How to Build a Cryptocurrency Exchange Platform

There are two types of people in the world: those who still think that cryptocurrencies are a temporary trend, and others who actively use digital money in their lives and even build their fortunes on it. Today there are over 2,000 cryptocurrencies, and new ones are emerging all the time. Blockchain has opened up new business opportunities for us. According to Fortune Business Insights, by 2027 the global blockchain market will reach $69.04 billion. So, it’s not surprising that cryptocurrencies have become a new way of investing. Probably, most market players, inspired by the success of Binance and Coinbase, have thought at least once about how to create their own cryptocurrency exchange. Having experience in developing cryptocurrency exchange platforms, we decided to put together a detailed guide to help you create a quality software product. The case study included.

Table of contents:

  1. How does a cryptocurrency exchange platform work?
  2. Types of crypto exchanges
  3. Key features of a crypto exchange platform
    3.1 User authorization
    3.2 Trading engine
    3.3 User interface
    3.4 Wallet
    3.5 Order book and transaction history
    3.6 Analytical tools for traders
    3.7 Push notifications and alerts
  4. What to look for when developing a cryptocurrency exchange platform
    4.1 Security
    4.2 Regulatory сompliance
    4.3 Liquidity management
  5. Cryptocurrency exchange platform development process
  6. How IdeaSoft can help you build a crypto exchange platform (Biteeu case study)

How does a crypto exchange platform work?

Crypto exchanges are online platforms that allow you to buy, sell, and transfer cryptocurrencies. They are distinguished by high transaction speed and lower fees, which makes them attractive for both small and large investors.  By registering on such an exchange, users can buy and sell digital money, tracking changes in their exchange rates and earn from it. A transaction is carried out as follows. 

  1. A user creates exchange requests by setting the value and volume of a cryptocurrency.
  2. If a suitable counter-offer has already been registered on the site, a deal is concluded between users. 
  3. An exchange earns a percentage of the transaction amounts. This percentage varies from exchange to exchange. For example, Binance only charges 0.1% on every trade made, as well as small fees for currency withdrawals.

For a user, any exchange looks like a regular site with updated information about rates, a base of orders for buying or selling, where network participants can conduct trading operations based on the data provided. But this is just a facade behind which powerful logic is hidden. After all, a crypto exchange must provide a variety of operations from creating accounts, checking balances to transferring funds between wallets and withdrawing currency. Also, we are interested in the high speed of transactions and security as one of the crucial factors of user trust.

Types of crypto exchanges

Before starting to compile a list of required features, you should understand the types of crypto exchange platforms. There are several types of crypto exchanges:

  • Centralized exchanges. This is the most common type of exchange. Such exchanges have a centralized operator who is responsible for security, updates, and functionality. Centralized exchanges manage order books, which record all buy and sell orders. The weak point of this type is that coins are stored in the services themselves, which increases the likelihood of losing your funds due to hacker attacks. Therefore, centralized exchanges work hard to ensure the proper level of security.
  • Decentralized exchanges. Decentralized exchanges provide transfers of funds directly between users’ wallets. This reduces the potential for theft from exchange hacking since the exchange never actually stores cryptocurrency. However, you should keep in mind that in such exchanges, the lack of moderating third-party shifts all responsibility for errors and security to the users themselves.
  • Peer-to-peer exchanges. P2P exchanges provide the sale and purchase of cryptocurrency directly between users. Traders leave their orders as on a bulletin board, and other network participants can respond to the offers and agree on the terms of buy/sale.
  • Instant exchange. These exchanges are very easy to use. They allow users to instantly exchange one cryptocurrency for another. All you have to do is enter a trade order and it will be immediately executed. This is possible because instant exchanges provide access to the trading pairs of many different exchanges on one central service.

You can also find hybrid exchanges, these are ones that combine properties of centralized and decentralized exchanges to improve the quality of services. For example, an exchange might be managed by third-party operators while giving users more control over their funds.

CriterionCentralizedDecentralizedP2PInstant
LiquidityHighLowLowModerate
SecurityLowHighHighHigh
Coin holderExchangeUserUserUser
Fiat availabilityYesNoNoNo
ExamplesBinance, Bitfinex,KrakenEtherdelta, IDEX,TokenlonPaxful,LocalBitcoins, RemitanoShapeShift, Changelly, SimpleSwap
A brief comparison of crypto exchange types

Key features of a crypto exchange platform

An exchange is a complex platform and you need to think over its functionality well to build a good software product. Whether you want to provide trading of one cryptocurrency or many, you need to start with the core features that your platform should have. The structure of a crypto exchange usually consists of the following basic elements.

Key features for crypto exchange platform

User authorization and verification

The user’s path to your exchange begins with authorization, so you need to provide a simple onboarding process. At the same time, users expect the members of this network to be trusted and with good intentions. Verification is important to ensure the transparency of transactions and to minimize the possibility of fraud. Also, it confirms that cryptocurrency exchange complies with international standards. Enable anti-bot verification and two-factor authentication (2FA), ask users to verify their identity with their ID and photo. You need to eliminate any possibility of unauthorized access to accounts to ensure the safe storage of users’ data. 

Of course, people are less willing to provide personal data for verification. It is your job to mitigate their concerns and show that you are not going to share information with third parties. Good UX/UI design can help you make the registration process consistent and user-friendly.

Trading engine

Trading engine is the core of your platform. It’s responsible for the functionality of your exchange. For example, here the system checks funds in user accounts, and the possibilities for a transaction, processes information about prices and commissions, creates schedules, matches up the offers and bids, and the like. To effectively manage their investments, users need to see real-time trading data, so you need to ensure good processing speed. 

Engine development is one of the most difficult parts of developing a crypto platform. You will need a truly experienced blockchain development team to build an effective architecture and lay the correct logic for the exchange.

User interface

The user interface is how people see your exchange. The interface should be simple, clear, and user-friendly. By providing users with an enhanced trading experience, you can count on loyalty. Using the admin panel, a user should be able to place buy and sell orders, view the current order book, past transactions, balances, statistics, etc. Graphs and diagrams make information easier to read. By creating a simple and intuitive interface, you can reduce the time to create and conduct transactions, ensuring the efficiency of your exchange.

Typically cryptocurrency exchanges use a type of chart called candlestick charts. Each candlestick in it shows rate change for the selected period, where green means an increase, and red means a fall. 

Crypto exchange dashboard should provide quick access to features such as:

  • Creating and canceling orders
  • Market monitoring
  • View order history
  • Withdraw funds
  • Contacting support and more.
Biteeu dashboard
Example of crypto exchange dashboard (Biteeu)

Wallet

Wallets allow you to store and transfer your digital money. Usually, when registering, a user immediately receives a wallet. The e-wallets for digital currencies that you provide on your platform must enable secure transactions for withdrawing your virtual money and converting it to fiat currency. Think about how users can replenish their wallets and withdraw funds from them to a card or account. For example, Coinbase allows you to connect a US bank account and easily transfer dollars to or from your wallet. There can be direct bank transfers in manual mode, or Visa or MasterCard services can be used in automatic mode. 

One more thing. There are 2 types of wallets, cold and hot. A hot wallet is the main wallet that is used for crediting users’ funds to the balance and for withdrawing funds. A cold wallet is used as a backup since it is not connected to the Internet and so it is protected from fraud. To secure the exchange from hacking, it often transfers funds from a hot wallet to a cold wallet and vice versa. Decide if you want to provide your users with a cold wallet or just a hot one.

Order book and transaction history

Other essential features of good exchange are order book and transaction history. Exchanges group the actual buy and sell orders separately, and the formed list of open orders is called an order book. When an order finds the offer that matches its conditions, an exchange automatically concludes a deal between users, and the executed orders disappear from the list. An order book allows users to navigate the current bids. 

The list of completed trades or trade history contains key information about the transactions, such as the trade rate, its amount, and the exact time of the operation. History helps users track the performance of their activities. Building your crypto exchange don’t forget about these features. 

Analytical tools for traders

The next feature that will help you attract advanced traders to your exchange is the internal analytical system. Analytical tools allow traders to get additional information about market trends and develop their game strategies. There are tons of technical indicators that traders use, so you should decide what indicators you want to implement in your crypto exchange platform. For example, the Relative Strength Index (RSI) shows the strength of a trend and the likelihood of a trend change. This indicator measures the magnitude of recent price changes and displays the rate at which the price is changing. Moving Average (MA) is another important indicator that is based on past price data and helps traders identify trends by showing the average price over a selected period. Also, popular indicators are Moving Average Convergence Divergence (MACD), which helps in predicting price fluctuations, Stochastic RSI (StochRSI) for identifying oversold and overbought zones, Bollinger Bands (BB), and others.

Push notifications and alerts

Push notifications will help you maintain communication with your users. Push notifications and alerts are convenient both for you and for traders because they will not miss important events. With the help of alerts, you can notify users about promotions, news, and special offers. Traders, for example, can see notifications about price changes, trend changes, coin listing alerts, track exchange listings, and the like. But there is one point. Don’t forget to let users choose which notifications they want to enable. Alerts should be helpful, not annoying.

What to look for when developing a cryptocurrency exchange platform

When developing a crypto exchange, you should make sure that your platform meets some of the requirements and recommendations of Fintech regulation. This includes both regulatory compliance and security standards. So this is what you should pay special attention to when creating an exchange platform.

Security

Security is a key property of any platform that deals with money. If you want to create a successful crypto exchange, you need to pay special attention to the security of data storage and transactions. There are more and more methods of hacker attacks, attackers can either attack your server or hack the admin panel, or attack specific users. Your task is to prevent them from doing this. 

When it comes to securing user accounts, we recommend you to use basic security methods, including two-factor authentication, secure libraries and frameworks, manual administrator confirmation of large transactions, and cold wallets. We also mentioned the importance of user verification, especially if you work with cryptocurrency exchanges for fiat pairs and vice versa. We advise you to follow KYC (Know Your Customer) and AML (Anti Money Laundering). The main purpose of KYC is to make sure that unauthorized users are prohibited from using the service, which is why you ask users for relevant identification documents such as photos, IDs,  bank account or credit card details, etc. 

If you have chosen a centralized exchange type, you will probably need administrators to manage it. Take care of the safety associated with this. Create roles so that each person has access to a small piece of the necessary information and doesn’t have access to the entire database. Especially important operations should require a confirmation from several admins. 

Other ways to ensure security are regular backups, validation of amounts, secure integration with external services (CRM, email, SMS, payment gateways), and more. Discuss with your development team how to implement other advanced security techniques for your platform.

