Embedded Finance: The Key to Scaling Your FinTech Startup in 2023

For FinTech startups in 2023 and beyond, conventional banking methods may not even be on the radar anymore in terms of the services they offer. The focus is now on digital options that provide value to users both in terms of experience and financial well-being. Users need that extra bit of motivation not only when making investment decisions but when purchasing anything. 

Embedded finance is the change that’s made this shift away from conventional banking not only a viable option but a necessity for most consumers which has forced action from financial service providers. 

To put it simply, the concept behind embedded finance is to get consumers to use FinTech services that are already present on the platforms they use daily. For example, if you’re using an e-commerce platform like Amazon and you have the option to use BNPL, that is an example of an embedded finance feature. 

It is utilizing the banking tools offered by non-banking platforms (e-commerce, social media, ride-sharing apps, etc.) so that the consumer can get the full benefit of what the platform provides. 

Why is This Important to Know?

Understanding how to use embedded finance as a start-up or mid-size company in any industry is crucial to achieving scale. You’re not going to be making millions just by sending “hey we noticed you abandoned your cart…” emails because many consumers act on impulse. 

By non-banking platforms integrating financial services, they are providing value to their customers that is without a doubt going to be the separator between them and the competition. 

If we were to break down some of the key impacts embedded finance will have on the financial industry, the ones that stand out the most might look something like this:

User Experience:

First and foremost, the number one factor driving a successful platform is based on how much users - well, enjoy using it. What embedded finance does very well, in this case, is offer a seamless experience that is convenient and compatible. Without having to rely on a third-party provider, curious prospects are more likely to convert to paying customers when everything along the buying journey flows smoothly. 

Financial Awareness:

With the vast amount of features in embedded finance, users can view insights on their spending and saving habits. With this, platform providers can offer suggestions to their users. For example, a budgeting app could create a savings plan based on the data it collected from the users spending trends.

Revenue:

As mentioned earlier, prospects are more likely to convert when there are strategically embedded financial features in the platform. When the customer journey is good, the level of trust increases which makes the platform's value stand out to its users which keeps them coming back, and ultimately turns them into paying customers. 

Retention:

Building off the last point, having a solid user base is one thing. But the biggest issue FinTech companies will always argue about is how fast-paced and therefore competitive the industry is. With embedded finance, you’re more likely to have repeat customers and draw attention to your platform.

The Focus of Embedded Finance

You’ll notice most of this is focused on the user's benefits and that is because embedded finance offers nothing but benefits to consumers. The tricky part is how well non-banking platforms integrate the systems to make the vision a reality. For this reason, software development makes it possible to materialize the vision for the platform into reality. 

Software development for embedded finance can look different based on the goals of the platform but some essentials include the following:

• API Development: A staple in any software development project for embedded finance, API development is what allows data to be exchanged and users to interact with the platform. 

• Mobile: Accessibility is so important for users in 2023 especially when it comes to banking. Research is showing that a significant portion of the global population relies on mobile banking day-to-day (millennials especially).

• Machine Learning: Since data analytics are at the forefront for effectively providing useful information to users, finding the shortcuts to efficiency like machine learning is important for businesses. What machine learning does is use algorithms to provide valuable suggestions to users by analyzing the patterns identified in their spending habits.

• Payment Gateway: This is especially important for e-commerce platforms. Payment gateways are the IT systems that enable secure transactions between users and the platform. This is where private information will be stored (card details, authentication, encryption, etc.) which puts a lot of emphasis on quality software.

• Compliance: When it comes to FinTech services, especially embedded finance, there are certain rules and guidelines that cannot be violated. KYC is a very useful and important aspect in this sense as it will mitigate risk and build trust between users and platforms. 

The Takeaway

Digital transformation is one thing, dominating the virtual marketplace is a whole other when it comes to the financial service sector. Embedded finance is not just a key component but a fundamental asset when it comes to running a successful platform. For any platform to be successful, custom software that is tailored to its needs can be the differentiating factor that keeps users coming back.

Written By Ben Brown

—

ISU Corp is an award-winning software development company, with over 17 years of experience in multiple industries, providing cost-effective custom software development, technology management, and IT outsourcing.

Our unique owners’ mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.

Digital Transformation in The New Age of Web Development & Design

The entire premise of web development and design is headed in a direction that’s going to allow everyone to get involved. This is due in part to what’s known as the no-code movement which is a much bigger topic than it’s gotten recognition for. This is essentially programming without needing to know how to program and being able to do so in a user-friendly way. 

