 6 months, depending on factors such as product complexity, scope of features, and the size and location of the development team. For a more precise timeline tailored to your product, consult our experts for guidance.
3. What Are Some Examples Of Successful Fintech MVPs?
Many industry leaders started with an MVP, including PayPal. These companies refined their products over time based on user feedback and gradually scaled their businesses.