Regulatory сompliance

Compliance is always a plus for the platform. This increases user trust. Moreover, if you intend to work with fiat money, you will most likely have to meet state and government standards. You may need a license, bank account. It all depends on the state in which you are going to register your exchange. If you want to work exclusively with cryptocurrency on blockchain, then regulation is not so important for you, but you should keep in mind that you will also receive any earnings in cryptocurrency.

The best countries for registering cryptocurrency exchanges are those that have been working with cryptocurrency and blockchain for a long time. Among them are Estonia, Malta, Switzerland, Australia, Singapore. For example, Estonia became the first country in the world to implement blockchain at the state level. Read our Where to start implementing blockchain article to find out more about crypto and blockchain regulation around the world. 

Liquidity management

Liquidity is one of the most important factors in cryptocurrency exchange. Traders are looking for a platform that will allow them to easily exchange one asset for another. In other words, an exchange must provide enough buy or sell orders to complete the transaction at a reasonable price. Therefore, when creating your own crypto-exchange, you need to think over mechanisms to ensure liquidity. Three promising options are third-party market makers, cross-exchange market making, and liquidity mining.

  • Third-party market makers. This path involves an agreement with providers who usually trade simultaneously in many different places and can provide the liquidity necessary for one site by entering into transactions on other sites.
  • Cross-exchange market making. This strategy also allows you to contact a market maker, but this manufacturer is the site operator, not a third-party. At the same time, this operator is a market maker on one or several other exchanges.
  • Liquidity mining. This method of maintaining liquidity is most related to cryptocurrency as it relies on decentralized community support. Its essence is that liquidity providers are rewarded for facilitating trade.

Cryptocurrency exchange platform development process

After working through the business part, technical requirements, and choosing the type of exchange, you can start developing your crypto exchange. Make sure you work with a team of experienced developers who can provide you with successful case studies. Choosing an experienced provider will help you reduce development costs. The development process of a crypto exchange platform usually consists of the following stages.

  1. UX/UI design. Based on your requirements and market research, a team of designers creates an effective user interface for your platform. Detailed visualization will allow you to prevent possible UX-related issues and make you see the logic of user interaction with the exchange.
  2. Front-end development. The front end is the implementation of the user interface design. At this stage, developers create a user-visible side of your exchange. The front end part is responsible for the look and feel of your platform which is very important for attracting and engaging users.
  3. Back-end development. The back-end part is responsible for the logic of your platform and all the necessary operations. A development team can use the product of a traditional trading exchange, optimized depending on the exchange incorporation geography. Then this framework is changed to suit your requirements and an individualized trading engine is created. The company can also use various APIs for additional integrations with third-party resources.
  4. Developing enhanced security features. At this stage of the development process, specialists implement various security features to make the platform reliable both for you and for future users. One of the most important security measures is an encrypted database and password-protected user access.
  5. Listing of the digital currency on the exchange. Having an idea of ​​what cryptocurrencies you want to be listed on your exchange, the development team adds the necessary coins to the platform. After that, users will have the opportunity to buy and sell different types of cryptocurrencies.
  6. Launching the exchange. After all the tests and improvements, your crypto exchange platform is ready to go. There is a lot of work ahead to promote and support, but with a high-quality software product, these processes will be much easier.

The nature of blockchain technology and cryptocurrency trading makes them highly dependent on the quality of software development, so we advise you to take sufficient time to choose the right blockchain development partner.

How IdeaSoft can help you build a crypto exchange platform (Biteeu case study)

Biteeu mobile

The IdeaSoft team has extensive experience in blockchain development. Over the past 5 years, we have developed dozens of blockchain-based solutions, including crypto exchange platforms. One of the latest projects is Biteeu. Let me tell you more about it.

The team had a task to develop a fully licensed and compliant cryptocurrency exchange for the European Union. Having studied the requirements, we selected the necessary tech stack and created a powerful and reliable platform for traders, including the following features:

  • Wallet with more than 50 virtual currencies and the ability to add new ones.
  • Security features  – all data is stored on remote servers and protected 24/7.
  • Fully customizable TradingView chart with advanced trading tools.
  • Multilingual – the platform is available in several languages, including English, Russian, and Chinese.
  • Multiplatform support (Web, iOS, Android, Windows, macOS).
  • Mobile app based on the wide order book and fiat money integration.

The development of the project took about 12 months. The IdeaSoft team also created the design for Biteeu. 

Taking advantage of our full-cycle software development services, you don’t have to hire different teams to bring your idea to life. The internal expertise of IdeaSoft allows us to solve a wide range of tasks using company resources. We will help you with design, development, testing, and support. 

If you are looking for a reliable development partner to build a crypto exchange platform, we look forward to cooperating. Drop us a message for a free project estimate or consultation with a technical specialist.

The IdeaSoft Annual Report 2020: Growth and Development

2020 is coming to an end. It was a really challenging year, but we did our best to turn these challenges into new opportunities for IdeaSoft Family and our clients. And it seems everything worked out. The IdeaSoft team has almost doubled. The company gained new recognition in the global market and entered the TOP of the best IT providers in the world. Internal expertise has increased, and the company’s portfolio has been replenished with new promising projects. So, we have prepared a special annual report with infographics to share with you our achievements and summarize the past year.

IdeaSoft achievements 2020

Business Development

The IdeaSoft team is always happy to be a part of cool tech projects. This year, we were lucky to implement several progressive ideas and work with innovative companies like Xion, Bochica, Securitize, and others.  Also, we have developed an internal project CovTracker, a web app that forecasts the risk of catching coronavirus in a specific region.

IdeaSoft’s work did not go unnoticed. The company has received recognition from Clutch.co, TopDevelopers, Upvotes.co, and Techreviewer. IdeaSoft was included in such ratings as Top Blockchain Development Companies, Top Mobile App Developers, Top B2B Companies in Ukraine, Top Global Development Companies, Top Custom Software Development Companies. We are very pleased to receive all these awards and are grateful to our clients for their trust and positive feedback.

IdeaSoft awards 2020

Team Building

It’s never easy to grow in a crisis, but difficult doesn’t mean impossible. In 2020, more than 90 new IT specialists joined the IdeaSoft team, which expanded the company’s internal expertise. Even in quarantine, we tried to maintain a team spirit by holding internal competitions and going to corporate parties. During the year, we held about 20 photo contests, games and established the “Hero of the Month” achievement award. 

With over 100 experienced IT professionals in the IdeaSoft team, we continue to provide services for mobile development, blockchain development, UX/UI design, and dedicated development teams. IdeaSoft always welcomes talented engineers, business analysts, QAs, designers to join our family

Expertise Sharing

IdeaSoft strives to empower technological innovation, so sharing experiences is one of our goals. We hold internal training meetings where our colleagues share their experiences. Also in 2020, IdeaSoft specialists prepared about 30 articles and 10 interviews both for the internal blog and for platforms such as Medium, GoodFirms, Techreviwer, DZone, and others. Stay tuned for the latest updates on the IdeaSoft blog.

Sport Achievements

IdeaSoft football teams defended the honor of the company by participating in Kharkiv Cup and IT League. During the year, the teams played over 50 games and reached the finals. Kharkiv International Marathon has also become a new achievement for the members of the IdeaSoft Family. Our runners showed strength and endurance, having overcome the selected running routes of 1.6, 4.2, and 10 km.

IdeaSoft sport achievements

We are looking forward to the new year to achieve even greater results. IdeaSoft team is always open to new partnerships. Contact us if you want to start a software project. We will be happy to help you.

What Are the Top Fintech Trends in 2021

It’s incredibly interesting to watch the financial industry is changing. Over the past decade, there have been so many technological breakthroughs that have influenced our habits, gave us more opportunities, and raised fintech to a new peak. Even more, we are still at the epicenter of these events. The Covid-19 pandemic canceled out the forecasts of experts on the development of the fintech industry. Everything that was clear yesterday is uncertain today. But the world is coming back to life. We can speak more confidently now about what awaits the fintech industry in the near future. Based on the latest research and personal observations, we have prepared for you a detailed article on trends in fintech 2021.

Table of contents:

The biggest challenges for Fintech 2020-2021

No matter how promising the industry is, there are always challenges that have to be overcome. Fortunately, fintech is one of those industries that Covid-19 has not critically affected, although there are still some consequences. In fact, the financial industry is experiencing the same difficulties that have been in the spotlight in recent years. Among them are the following:

  • Outdated technology. Many traditional financial institutions still use outdated technology and business models. The competition is steadily growing. As clients, we expect more. But many companies try to compete with fintech startups using outdated technologies that hinder the development of the entire industry. The pandemic has accelerated digital transformation, but it takes time and requires internal changes within the company, including customer interaction models and business philosophy.
  • Regulations. Since fintech uses many online technologies that are designed to speed up the processes of interaction with a client and making payments, the importance of data confidentiality is growing. A new approach to financial management requires new laws. The first Payment Service Directive laid the foundation for the rapid development of the fintech industry in Europe back in 2007. It also laid the legal foundation for SEPA (Single Euro Payments Area). Since then, legislation related to fintech has been constantly evolving and strives to increase its value for customers in order to compete with traditional institutions. The achievements of recent years are GDPR, PSD2, etc.
  • Secure data storage. Secure storage of user data is another risk of modern online businesses. Leakage of such data as payment card numbers, passwords is simply unacceptable. Fintech companies do their best to prevent this, but failures happen. Especially when users want to see transparency in their operations, they need a solution that combines transparency with security. Therefore, the question of secure storage and transfer of user data remains open.
  • User trust. Following from the previous point, this one is important too. If a financial institution doesn’t provide clients with the necessary level of services, threatens data security, then clients lose trust, and the lack of trust leads nowhere. Bank security, for example, is one of the most important selection criteria for clients. And with more and more data being transferred online, cyber attacks have become more frequent lately. According to Security Intelligence, the average cost of a data breach in 2019 was $3.92 million.
  • Termination of funding. This challenge stems from recent events. According to CB Insights, COVID-19 has stalled funding for fintech technology as the total number of deals has dropped sharply for fintech companies since late 2019. Funding for startups is also decreasing as traditional financial institutions that previously preferred to work with start-up businesses are now creating internal development departments and working on their own new financial solutions. Under these conditions, startups, which have been the driving force behind fintech development in recent years, will be less likely to succeed.

Realizing all these difficulties, financial market players continue to improve the quality of services and offer new solutions based on the latest technology trends.

Digital Banking and Neobanks

More and more banks are switching to the digital-only banking model, which means that all services are provided online and there is no physical representation of the bank. Such banks have many advantages, both for the business itself and for customers. As a client, you don’t have to stand in queues, come to the bank to open an account, sign a bunch of documents, instead, you can pay bills quickly, have convenient expense management, quick balance views, and real-time analytics. All operations take place online and mostly automatically. This means that the banks themselves can save money on office and staff costs. Chatbots, mobile POS terminals, and new underwriting models allow you to process user requests automatically in real-time.