For example: 

• Squarespace

• Shopify

• Zapier

• Mailchimp

These are all examples of no-code design platforms that allow users to break into the creative side of web development (using drag and drop), a skill they otherwise might not pick up. This trend suggests an entirely different future for anyone with expertise in design and/or coding. To better understand its significance, let’s go over what exactly it’s changing:

First of all, no-code does not replace the need for software developers, rather it frees them from time-consuming, repetitive, and less intuitive tasks. What this allows for is the team to focus on the overall look and feel of the platforms they create in addition to other complex tasks that go into web development. 

The other key benefit is that web developers and designers will be able to collaborate without the need for as much technical expertise. In addition, small businesses will have accessibility and control when it comes to maintaining their own websites.

Web Development Compared to Web Design

Web design is the front-end, interactive aspect of a website that visitors see. The best web designers use various tools such as Adobe Dreamweaver or Figma to create the most optimal user experience. Visual designers and UX designers create the following:

• Design systems 

• Mockups 

• Wireframes 

• Templates 

• Colour palettes

Once the designs are created, they are passed over to developers to begin development. 

Web development is the execution phase, using code to bring the website to life based on the guidelines created in the web design phase. When it comes to this phase, the actual process of coding is going to be subjective based on the needs of the website as well as the business. Commonly, some of the programming languages used for web development include: 

• JavaScript 

• CSS 

• Python 

• HTML

• Ruby on Rails

The Development Roles

Back-end developers concentrate on the site or applications infrastructure which includes security and hosting. The front-end developers are the ones who then handle the functionality of the platform. And lastly, the full-stack developers are involved in both ends. This process of software development and integration is fundamental not only to creating a solid platform but to sustaining it. 

The Reality of The No-Code Movement

The tools categorized as no-code platforms are great visual builders that are user-friendly and simple to navigate but still, code is being generated behind the scenes. So in short, these tools are great for users who want to give building websites and applications online a shot without having to write code but it is still a stepping stone. 

The no-code movement has a long way to go before it can say goodbye to programmers and even still, someone is at least going to need to upkeep the back end. However, these tools are still incredibly useful for everyone, especially software developers around 50% of which use these platforms. Lastly, these tools are not limited to just websites and applications. For instance:

• Airtable (database creation)

• Ada (create an AI chatbot)

• Zapier (multiple app connection)

• Voximplant (contact centres via the cloud)

There is so much variety that can really only enhance the amount of value software developers and software outsourcing companies have to offer businesses looking to undergo digital transformation. When it comes to scaling a business, some of the key benefits of no-code platforms are as follows:

• Launch speed: In the best interest of company time and resources, no-code platforms enable businesses to release their solutions very quickly. Also, since collaboration between designers and developers is a viable option, the process flow is much more smooth. 

• Flexibility: Businesses go through a lot of changes in their platforms that need to be able to happen quickly. Using these solutions, sales, HR, marketing, and other departments of an organization will have access to build and modify their tools. 

• Cost: Small to mid-sized businesses will love no-code platforms since they won’t have to put a massive budget into engineers when they’re just getting started. 

• Testing: Design concepts and trends can quickly be tested, and once results are uncovered, the team can configure the platform most optimally. 

Lastly

In every industry, processes, resources, workflows, and plenty of other important assets change. So if you think about that, the work we do today won’t look the same in the future. With that in mind, the obvious choice (if you intend to remain in your role) is to embrace the change and figure out how to use it to your advantage. 

Custom software development is at the pinnacle of these changes because, without effective software systems, businesses will have no ability to scale.

Written By Ben Brown

—

ISU Corp is an award-winning software development company, with over 17 years of experience in multiple industries, providing cost-effective custom software development, technology management, and IT outsourcing.

Our unique owners’ mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.

How Businesses Benefit From Software Prototyping

Businesses are always going to be anxious when integrating new software systems, and rightfully so. It’s exciting when organizations take on innovative projects aimed at improving workflows that contribute to the long-term success of the brand. On the IT side, developing custom software for businesses is just as exciting. Development teams share the enthusiasm with their clients as they’ve just contributed something that’s going to bring lots of value. 

But before anything can be celebrated, it’s customary in the IT service industry to provide clients with a glimpse of the final product using what’s known as a software prototype. This prototype is what gives businesses the first look at what they’ve invested in, but more than that, it is where they can offer any final feedback.