You should know that there is a difference between digital banks and neobanks. Digital banks are often the online arm of a traditional bank, while neobanks are completely digital and independent. Users around the world point to the convenience of neobanks, primarily related to personalized customer experiences. So you can see your balance in real-time, keep an effective record of personal funds with no monthly fees or withdrawal costs.

Contact_form_for_consultation

Maintaining competitiveness, some traditional banks are partnering with various tech platforms to provide more innovative services. PwC’s last year poll found that among companies looking to partner with other sectors for growth, 47% are likely to partner with fintech companies. This trend continues this year. We live online now, so such online platforms are a lifeline for us. The future belongs to digital banks.

Big Data

Online technologies are associated with a huge amount of data that needs to be safely stored and processed quickly. According to Statista, the global big data market is forecasted to grow to 103 billion U.S. dollars by 2027. Today’s finance companies strive to provide a more personalized experience for their customers, so they use customer data to deliver more tailored offers at the right time.

Financial companies try to collect as much information about the client as possible to draw up a detailed portrait of each customer and build an effective work strategy. Also, by analyzing data, firms can predict future events, personalize offers and thereby increase customer loyalty. Thanks to working with big data, financial companies can segment customers, receive user insights in real-time, predict which services will be of interest to customers in the future, and optimize prices. Summarizing, we can say that big data allows you to transfer your business to a client-focused model in order to achieve great results.

But the more data, the more difficult is to effectively manage it while ensuring the security of customer information from third parties. Therefore, the financial industry has been investing heavily in data collection, and processing technologies for the past ten years: data warehouses, analysis tools, data visualization tools, forecasts based on current information. User expectations have changed, competition is intensifying, so data needs to be processed quickly and qualitatively to attract and retain customers while maintaining security. The fintech industry will continue to work on this in the coming years.

Blockchain

Blockchain is a promising technology that has been inextricably linked to the financial world since its inception. In many ways, blockchain can help combat industry challenges by providing opportunities for excluding third parties from the transaction process, securely storing data, and building a transparent system. While blockchain used to be the domain of startups, in recent years many traditional institutions have begun experimenting with this technology building new blockchain-based solutions. The number of blockchain wallets has reached over 50 million Blockchain wallet users at the end of June 2020, according to Statista. This is a huge number that shows the readiness and willingness of the market for the implementation of distributed ledger technology. 

For the financial sector, blockchain is primarily an opportunity to build a P2P system with lower commissions and faster payment speed. According to Finivi, the crypto market had a total market capitalization of over $155 billion as for March 2020. Not surprisingly, financial companies are also trying to work with cryptocurrencies, which make cross-border payments cheaper and easier. Plus, blockchain makes it possible to build a secure and transparent system at the same time, which best meets the needs of users of financial services.

A special role in the implementation of blockchain is played by the possibilities associated with smart contracts, which are designed to reduce transaction costs. Self-executing programmable contracts can dramatically improve the quality of contract-related financial services such as loans and insurance. Smart contracts can automate processes such as the submission of an order by a client, for example. Also, they increase the level of trust in financial institutions, since the parties simply cannot fail to fulfill their obligations, and the whole process is absolutely transparent and traceable. Market Research Future forecasts that the global smart contracts market will reach approximately 300 USD Million by the end of 2023

Read our recent article Where to start implementing blockchain

Contact_form_blockchain

AI-based solutions

The use of AI-based technologies in finance has already become more than just a trend. Advanced artificial intelligence algorithms can automatically determine if a client matches a particular segment and launch a chain of the most appropriate actions. Using a set of preprogrammed criteria, artificial intelligence improves the efficiency of daily operations and the quality of the user experience. Financial institutions use AI-based solutions to build chatbots and implement fraud and risk detection features. According to Finivi, AI is projected to reduce bank operating costs by 22% around 2030. And according to a Juniper Research report, chatbots will save $7.30 billion worldwide by 2023.

Artificial intelligence minimizes the likelihood of human error, which is why more and more companies are focusing on process automation. Also, AI processes information much faster and is able to provide instant solutions, which ultimately helps to reduce the costs and risks of the financial company. Artificial intelligence is one of the main trends in banking, especially when it comes to neobanks, where user experience comes first.

The development of AI-based solutions is gaining momentum, becoming more and more complex. For example, there are systems for the automatic assessment of the best directions for investment, assistant systems for creditors and bankers, which make it possible to automate both routine administrative tasks and more complex analytical ones. Experts predict that artificial intelligence will become the number one trend in the coming years.

Cybersecurity

Financial systems need to be secure to inspire user confidence. Cyber ​​threats can have dire consequences and further loss of reputation for a financial company. Problems arise for many reasons, the main of which is cooperation with third parties, in the reliability of which you cannot be sure, the active use of mobile technologies and online data transmission, a growing rate of hacker attacks. The damage associated with cybercrime will reach $6 trillion a year by 2021, according to Cybersecurity Ventures. Therefore, cybersecurity is one of the main directions for the implementation of new technical solutions.

Among the main areas of work on cybersecurity for fintech companies are the following:

  • Transaction security, including transaction intelligence risk control and secure identity authentication.
  • Data security management, including personal data protection.
  • Cybersecurity, including security service and security technical tools.
Global_Security_Market_Statista


However, improving the quality of the security system is not only related to technology. Many fintech companies are working on internal security and threat response strategies, as well as raising awareness among both employees and customers. Fintech companies like no other segment are connected with money, which makes them especially attractive for cyberattacks. A recent study shows that banks are investing about 70% of their funds in developing and implementing security strategies. Realizing this, the financial market in recent years has been investing a lot in the development of security systems, including blockchain solutions.

WealthTech

WealthTech brings together wealth and technology to deliver better financial management solutions. During the lockdown, this direction of fintech received a new round of development. According to Fintech Global, funding for WealthTech in the first quarter of 2020 has reached $1.7 billion. These are impressive numbers that show the development prospects for WealthTech. Many entrepreneurs realized that it is possible to successfully run business online, so new digital services for managing personal and corporate finances have appeared. And experts predict that in the near future, the use of such advanced technologies as AI and Big Data will give us even more effective financial solutions.

Among the most popular Wealthtech services are Robo-advisors. These are automated platforms that use algorithms and machine learning to help investors make important financial decisions. Robo-advisors provide users with recommendations based on market data and the user’s personal goals. Perhaps, in the future, such programs will be able to completely replace financial advisors, but for now, they just offer additional opportunities for investors.

Other interesting solutions from Wealthtech include digital brokerage platforms that provide easier access to information about the stock market, micro-investment platforms that allow you to regularly invest small amounts of money without having to pay a commission, and others. As the goal of the fintech industry is to create new, simpler, and more profitable financial solutions, so WealthTech is intended to make money management more accessible and convenient for everyone.

Putting it all together

Experts predict a bright future for fintech, despite all the challenges. The financial market is changing, it is a fact. The industry is inextricably linked to the online and technical process, therefore it uses the latest technologies such as blockchain and AI to create more profitable financial solutions. Security is still the main risk area for financial companies, so the development of security strategies is firmly entrenched in the ranks of the 2021 trends. Anyway, current trends show that the industry continues to develop and we should expect new breakthroughs in the near future.

The 10 Most In-demand Programming Languages in 2021

The popularity of different programming languages ​​changes every year. New technologies are replacing some older languages, while some older ones are gaining more attention and adoption. Therefore, if you ask an IT specialist which programming language will be the same in demand in 5 years, you won’t get a definite answer. But what we can do is follow the current trends and determine the main directions for the coming year. IdeaSoft specialists studied the IT market to compile a list of the most in-demand programming languages ​​for 2021.

Table of contents

  1. Most popular programming languages of 2020
  2. Python in 2021
  3. Java in 2021
  4. C in 2021
  5. JavaScript in 2021
  6. C# in 2021
  7. PHP in 2021
  8. R in 2021
  9. Swift in 2021
  10. Go in 2021
  11. Ruby in 2021
  12. Conclusions

Most popular programming languages of 2020

We can assume that the more often a programming language is mentioned, the more in-demand it is. The popular world rankings TIOBE and PYPL are based on this statement. TIOBE measures the number of searches related to programming languages ​​on popular portals such as Google, Bing, Yahoo!, Amazon, YouTube, and Baidu. PYPL measures how many times language tutorials are searched on Google, using Google Trends. Usually, the results of the ratings have slight differences due to the different ways in which the ratings are constructed. 

According to TIOBE, in November 2020, the highest position in the ranking of programming languages ​​was held by C with a rating of 16.21%. It was followed by Phyton with the highest mentions growth, + 2.27%. And Java ranks third. It’s very interesting that since the creation of the TIOBE index almost 20 years ago, Java and C have always been in the top 2 positions for more. In 2020, unexpectedly for many, Python replaced Java and took second place. The creators of the rating suggested that the popularity of Python grew because of the rapid development of fields such as data mining, artificial intelligence, and numerical computing. However, Python returned to third place in December.

TIOBE Programming Languages Chart
TIOBE Popularity of Programming Language (November 2020)


The PYPL ranking over the same period gives us a slightly different picture, where Python is the highest-ranking, with a 30.8% share. Java comes second with 16.79%, and JavaScript comes in third. In this rating, C only ranked sixth.

PYPL Best Programming Languages
PYPL Popularity of Programming Language (November 2020)


We decided to add to our list of the 10 most in-demand programming languages ​​in 2021 those languages ​​that entered the top 20 of both ratings. So let’s start looking at the strengths and weaknesses of the most popular programming languages ​​for 2021.

Python in 2021

It’s safe to say that Python will be one of the strongest players on the market in 2021. Both world rankings of programming languages ​​place Python in the top two. This programming language first appeared back in 1991 and is gaining popularity year after year thanks to its open community. Python syntax is quite simple, so a developer takes fewer steps when developing a software product. Software development companies prefer Python because of its versatile features such as flexibility, object-orientation, cross-platform, and less code. 

Python has a ton of frameworks and libraries that simplify the process of coding and reduce development time, and its excellent data processing performance makes it the #1 programming language for creating AI/ML-based solutions. Well-known platforms such as YouTube, Google Search, Facebook, and Instagram are built with Python.

AdvantagesWeak Points
+ Easy to learn and use
+ Productive language
+ Open-source
+ Cross-platform
+ Rich libraries
+ Easily integrates with other programming languages ​​including Java, C, and C ++
– Low speed
– Memory consumption
– Weak in mobile computing
– Limitations with database access
Advantages and disadvantages of Python

Java in 2021

Java is the most widespread programming language, which has confidently taken first positions in the ratings for many years. Due to its platform independence and high adaptability, this programming language is used in both desktop and mobile development. Even though Google announced in 2019 that Kotlin is now the language of choice for Android app developers, Java is still widely used for mobile app development. Also, Java supports billions of electronic devices in real-time, and according to Oracle, there are over 3 billion applications, websites, and devices that run Java.

According to Statista, the number of Java developers worldwide will reach 28.7 million in 2024. Twitter, LinkedIn, Amazon, Netflix, eBay are all built with this programming language. 

AdvantagesWeak Points
+ Open-source
+ Platform independent
+ Provides memory allocation
+ High-quality code compilation
+ Stable
+ Allows distributed computing
– Low speed
– Memory consumption
– Verbose and сomplex code
– Far from a native look and feel on the desktop
Advantages and disadvantages of Java

C in 2021

C is one of the oldest programming languages. Even more, languages ​​such as C++, C#, Java, and Objective-C were based on the C syntax. But even with a huge number of younger analogs, C is still widely used today, since it’s a low-level programming language that supports direct control of the hardware. The C language is used for programming microcontrollers and developing embedded software. Also, programs written in C are easily portable to another language with few modifications. 

According to TIOBE, at the end of 2020, C became the #1 programming language, supplanting Java. This growth in popularity is associated with the fact that C is a cross-platform language that is used in embedded devices and software for medical devices, which is very important in the context of the coronavirus pandemic.

AdvantagesWeak Points
+ Portable language
+ Many built-in functions for developers
+ Structure-based
+ Allows system programming
+ Efficient and powerful
+ High speed of compilation
– No run-time type checking
– Lack of exception handling
– Low level of abstraction
– Doesn’t have the concept of constructor or destructor
Advantages and disadvantages of С

JavaScript in 2021

Of course, JavaScript is the #1 language for front-end development, but recently it has also been used for back-end development. JavaScript is widely applied in game development, web, desktop, and mobile applications. This language is quite easy to learn, which contributes to its popularity among novice developers. According to a StackOverflow survey, JavaScript became the most used programming language in early 2020. Nearly 70% of professional developers responded to the survey code in JavaScript.

JavaScript has a powerful ecosystem that simplifies the development process. Plus, the JavaScript user community is actively improving the language, addressing many of the shortcomings.

AdvantagesWeak Points
+ Works instantly in a web browser
+ No compilation requirements
+ Multipurpose language
+ High speed and productivity
+ Easy to learn and use
– No ability to read and download files
– No early detection of errors
– No remote access support
– Low security
Advantages and disadvantages of JavaScript

C# in 2021

C# is a fast, secure, and full of rich libraries programming language developed by Microsoft as the main language for working with the .Net Framework. C# is used for a wide range of tasks from developing server apps to mobile games. Also, since C# is a multi-platform language, it’s used for machine learning. With Xamarin, you can also build programs and apps in C# for operating systems such as iOS, Android, macOS, and Linux. Developers prefer this programming language because it simplifies the development process minimizing time and resources.

C# is easy to learn, there is a lot of documentation for developers on the Internet. Also, Microsoft is actively investing in the development of this programming language to keep it popular in the market. Therefore, in the coming years, C# will continue to improve and will be an important player in the market.

AdvantagesWeak Points
+ Component-oriented programming language
+ Supports Microsoft products
+ Supports type safety
+ Simplifies the programming process
+ Provides automatic garbage collection
+ Can work with common codebases
+ Fast compilation
– Paid licensed version
– Priority focus on the Windows platform
– Low execution speed
Advantages and disadvantages of C#

PHP in 2021

According to W3Techs, PHP is used by 78.9% of all websites with a well-known server-side programming language. This programming language is used to create dynamic and static websites. PHP is so popular in the world of the web since it’s an open-source that has a large set of built-in tools and additional modules for developing web apps. Plus it automatically supports HTTP Cookies. This programming language is the basis for such giants as Facebook, Wikipedia, Tumblr, Yahoo!, Baidu, Badoo, Mailchimp, Flickr.

PHP is also easy to learn. It provides solutions to a wide range of web tasks. This programming language allows you to create high-quality web apps in a very short time with products that are easy to modify and maintain in the future.

AdvantagesWeak Points
+ Cross-platform
+ Open-source
+ Simplifies the web development process
+ Have a vast ecosystem
+ Provides various automation tools for deploying and testing apps
+ Web server support
– The main focus on the web
– Security issues
– Bad error management
– Some syntax inconsistencies

Advantages and disadvantages of PHP

R in 2021

R is an open-source language for statistical data processing. This programming language is applied in the fields of data science, statistical computing, and machine learning. R combines well with other programming languages ​​such as C++, Java, SQL. A large number of financial and computing companies use R in their research and development. One of the reasons for its popularity is the free open source packages for statistics, analytics, and charts. 

R has become the global standard in statistics, and the world’s top universities teach their students this language. Also, the growing interest in machine learning encourages developers to use it. Thus, R is consistently among the top ten ratings of the most popular programming languages.

AdvantagesWeak Points
+ Open-source and free
+ Cross-platform
+ Inclusive statistical analysis
+ Wide possibilities of integration with other languages
+ Large selection of free libraries
– Poor memory management
– Security issues
– Poor performance

Advantages and disadvantages of R

Swift in 2021

Swift remains in the top ten most demanded programming languages, while iOS apps are popular. According to Statista, in 2019, 1.84 million mobile apps were available for download on the App Store. And the number of iOS applications is growing every year. Swift, developed by Apple in 2014, has largely supplanted Objective-C because it’s easier to read and more reliable. This programming language allows you to create rich applications backed by robust and secure code.

Swift is very easy to learn. Swift code is simplified and more like English which makes it easier to read. We used Swift to create Famer and Versara projects.

AdvantagesWeak Points
+ Automatic memory management
+ Open-source and free
+ Good code readability
+ Good scalability
+ It’s fast
+ Secure
– Slow when interacting with other languages
– Unstable
– Doesn’t support earlier iOS versions

Advantages and disadvantages of Swift

Go in 2021

Golang was created by Google, but it has long gone beyond a single company. Facebook, Intel, BBC, Yahoo, Adobe are already adopting this programming language. Today Go is used to build microservices, web applications, and solving systems programming tasks. Go is a language with simple syntax and detailed technical documentation. It’s most commonly used on Linux and macOS systems, and slightly less commonly on Windows. According to the Go Blog, Go’s engagement rate increased to 34% in 2019, with 3 out of 4 respondents preferring the language. Both TIOBE and PYPL ranked Go as the thirteenth most popular programming language.

AdvantagesWeak Points
+ Open-source
+ Fast language
+ Simple syntax
+ Well-scaled
+ Large selection of tools
+ Good code readability
– Lack of flexibility
– No generics
– Complex dependency management
– Complicated error handling


Advantages and disadvantages of Go

Ruby in 2021

And the last promising programming language on our list is Ruby. This language is dynamic, which means it speeds up the development process. It’s used to solve a wide range of problems in different fields, but it occupies a special niche in web development thanks to the Ruby on Rails framework. According to Hotframeworks, Ruby on Rails is one of the most popular web frameworks in the world. Ruby is used by Twitter, Soundcloud, Goodreads, and Kickstarter.

AdvantagesWeak Points
+ Open-source
+ Has a large set of developer tools
+ Speeds up the development process
+ Simple syntax
+ Easy maintenance & updates
+ Active community
– Slow processing
– Poor Windows support
– High memory consumption


Advantages and disadvantages of Ruby

Conclusions

So, the most in-demand programming languages ​​in 2021 are Python, C, Java, JavaScript, Go, Ruby, C#, Swift, PHP, R. Of course, the list goes on because there is no universal programming language that suits everyone. However, the listed technologies will play an important role in the near future, and these languages ​​are worth paying special attention to, whether you choose a tech stack for a project or a career path. 

IdeaSoft engineers know well which programming language is better to choose to implement your tech idea and are ready to help you with this. Contact us to start your project.

How 5G is Transforming the Healthcare Industry

5G promises to be a major catalyst for the development of advanced technologies in the near future. There will be about 1.9 billion 5G subscriptions worldwide by 2024, according to Statista. Also in line with Omdia’s research, the number of active 5G connections around the world has hit 63.6 million as of the first quarter of 2020. Many industries are already beginning to experience the 5G transformation. Since engineers gained access to a faster and more powerful next-generation communication standard, it became possible to implement tech solutions that would be unreasonable with 3G or 4G LTE. How is 5G technology transforming healthcare, one of the most fundamental industries? Let’s find out!

Table of contents: 

  1. Why 5G matters for healthcare
  2. The main features of 5G technology
  3. Benefits of 5G for medicine
    3.1 Improved data management
    3.2 Telehealth services
    3.3 AI-based medicine solutions
    3.4 Remote health monitoring
    3.5 Increased patient engagement
  4. Challenges of implementing 5G in healthcare

Why 5G matters for healthcare

Healthcare is one of those industries that has been waiting for 5G to start implementing its intended changes. Experts have long been talking about promising tech solutions for medicine, such as the Internet of Medical Things (IoMT), AI and VR-based tools, robotic surgery tools, precision medicine, and more. Look what happens now. There is a growth of devices and machines in healthcare that help deliver better, more efficient services, transforming healthcare facilities into smart hospitals. And even more, thanks to technology, we can monitor our health, contact doctors via the Internet and prevent diseases. Yes, technology made it possible, but the digital transformation of healthcare couldn’t have fully taken place until the advent of 5G.

When it comes to such automation of medical services, the question immediately arises of the network’s ability to process large amounts of data. Older networks couldn’t provide the desired power, while 5G allows reliable connections to facilitate the data transfer that healthcare workers need. So, telecom software solutions for healthcare are becoming an excellent market for development in the near future, which promises us the implementation of long-planned medical innovations. According to the Ericsson Business Potential 5G report, the potential revenue of telecom operators from solving the digitalization issues of healthcare with 5G is expected to reach $75.7 billion by 2026. 

telecom operator revenue

The main features of 5G technology

So how exactly is 5G addressing the digitization challenges of the healthcare industry? It is all about the characteristics and capabilities of the new network. 5G has a higher bandwidth than 4G technologies, resulting in faster Internet connections, large-scale communication systems between devices, and lower battery consumption. This allows 5G to quickly transfer large data packets without slowing down the network. Also, 5G technologies provide increased responsiveness, which means the ability to reach many devices connected to the network. Therefore, it is expected that 5G will become a driving force behind the development of the Internet of Things, allowing healthcare to create complex systems of smart medical devices.