Nothing in the IT service industry is one-size-fits-all, and prototypes are no different. With that said, there are a few variations of software prototypes which include:

• Low-Fidelity (LoFi) Prototypes: This is as basic as it gets. A LoFi prototype sketches out (hard copies or digitally) an outline of what the final product will look like. Some examples of this include the outline of a website or a paper-made mobile app prototype.

• Feasibility Prototypes: This is where important questions can be asked about the project that any other form of research couldn’t fully give answers to. Note that this prototype is not a good indicator of what the final product will look like as it’s being used to fill in gaps of what is unknown about the product.

• High-Fidelity (HiFi) Prototypes: This is almost as close to the finished product as it gets since this prototype has active links, realistic graphics, and all pieces of content that will be seen when it’s done.

• Live-Data Prototypes: A prototype that uses live-data sources such as user inputs, databases, and APIs can generate both tailored and dynamic experiences that resemble the final product. For instance, it can gather a user's name from a sign-up form to produce a personalized greeting message.

3 Key Areas That Benefit From Software Prototyping:

The Overall Vision

Software prototypes show businesses how their original concept for an IT system was materialized by programmers. When they see how well their vision was understood by the development team, they will be able to highlight any discrepancies or misunderstandings that can be resolved while the process is still in its early stages.

Changes to Software Requirement Specifications (SRS)

Prototypes are great for ensuring that new systems integrate well with existing systems and workflows. By having this visual representation of the software, businesses can offer feedback and make changes to the SRS before the development process has progressed too far. 

The Stakeholders

Without alignment and enthusiasm from those who will be using the system, the product will be nowhere near as effective since the team will resort back to what they know. Prototypes are great for generating this interest from stakeholders and will allow the team to effectively plan how they will use the tool to improve processes.

Variations of Prototyping 

So we’ve covered the common prototypes and what sort of benefits they offer to the organization, but now what we need is to understand the execution aspect. There are a handful of prototyping models that can be used depending on the scenario the company is facing. 4 of which are as follows:

1) Rapid Prototyping

As the name suggests, this variation of a software prototype is used to quickly examine changes to the system. This is an agile method also referred to as “throwaway prototyping” since each version becomes less relevant as the project progresses. 

What’s it useful for?

• Saves Money: While making only small changes in the iterative models, rapid prototyping does not cost a lot in the broad scope of the development project’s budget while mistakes not caught early on can amount to much more. 

• For Every Project: Rapid prototyping can be used in projects of all sizes.

• Saves Time: Every time a prototype is built, the next one is built on top of it which eliminates the need to go back and start from scratch.

2) Incremental Prototyping

When it comes to enterprise software, this is the only viable option since enterprise applications typically require significant integration. In this variation, small prototypes are being developed but at a higher volume for each aspect of the software solution. All prototypes are then taken and used to construct a grand prototype that is the software itself. 

What’s it useful for?

• Best prototyping model for enterprise-level software

• Flexible and adaptable

• Smaller models allow for easy changes

• Proficient at finding defective code

3) Evolutionary Prototyping

This approach is typically used when the software requirements are unclear at the start of the project. It involves creating prototypes that only consist of features that are well-defined and understood. As development progresses, stakeholders can provide feedback, and new requirements can be added to refine the prototype. 

What’s it useful for?

• Enables the identification of new requirements and ensures compatibility with existing ones.

• It’s comparable to creating a minimum viable product, except that it starts with a set of well-understood features.

4) Extreme Prototyping

This variation of a prototype is exclusively used in web development and it follows a 3 stage process. What these stages are meant to do is create a prototype model with several layers. Using these several layers, the compatibility between the front and back-end functionality can be examined and made sure to be effective. 

The three stages include:

1. Preparing an HTML build to reflect what will be presented

2. To transform the prototype into a fully functional model, it is necessary to link it with the service layers (the most important step). 

3. Finish by successfully integrating the service layers. 

What’s it useful for?

• Saves time by avoiding anything unproductive to the development project.

• By having numerous stages, it is easier to reflect on and present the project at each level. 

The Takeaway

Having a clear vision is one thing, but seeing the execution of that vision turn into something that can be used to benefit a business is the most important part of software development. By focusing on implementing features that save your business time, the ability to scale that business opens up dramatically. 

Software prototyping is just one way that IT service providers help clients meet their goals and be able to scale their operations long-term. 

Written By Ben Brown

—

ISU Corp is an award-winning software development company, with over 17 years of experience in multiple industries, providing cost-effective custom software development, technology management, and IT outsourcing.

Our unique owners’ mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.