5G Specifications:

  • Increased speed from 10 to 100 times over 4G network
  • 1000x bandwidth per unit area
  • 1-millisecond latency
  • 90% reduction in network energy usage
  • The subscriber’s movement speeds up to 500 km/h
  • The total number of connected devices is up to 1 million/km2

Thus, 5G is a faster network that provides increased data-transfer speed and allows the efficient connection of multiple devices. With these properties, 5G technology can maintain connectivity and quick data calculation. For medicine, this opens up additional opportunities, in particular, the involvement of artificial intelligence in decision-making in real-time, and leveraging other advanced technologies to improve patient care.

Benefits of 5G for medicine

The advent of 5G has catalyzed the implementation of many innovative technologies that require more network power and could lead to revolutionary new medical solutions. Here are the main directions that have taken a new round of development thanks to 5G.

Improved data management

Healthcare professionals not only work with a huge amount of patient data, what is more important this is sensitive data that must be stored securely. New concepts of healthcare services involve the storage of electronic data records and their fast and secure transfer. Now think about what the data storage should be to provide the content and transmission of such information. For modern medicine, processing speed is crucial, and some medical files, such as imaging files, are very large. 5G allows you to send data much faster, so clinicians can receive timely, high-quality image files created by MRI, CAT or PET scans that are critical to prompt decision-making. In this way, 5G enables rapid data transfer between doctors and hospitals, ensuring timely diagnostics and treatment. Improved access to data and the ability to manage them in real-time will have a positive impact on the entire healthcare system. 

You can already find cases of 5G application in health data management. In early 2020, KT Corp., Korea’s largest telecommunications company, and Samsung Medical Center (SMC) announced the testing of 5G-based healthcare IT solutions. The companies unveiled several apps and devices that use the next-generation network to assist doctors in operating rooms in real-time, as well as to quickly send images with analysis results at an average speed of 1 gigabyte per second.

Telehealth services

According to MarketsandMarkets, the projected market of the global telehealth/telemedicine is expected to reach $191.7 billion in 2025. The idea of ​​remote interaction between doctors and patients has become more relevant than ever, as the Covid-19 pandemic has spurred demand for medical services. Telemedicine, chatbots, and robots are used to collect information, treat patients, make diagnoses, which is especially important during a lockdown. 5G with faster network speeds allow doctors to remotely interact with patients without worrying about network outages, blackouts, or delays. 

5G also enables seamless connectivity through the integration of medical devices into a single network. So, when technology is commonly used, patients will have access to a wider range of specialists and will be able to receive timely, quality medical services from anywhere. 

AI-based medicine solutions

Artificial intelligence and machine learning have great potential for the healthcare industry. For example, AI helps diagnose diseases such as cancer, heart diseases, skin lesions, and others. AI algorithms can draw conclusions much faster, making diagnostics more accessible to the public. Also, machine learning is one of the ways to make medicine more personalized. As each person responds to the same treatment individually, algorithms can simplify the statistical collection and help discover which characteristics indicate that a patient will have a particular response to a particular treatment.

However, when it comes to AI-based solutions, the problem of large amounts of data used in real-time appears. 5G can solve this issue with high bandwidth. The combination of 5G and AI will create a network of smart devices that communicate with each other and together expand the background for decision-making. It also opens up additional opportunities for the development of the internal medical ecosystem. For example, doctors at Rush University Medical Center are trained using virtual and augmented reality (AR/VR) systems, with a complete picture of what is happening in a patient’s body.

The role of AI in healthcare

Remote health monitoring

Another challenge for medicine is a timely response to emergencies. Thanks to high-speed 5G, paramedics can send patient data directly from the ambulance, as well as connect an experienced specialist to provide emergency treatment in his/her online presence. This requires a high-quality uninterrupted connection. Experts also talk about using drones with real-time 4K video cameras, traffic monitoring, and rerouting systems. Also, uninterrupted remote patient monitoring will allow people with chronic diseases to promptly contact doctors, and doctors сan monitor the condition of their patients wherever they are.

The global market for remote patient monitoring will reach $2.14 billion by 2027, according to the Reports and Data report. The same study shows that approximately 88% of hospitals have invested in remote patient monitoring technology. The growing number of patients negatively affects the operation of clinics, and remote monitoring can help clinicians deliver more effective patient care in this situation.

Increased patient engagement

And last but not least, so many technologies are increasing patient engagement in monitoring their health. With easier access to medical staff and devices for checking our health, we will pay more attention to this issue, minimizing the occurrence of chronic diseases. For example, at the Medical University of Birmingham, Alabama (UAB), automated phone calls have helped increase patient appointments. This demonstrates the role of technology in increasing patient engagement with their health. And if patients can become more involved in health monitoring, they are more likely to adopt healthy lifestyles, improving treatment outcomes, and reducing health care costs.

Challenges of implementing 5G in healthcare

The prospects for using 5G in the healthcare sector look bright. But unfortunately, there are certain challenges that the industry is facing and that prevent the widespread use of these technologies. To fully leverage the power and advantages of 5G, we have a lot of work to prepare the base for this.

Among the main challenges are:

  • Most 4G smartphones are not 5G compatible, so we need to wait for the widespread adoption of 5G devices.
  • Work on installing 5G towers is still spinning, so we now have limited network coverage.
  • Most clinics need to update medical technologies and applications to work with 5G.
  • High cost of building a network.
  • Government regulation of aspects related to 5G deployments such as EMC regulations, infrastructure sharing and cybersecurity.

There is no doubt that the transition to 5G requires a lot of preparatory time-consuming work. Only then we will get new healthcare software solutions that will truly transform medicine in a promising way. But the fact remains, 5G technology can become a real driving force behind the development of the healthcare industry around the world. Step by step, starting with improving data storage, ensuring traceability, increasing the availability of medical services and other solutions, we can create a new progressive healthcare system.

11 Mobile App Development Trends to Watch in 2020/2021

With the development of mobile technology, our lives are changing for the better. Various mobile applications provide a huge number of possibilities for both users and creators. Using a smartphone, we can learn, communicate, buy, have fun, and make money.  But experts assure us that this is not the limit and we should expect more. Recent events have made mobile development experience new transformations. So, what are the trends in the mobile app development market right now, and what’s the next big thing in mobile technology? Find the answers in this article.

Table of contents:

  1. Is mobile app development still in demand?
  2. The hottest mobile app trends of 2020
    2.1 AI/ML-based apps
    2.2 Cloud-based applications
    2.3 M-Commerce growth
    2.4 Mobile payment apps
    2.5 Blockchain and decentralized apps
    2.6 Beacons technology
    2.7 IoT-enabled mobile apps
  3.  Mobile app trends to watch in 2021
    3.1 5G Technology
    3.2 Instant apps
    3.3 On-demand apps
    3.4 Protecting the privacy of user data 
  4. Wrapping up

Is mobile app development still in demand?

Mobile development is in demand as never before. The number of smartphone users is growing every year, and the lockdown associated with the coronavirus pandemic this year has only enhanced this trend. Various studies confirm this. According to Statista, there are 2.87 million apps on Google Play and 1.96 million apps on Apple’s App Store available for download and there were 240 billion downloads of mobile apps worldwide back in 2019. At the same time, according to the App Annie report between February 2020 and April 2020, combined downloads of apps and games across iOS and Google Play increased from 9.1 billion to 12 billion. 

The golden rule is that demand generates supply. The number of mobile applications is growing. Developers are looking for new ways to meet the needs of society adopting new technologies, and companies are trying to make their services more accessible and strive to reduce the distance between a company and customers thanks to mobile apps. So, despite the economic crisis, the mobile app development market was not affected and according to Statista, worldwide mobile app revenues will grow to $935.2 billion by 2023.

Mobile app revenues 2014-2013

The hottest mobile app trends of 2020

In 2020, the popular technologies of recent years have continued to evolve. The unexpected pandemic and related events shifted the focus of industry development, but in general, it created good conditions for the emergence of new innovative software solutions. Here are the hottest mobile development trends in 2020.

AI/ML-based apps

AI and machine learning have become major trends in many industries in 2020. AI-powered features in apps are doing more than just increasing engagement with stickers and filters. They also enable the capabilities of detailed analysis of users and predicting their future behavior to deliver more personalized services. For example, chatbots allow you to provide uninterrupted real-time communication with clients. By analyzing data about a user and the history of his interaction with the app, a chatbot can come up with the best solution within minutes. Also, voice and face recognition are becoming integral security features in mobile apps. 

Even more, smart technologies help not only protect data but also improve security in the real world. For example, we used AI and V2V technologies to build Nexar. This is an AI dashcam app for iPhone and Android, that instantly detects dangers on the road and provides “watch out” life-saving warnings. 

AI-powered mobile solutions also provide an improved user experience by adding interactivity and innovation to mobile applications. Recognition of speech, text, and pictures, voice assistants, location-based app suggestions, automated photo classification, and this is not a complete list of options for using artificial intelligence. That’s why AI and ML are used to create educational, financial, medical, entertainment, travel apps, and more. According to Statista, revenues from the AI market worldwide will reach $3061 billion by 2024. So we will definitely hear about new AI-powered mobile solutions in the coming years.

Cloud-based applications

One of the main challenges of mobile development is to create a functional application that wouldn’t take much device power. By downloading apps you take up memory and use the system resources of your smartphone. Cloud-based apps have become the solution. They use cloud computing technology instead of the device’s hardware, so all data is stored and processed in the cloud. 

Cloud applications are cost-effective and reliable. This is one of the best options for building a cross-platform app. It is also easier to manage such an application. All you need to do is implement a cloud management platform (CMP) solutions. CMP allows you to manage cloud apps and services deployed across multiple cloud environments. To do this, CMPs use an extensive catalog of APIs to extract data from the entire cloud environment and transfer it to an integrated system. Soon, increased use of 5G will strengthen this trend by providing new power for the development of cloud computing. According to Report Linker, the global cloud computing market is expected to reach $623.3 billion by 2023.

Usage of public cloud platform services
Usage of public cloud platform services running apps worldwide 2020 (Source: Statista)

M-Commerce growth

Selling and buying products via mobile apps is gaining popularity. Until recently, smartphone purchases were available through web applications, but native apps are more user-friendly, which increases the likelihood of a purchase. Unsurprisingly, m-commerce has become the preferred direction for merchants. According to Business Insider Intelligence, mobile commerce will reach 44% of e-commerce in 2024. 

49% of consumers use their smartphones for shopping, as reported by BrizFeel. Why do users choose mobile shopping apps? First, they make it easier to browse products. Secondly, apps provide an improved user experience. For example, an application collects data about a user, which means you can create customized offers for each customer. Also, such apps remember transactions and allow them to be carried out faster when buying again. Sellers are also encouraging customers to buy using mobile apps by offering special pricing and terms when shopping in apps. Together with such solutions as AI, cloud computing, 5G, mobile payments apps m-commerce has a great future ahead.

Mobile payment apps

Full-fledged purchases using mobile apps are impossible without payment applications, therefore, with the growth of e-commerce, the number of digital wallets is also growing. The secure transfer of funds from one account to another without involving third parties is called peer-to-peer transactions. P2P payment apps development is one of the main trends of the fintech industry. According to eMarketer, the value of P2P mobile transactions will reach $612.23 billion by 2023. And as reported by Statista, the total revenue driven by transactions over mobile phones is expected to hit $423.24 million in 2022. 

Revenue driven by transactions over mobile phones

Mobile payments are convenient for both users and merchants. A user can quickly and easily pay for a product or service using electronic money, and a seller receives payment directly to a card or account, no matter what the distance between them. There are several types of mobile P2P payment apps, including the following:

  • Bank-based apps, which involve a bank as a party to the payment.
  • Social media platforms that have built-in payment features to help transfer money without leaving an app.
  • Mobile OS systems, built-in mobile features of operating systems such as Apple Pay, Samsung Pay, Android Pay.
  • Standalone services are independent providers offering their own payment systems.

The development of their own payment apps helps companies to improve the quality of services for customers, and also allows them to save on fees and international transactions. Some companies are even introducing cryptocurrency payment functionality, expanding payment options for their users. Xion is a great example of such an application.

Blockchain and decentralized apps

Blockchain is another promising technology of recent years that has been widely used in various areas of development. Companies are adopting blockchain to create a secure, distributed database that provides transparency and system reliability. In a blockchain, all data is stored in blocks linked to each other by cryptographic methods, which ensures the immutability of the database. I mean, no one can change or delete information from a blockchain unnoticed, all data remains in the system.

Blockchain is an effective technology for creating cross-platform applications. Since it doesn’t have a centralized hub that stores and controls data, users interact with each other, coming to a consensus, and transactions are approved. DApps, decentralized applications, are a great example of this. DApps work on the principle of smart contracts, but their applying is wider. One of their main advantages is the high level of user trust. Plus, they are easier to develop as developers don’t have to re-create the app structure, they adapt ready-made properties to project requirements. This makes an app easier, and the development time is reduced several times. According to a report by Daap Review, in Q1 2020, the total transaction volume on 13 blockchains was $7.9 billion, an 82.2% increase over the first quarter of 2019.

Beacons technology

According to Statista, the beacon technology market will reach approximately $56.6 billion by 2026. Another Grand-view study claims that the Bluetooth beacon market will be worth $58.7 billion by 2025. While beacon technology is not new, it is still an effective way of communicating between a brand and customers using mobile apps. With beacons, merchants can optimize the online and offline presence of their companies, better understand user behavior, and deliver the most personalized messages possible. Let’s remember how it works. 

How do beacons work
What are beacons and how do they work

Beacons are of great value for the marketing and promotion of mobile apps. As soon as beacons are connected to users’ devices, they can activate mobile apps and send information tailored to users’ interests and preferences. Beacons are also used to welcome visitors to retail outlets, which increases the level of customer loyalty. Plus, they can locate consumers and guide them to points of sale. This is a great way to increase user engagement. Experts say that beacons are really an effective way to increase sales, so this technology continues to be actively used in the development of mobile applications.

Even more, this year Google and Apple announced the COVID-19 contact tracing system, which uses Bluetooth to help reduce the spread of the virus. Nearby mobile devices with iOS and Android will exchange beacons with each other via Bluetooth, which include IDs, and then check them against information on the server about beacons of devices whose owners have tested positive for COVID-19. If a match is found, a user will receive a notification that he or she has been in contact with a new coronavirus patient, as well as advice on what to do next.

IoT-enabled mobile apps

The emergence of smart technology, including smartphones, smartwatches, smart home devices, has led to the idea to connect devices to create a system of information exchange and more efficient operation. Therefore, the Internet of Things is a popular topic lately. By connecting IoT with smartphones, we get a convenient tool for managing the entire smart network. With a network of interconnected devices, we can control the entire system using a smartphone remotely. Accordingly, the demand for IoT enabled apps will grow with the increasing popularity of smart devices. Statista predicts that the global Internet of Things (IoT) end-user solution market will grow to about 1.6 trillion by 2025.

Mobile app trends to watch in 2021

With a high probability, we can say that the listed trends will be relevant in 2021 and the coming years. But 2020 failed to fully unleash the potential of some other technologies, laying the foundation for their future development. Plus, the giants of the mobile development market also dictate their rules that cannot be ignored. So, here are some extra trends for 2021.

5G Technology

5G has already become a reality, but a wide use of the 5G standard is still coming. The increase in Internet speed and traffic capacity opens up new opportunities for creating software that requires more power than what was previously available. For example, 5G is expected to become a new driving force in the development of IoT, as well as enhance AI/ML capabilities and ensure data security. So, mobile app developers should be prepared for 5G to become the standard that apps must meet.

Instant apps

Instant apps are a great way to showcase an app without having to download and install it. Such applications are launched without taking up a large amount of device memory. They were first developed by Google in 2016 and have received positive feedback from both developers and users. In 2020, Apple also rolled out an instant apps-like feature called App Clips in iOS 14. More and more mobile app developers are adopting the instant app feature because it helps increase conversions by offering a better user experience.

On-demand apps

On-demand apps have become a lifeline for busy people. This is convenient when you don’t need to waste time looking for a particular product or service, and you can simply use your smartphone to quickly order what you need now. On-demand apps connect users and service providers. For example, Uber is one of the most successful cases of such applications. You can find on-demand apps for food delivery, car rentals, personal health services, and so on. Lockdown associated with the Covid-19 pandemic only increased the popularity of such apps, allowing users to order services from the comfort of their homes, and sellers have an additional channel to attract customers. According to Statista.com, U.S. consumers are spending $57.6 billion in the on-demand economy to cater 22.4 million users annually.

Protecting the privacy of user data 

Apple announced that ‘nutrition labels’ will hit the App Store in December 2020. These labels give users an idea of ​​what data an app collects and for what purposes before downloading it. Nutrition labels are part of a series of new privacy features that Apple intends to implement to ensure the safety of its users. Everyone wants to know that his data is securely stored and an app doesn’t collect more information than it needs, especially when it comes to sensitive information in financial and medical applications. Regulation of this issue is in progress, and a step towards user safety taken by such a giant as Apple will definitely accelerate this process. So, data security and privacy protection will certainly become an important topic for mobile app developers in 2021. 

Wrapping up

The mobile app market continues to grow despite everything. This is one of the most promising areas of development that adopts the latest technologies to create new progressive mobile solutions. With the increasing level of digitalization, we are getting more interesting and functional mobile apps that allow us to manage many aspects of our lives using smartphones. In the coming years, mobile development will still be the epicenter of cool tech ideas for both developers and users. If you want to catch this wave and create an app for your business, we will be happy to help you. Visit our mobile development page to find out more about our services.

Also, we recommend reading How to Hire a Great Mobile App Developer by Toptal. Good luck with your project!

IdeaSoft Was Named a Top Global Development Company 2020

Clutch named IdeaSoft one of the top-performing global development companies 2020. Only highly-recommend companies were selected as leaders. This is not the first recognition of IdeaSoft as a quality IT service provider in the global market, but we are happy and grateful for each award. The IdeaSoft team has been providing integrated software solutions for innovative companies for 5 years. Over this time, we have delivered more than 250 successful projects in industries such as Fintech, 5G&MEC, B2B, B2G, Smart City, DLT&Blockchain, Logistics. So, we are thrilled to enter the ranking of the top development companies around the globe. 

Combining proven solutions and innovations

IdeaSoft is a Top Development Company 2020 (badge)

Our business approach is based on multidimensional professionalism. We combine proven solutions and innovations to deliver the best results for our clients. Therefore, we are especially pleased to read their feedback on our work at Clutch. This motivates the entire IdeaSoft team and keeps us moving forward. 


We believe that every business is unique, and there is no universal winning formula for everyone. Working with a wide tech stack, our team of designers, business analysts, engineers, and QA specialists select the best solution for each project, maintaining the same high level of quality. As one of our clients, Co-Founder of Fintech Solutions Company said 


“It’s a pleasure to work with a team that is capable of flexibility without sacrificing quality.”


We appreciate these words. Accumulated expertise allows IdeaSoft to provide full-cycle software development services including:

The caring team of proficient IT specialists

The IdeaSoft team consists of more than 100 experienced IT professionals, who master their skills every day. Our specialists have ISTQB, SAFe, and PMP certifications that prove their excellence. IdeaSoft prefers to develop internal expertise, so we actively share our experience and gain new knowledge. This is what allows the IdeaSoft team to combine the best European engineering practices with fresh tech ideas. Our team doesn’t just do their job, they really care.

IdeaSoft team

Both this award and our rating on Clutch were made possible by all of our clients! We are happy to be a part of cool tech projects that make the world better.
To learn more about us, check out the About us page, and read our reviews. To get started on your next project, get in touch with us directly!

How to Build a P2P Payment App: The Complete Guide (2020)

P2P payment apps are powerful tools for transferring funds between people nowadays. We can pay for purchases and services without leaving our homes just using our smartphones. Merchants can receive payment directly to a card or account by integrating a payment app into their websites. More importantly, you have a choice of which application to use or you can even create a custom peer-to-peer payment app. According to eMarketer, the value of P2P mobile transactions will reach $612.23 billion by 2023, so this market continues to evolve and if your business idea is related to P2P payments, you have a good chance of success. To help you, we have compiled a P2P payment app tutorial in which you will find answers to questions of how to build a powerful and legally compliant peer-to-peer payment app. 

Table of contents:

  1. What is a P2P payment app and how does it work
  2. Advantages of peer-to-peer payment apps
  3. Must-have features for a peer-to-peer payment app
  4. Steps to build a P2P payment app
    4.1 Choose P2P app type
    4.2 Draw up a list of features for your app
    4.3 Choose the right technology
    4.4 Provide sufficient security of your app
    4.5 Regulatory compliance
    4.6 Create an effective design
    4.7 Find a software development team
    4.8 Test your app
  5. Where to start developing a P2P payment app

What is a P2P payment app and how does it work?

First, let’s figure out what are peer-to-peer payments from the technical part. Peer-to-peer transactions are electronic money transfers that are made directly from one account to another using a payment application. Probably everyone has used PayPal at least once, one of the first and the most popular P2P payment apps. So how does it work? 

How PayPal works

You create your account and link it to your credit card or bank account. Further, using an email address, phone number, or account of another person, you can send him or her money. Usually, the legitimacy of a transaction is verified using passwords or additional data about a sender and a recipient. P2P systems allow transferring funds between banking card owners without resorting to intermediaries, which means you save on commissions. These apps are often free, but small fees may apply depending on the source of your funds. To make payments, users need an app available via a smartphone or computer and Internet access. No cash confusion or bank lines. Everything is extremely simple. 

Typically, such apps allow you to transfer money between users of different banks, which makes transactions convenient. Payment processing times can vary from a few minutes to several hours depending on the payment type. P2P systems have a wide range of applications. You can pay for services using such apps, buy things on the Internet, send and receive borrowing requests, make cross-border payments, and more. 

Advantages of peer-to-peer payment apps

P2P payment apps are widely used not only by individuals but also by businesses. For example, it is much easier for merchants to receive payment for goods directly to their cards, so they integrate payment apps into their online stores. Moreover, by creating a payment app on blockchain, you can conduct direct transactions in cryptocurrency. Here are some more benefits of peer-to-peer payment apps.

Advantages for individualsAdvantages for business
+ You don’t need to withdraw cash to pay.
+ You can easily track your finances in your app.
+ Many applications support automatic conversion between different currencies.
+ You can pay from anywhere in the world where there is an Internet connection.
+ You save on fees due to no need for intermediaries.
+ You will ensure affordable cross-border transactions and be able to reach a larger pool of customers.
+ No intermediaries to charge expensive services.
+ You can monetize your app and earn extra money on it.
+ You can receive instant payment for your services directly to your card or account.
+ You will increase the level of trust and user engagement.

Must-have features for a peer-to-peer payment app 

When creating a custom P2P payment app, you have many options regarding functionality and capabilities. It’s up to you. However, there are some must-have features that users expect by default when downloading a payment app. Therefore, when making a list of features for your future product, first of all, include the following there.

Digital wallet. A digital wallet is the main feature of any payment application. With the help of a wallet, a user stores his electronic currency and makes payments. Usually, digital wallets are integrated with payment card tokenization services from VISA and Mastercard and with external systems/services, so they can have wide functionality. Creating a digital wallet is a separate issue that should be given special attention before starting your app development.

Send and request money. The user should be able not only to send the desired amount of money but also to request money from another user.

Send bills/invoices. For the convenience of a user, your app should have a function for generating a transaction invoice/bill that can be received by both a sender and a recipient. 

Currency conversion. Automatic currency conversion is a great feature that makes P2P payment apps so popular, so you shouldn’t give it up. By implementing this function, you will allow your users to make cross-border transactions, pay for services and goods using your application while traveling, and not think about converting. The best way to implement this feature is to synchronize your payment app with the exchange rate with the bank at the time of the transaction.

Unique one-time passwords or IDs. Security is crucial for payment apps. To avoid unwanted or accidental transactions, frauds, a user must confirm the unique ID and OTP (one-time-password). If you want to provide an even higher level of security, you can configure the need to enter an OTP every time a user logs in.

Transfer to a bank account. Users may need to transfer money not only from card to card but also from card to bank account. Give them that opportunity.

History of previous transactions. The transaction history will enable your users to keep track of their spending and money transfers. Try to keep the information as long as possible. Also, the function of generating statements, downloading, and printing transaction history will be a great solution.

Push notifications. Push notifications will be useful for both you and your users. You will be able to send notifications with new offers, promotions, or updates. And users will be able to quickly see messages if a card has been credited, for example. However, keep in mind that push notifications can be useful as well as annoying, so let users choose which notifications they want to receive on their phones.

Additional  features can include:

  • Chatbot. A chatbot in your P2P payment app can improve user experience. While interacting with the app, a user may have questions or problems. A chatbot will help to quickly resolve issues that may arise when transferring funds, incorrect debits from the wallet, and so on.
  • Fingerprint security lock. To minimize the risks associated with the security of your application, you can configure the fingerprint security lock. This way, only the owner of the account can access it.
  • Cryptocurrency payments. The value of cryptocurrencies is growing every day. According to Reportlinker, the cryptocurrency market is predicted to grow with a CAGR of 56.4% from 2019 to 2025. Many companies allow paying for their products and services using cryptocurrency. If you want to create a modern app that provides additional opportunities for users, think about the feature of making payments in cryptocurrency.

Steps to build a P2P payment app

Steps to build P2P payment app

Having dealt with the features of a P2P payment app, let’s move on to the main steps of developing your application. Before you start looking for a development team, you have to work on creating a concept for your project and drawing up clear requirements. So here’s what to look out for.

Choose P2P app type 

There are several types of peer-to-peer payment apps. The most popular are banking and standalone solutions. Depending on the business model you choose, you can stop at one of them, but you should be aware of all types of payment apps. So, we will give a brief description of each one.

  • Bank-based solutions. Bank-based apps involve a bank as one of the parties to transactions. Many banks are developing their own P2P payment systems to make services more accessible and convenient. These apps receive money and make deposits directly to bank accounts rather than a saved foreign currency account. Sellers, in turn, must have POS terminals to accept such payments. Banking apps make transactions easier for both banks and users. 
  • Standalone services. These are independent providers that offer their own payment systems such as Venmo and PayPal. Such applications allow users to create a digital wallet and use it to store electronic money and make payments. Typically, these apps support MasterCard and Visa cards. You should choose this type of application if you are going to build a business around it.
  • Social media platforms. Social media and messengers are also developing built-in payment features as Facebook did. This way social media users can send money to their friends without leaving the app. However, if you are not going to build your own social network, this type of P2P payment app will not be for you.
  • Mobile OS systems. Here, payment options are more of a built-in feature than a full-fledged application. Examples of mobile OS payment systems are Apple Pay, Samsung Pay, Android Pay.

Draw up a list of features for your P2P app

Next, get back to the features. You need to make a list of the necessary features, which a development team can then estimate. Start with the basic ones and then add the additional features that you want to see in your app. In order not to miss anything, you need to study your target audience, create a portrait of your user and the user flow, path that users will go through interacting with your app. 

Don’t try to develop all the features at once, as this may be unreasonable and too expensive. Prioritize features, focusing on core ones, you can add new features later when you are sure that they are needed. 

Choose the right technology

The next step is the technology selection. The right technology will help you make a P2P payment app more functional and more interesting for users. And this is an important factor to survive the competition, right? FinTech gave us such innovations as NFC and biometrics ID, but we shouldn’t be limited to them. The financial sector continues to undergo digital transformation and new technologies are coming to the fore. For example real-time payments (RTP), unified platforms, Artificial intelligence (AI), blockchain. Don’t hesitate to use trending technologies and tools to create your app, because the faster, more convenient, and more profitable your product is, the more chances you have to succeed.

One of the most promising technologies listed is blockchain. According to MarketsandMarkets, the global blockchain market will go up to $23.3 billion by 2023. Blockchain-based solutions are secure and they provide a high level of transparency that users can accurately assess. Thanks to a distributed storage system, information about all transactions are stored in blocks linked to each other. No block can be deleted or changed without destroying the entire system. Also, blockchain was originally created to build peer-to-peer systems without the involvement of intermediaries. Read our recent article Where to start implementing blockchain to find out more about adopting this technology.

Provide sufficient security of your app

We have already mentioned security, but when creating a peer-to-peer payment app it is better to think twice about it. All information about your users’ accounts and the history of their transactions must be reliably protected, as well as the process of transferring funds. The total cost for cybercrime committed globally will reach $6 trillion by 2021, according to the Cybersecurity Ventures Official Annual Cybercrime Report. I don’t think that you want your users to become victims of hacker attacks. How do you ensure the proper level of security for your application?

Ways to secure mobile application
Ways to secure your application

We have already talked about the need for sending unique ID/OTP when confirming operations and logging in. This will help avoid accidental payments or fraudulent actions. Try to use all the security features built into devices, such as fingerprint scanner, face recognition, or at least activate two-factor authentication. You also need to ensure the security of your digital wallet and prevent any chances of a personal data leak. Be sure to discuss with a development team what security features you can put in your payment application.

Regulatory compliance

Regulatory compliance is as important an issue as security. Your payment app must comply with payment standards. Experts say there is a lack of regulation of the FinTech industry, but different regions already have documents that need to be taken into account. Unfortunately, it is very difficult to think about the payment requirements of all regions and create a universal app that will meet all standards. Therefore, you should choose a target region for yourself and create a P2P payment app following its laws and recommendations.

Here are some examples of authorities with which you need to resolve legal issues by region:

RegionAuthority
ChinaFinTech Committee under the People’s Bank of China (PBOC)
KoreaFinTech Center under the Financial Services Commission (FSC)
AustraliaInnovation Hub by the Australian Securities and Investments Commission (ASIC)
European UnionDirective (EU) 2015/2366 + GDPR
UKFinancial Conduct Authority.
USDepends on the state

Create effective design

In the pursuit of functionality and legitimacy, you shouldn’t forget about the design of your app. The correct structure of the user interface and an attractive look determine the convenience and user-friendliness of an app for users. Also, a memorable design will help you build great awareness and engagement. UX/UI design development consists of several stages. Let me remind you that the UI part is responsible for the look and feel of an app (colors, layouts, typography), and the UX is responsible for the process of user interaction with the interface, his overall impression. At IdeaSoft, our design team sticks to the following workflow.

UX/UI application design workflow
UX/UI application design workflow

Find a software development team

With the preparatory stages complete, it’s time to find an experienced development team to help you bring your ideas to life. Take the time to find and select skilled developers. You can use the ratings from Clutch, GoodFirms, TopDevelopers, Techreviewer, and others. Here’s what to look for when choosing a development partner.

  • Appropriate expertise. The experience and technology used by a company must meet your requirements. For example, does a company work with blockchain? Does it have experience in developing projects for FinTech?
  • Successful projects. First of all, you should be interested in FinTech projects as similar to your project as possible, so you can see how the team is coping with the tasks.
  • Customer reviews. You should read customer reviews. This will help you learn about the strengths and weaknesses of a company. Honestly, people don’t really like to spend time writing reviews, so it takes some effort to motivate them to do so. If a company doesn’t have reviews, then most likely it doesn’t care about its reputation, and it’s a bad sign.

2 more quick tips. First, if you want to reduce the cost of software development, turn to outsourcing and choose companies from Eastern Europe (the best match between price and quality). Second, choose companies that provide a full development cycle, so you won’t have to look for other partners for design or support.

Read our recent article How to reduce software development costs

Test your app

At the end of the project, don’t forget to ask about the testing results, but rather test the application yourself. It is better to find bugs early and fix them than release to the market a defective product. Testing helps to determine whether your app is working as it was intended, whether it bears the necessary load, whether it is convenient to use it. Test again and again until you are satisfied with the result. Here’s a quick checklist for testing your application. 

  • Make sure your app installs and runs correctly.
  • Ensure a user can perform typical operations.
  • Check if the app works the same on different devices and OS versions.
  • Check how the app behaves in case of special events (incoming call, low battery, airplane mode, etc.).
  • Test hardware connectivity – Bluetooth, WiFi, NFC, USB.
  • Test the app with real users to ensure there are no bugs and get feedback.
  • Decide who will be responsible for supporting and maintaining the application (dedicated team, outsourcing services).

Remember that a few clicks and swipes are enough for a user to draw a conclusion about your app and decide to use it further or not. According to Compuware, 48% of users are less likely to use an app again if they experience performance issues. Plus, users won’t forgive you for bugs in security, usability, functionality, etc. There are always alternatives. Testing can help you avoid dozens of risks, so never underestimate this step.

Where to start developing a P2P payment app

Now you know how the P2P payment app development process goes. You have to do a lot of analytical work, as well as decide what features your app should have, what technologies are better to use, and what requirements your product should meet. So where do you begin? Start by researching users and defining the functionality of your app. Your main task here is to describe your idea in detail and then discuss it with a development team, which will help improve it and implement it. Choose a skilled development team with a proven track record in developing fintech solutions. The quality of your application depends on the expertise of the software developers, so take your time to choose. 

Experts predict a great future for peer-to-peer payment apps, so catch the wave. Our team is always ready to advise you on the technical implementation of your idea. Feel free to contact us. Good luck with your project!

7 Reasons Why Outsourcing Software Development

According to the Technavio report, the total contract value of the IT outsourcing market is expected to rise to over $409 billion by 2022. But despite the impressive numbers, many still have concerns about outsourcing. In this article, we have collected 7 reasons why you should outsource your software project, what benefits you will get, and what to look for when choosing a development partner. Let’s get started!

Table of contents:

  1. Why do companies outsource
  2. Cost-effectiveness of outsourcing
  3. Moving forward focusing on core business
  4. Access to world-class developers
  5. Rely on proven expertise
  6. Improved flexibility and scalability
  7. Better risk management
  8. Why Ukraine is the best option for software development
  9. Key takeaways

Why companies outsource

The emergence of outsourcing software development companies was driven by market demand. Since 2000, the world has taken the direction of digitalization, and the introduction of technology has become a necessity. In whatever domain a company works, it needs tech solutions to be interesting for its customers, competitive and profitable. Now, during the lockdown due to the pandemic, technology has become even more crucial and has finally convinced business owners that ignoring tech progress only slows down business development. However, not every company can afford to maintain a staff of developers. That’s where outsourcing comes in.

Outsourcing software development allows you to transfer the tasks of creating software solutions to a third-party company that has relevant experience and takes over the entire process. Before considering all the benefits of outsourcing, I can say that it is effective both in terms of costs and in terms of the quality of the result. According to research conducted by Deloitte back in 2016, among the most common reasons why companies outsource software development are the following.

Why companies outsource software development

These reasons have hardly changed over the years. Outsourcing development services continue to close the issue of reducing the cost of developing a software product, allowing you to focus on the main business goals, entrusting the technical tasks to another company without hiring your own specialists. And that’s not all that software development outsourcing companies do for business.

Cost-effectiveness of outsourcing

The main reason why companies outsource software development is the cost-effectiveness of this option. Reducing development costs opens up additional investment opportunities for other areas of business (marketing, human resources, office expansions, etc.). Plus, software development isn’t cheap. According to last year’s GoodFirms study, a majority of tech companies offer software projects of general utility at a price range of $20,000 to $40,000. So, how outsourcing helps to reduce costs? Here are several ways. 

First, salary differences across the globe. It is well known that developer rates in Eastern Europe and Asia are lower than in the US and Western Europe. With the opportunity to work with developers around the world, you can choose the best partner for yourself regarding price and quality, while reducing the budgets for creating software. Let’s estimate, if the development of your application takes 4 months, working with US rates, you will pay a developer at least $50 per hour of his work, and for example, a developer from Ukraine will receive 2 times less. I think you see where the cost efficiency lies.

RegionAverage region rate/hr
North America$50-175
Western Europe$50-200
Eastern Europe$25-50
Asia$18-40
Central America and South America$30-50
Africa$18-40
Average developer rates by region Source: SharpMinds

Second, working with an outsourced development team, you pay only for the services of specialists, avoiding operating expenses for an office, providing workplaces, vacations, sick leaves, and so on. Plus, you save time and money on recruiting new employees. When hiring your own staff, you need to find developers with the necessary expertise, conduct interviews, instead of starting work right now by transferring the project requirements to an outsourcing company. 

Moving forward focusing on core business

You know that the business of a company implementing a software solution or a startup that is working on creating a new product is not limited to the software development process. You also need to work on promotion, sales, business development, partnerships, in other words, do everything to make the company’s main activities profitable. Outsourcing software development frees up time. By entrusting the technical part to another team, you can follow the process, focusing on the main goals of your company. I don’t think you want to go out of business for six months or more while you are busy developing software. By outsourcing a project you don’t burden yourself with additional responsibility, as well as don’t overwhelm your in-house team with tasks that don’t match its expertise.

Access to world-class developers

Another great outsourcing benefit is access to an infinite talent pool. You can choose developers from all over the globe without being limited by geographic boundaries. A large selection of professionals will allow you to build a development team with the experience most relevant to your project at competitive prices. Whichever technology you are looking to work with, outsourcing will give you access to more profitable solutions. For example, blockchain is one of the most trending technologies in recent years. Read about how to get started with blockchain implementation in our article. How much will a blockchain developer cost you? According to real-time calculator Arc, freelance blockchain developer hourly rate in North America is $81-100, while the average rate of blockchain developers from Eastern Europe is $61-80.

The more competitive the market, the more likely it is to find a great deal. Turning to outsourcing, you yourself choose which region to work with. According to SharpMinds, an approximate number of IT professionals in outsourcing locations in 2019 looked like this:

Approximate number of IT specialists by region 2020

There are many different annual rankings designed to determine where the best developers live. You can be guided by them when choosing a software development partner or follow recommendations of your partners. Anyway, using outsourcing services, you expand your capabilities. Also, by working with an outsourcing team, you free yourself from unnecessary legal work. You don’t need to draw up employment contracts, think about taxes, your outsourcing partner will take care of everything.

Rely on proven expertise

Outsourcing software development companies work with different industries and projects, therefore they have a multifaceted experience that may be useful to you. Experts can help you choose the best features for your product, advise a tech stack that suits your requirements, and find insights you might not have guessed. It will take years and investment in training to nurture such expertise within a company. When you turn to outsourcing, you get this and you can be sure that your project is in the hands of experienced professionals.
Some projects require special knowledge and skills that you cannot get in one specialist, but that a trained team can provide. For example, not all IT companies have specialists who work with technologies such as blockchain, AI/ML, cloud computing. If a company doesn’t implement these technologies on an ongoing basis, you can’t expect to be provided with the best solution. The global marketplace gives you the opportunity to find a team with exactly the expertise you need, no matter how many miles between you.

Improved flexibility and scalability

One of the best things about outsourcing software development is flexibility. Once again, you don’t need to hire developers on a full-time basis. You can build a team depending on the workload and current tasks, paying for the time of those specialists that you need at each separate stage of the development process. Also, you can choose a cooperation model that meets your requirements. Outsourcing companies usually offer three options for cooperation, which differ in the degree of flexibility and control:

  • Fixed Price is a model that is based on a predetermined list of requirements, budget, and delivery time for a software product. Working according to this model, you outsource your project, agreeing in advance on all aspects of cooperation, and see the result at the end.
  • Time-and-Materials provides you with more flexible terms. According to this model, you discuss approximate deadlines and maximum budget and pay for development services in a “pay as you go” format. Also, you can make changes to requirements and take part in the control of the development process.
  • Dedicated Teams is a great option if you want to lead the development process yourself or need to expand your internal team with specific specialists. The services of dedicated development teams are used by companies around the world, as it is more cost-effective than maintaining their own staff permanently.
CriterionFixed PriceTime-and-MaterialsDedicated Team
Project SizeSmall to MediumMedium to LargeLarge
Time&Budget FlexibilityFixedFlexibleFlexible
Control Over the ProcessLittleSignificantFull
RequirementsDefinedChangingEvolving
MethodologyWaterfallAgileAgile/Waterfall
When to ChooseYou have clear requirements and determined deadlines. You have a limited or fixed budget. For developing MVPs. For small projects with a limited scope of work.If workflow may change. You don’t know your market well enough. You want to have control over the development process. Your requirements may change.You have a complex and long-term project. You want to have complete control over the development process. You need to expand your team and your business.

As you can see from the table, depending on the type of your project, you can choose a model that will allow you to get the most beneficial outcomes. If you want to expand your project through outsourcing, you can do it in the shortest possible time, saving money on hiring the right specialists. You don’t have to worry about finding a developer with the expertise you want, an outsourcing company takes over this task while you can focus on other business issues. This gives you the flexibility to design your product, keeping your efforts to a minimum and freeing up time for other tasks.

Better risk management

Launching a new product is always risky. Will potential users like your app? Or can this software solution provide your company with the results you expected? Outsourcing helps reduce these risks for several reasons. Firstly, you don’t hire your own employees, which means you don’t bear additional expenses. If the product does fail, you will lose less by using outsourced development services. Secondly, by developing a product on your own, you take full responsibility for yourself and the quality of the product depends only on you, while an outsourcing company takes on the quality risks. By choosing an experienced software development partner who has sufficient experience and examples of successfully implemented projects, you can be sure that your software will work as intended. Also, experts say that the distribution of tasks among different companies reduces the risks associated with the launch of a software product.

Why Ukraine is the best option for software development

Now that you know the main advantages of outsourcing software development, it’s time to talk about one of the most popular outsourcing destinations. Ukraine is in the top ten countries for outsourcing software development according to various ratings. SkillValue recognized Ukrainian engineers as one of the best in the world in terms of price and quality (Ukraine ranks fifth with a score of 93.17%). Talented developers, reasonable prices, convenient time zone, and geographic location make Ukraine an attractive partner for companies around the globe. 

There are more than 20 higher education institutions that teach programming in Ukraine, that annually graduate thousands of beginner IT specialists. Here you can find a developer of any senior level, as well as a master of any technology. According to Entrepreneur, in 2018, there were around 165,000 developers in Ukraine, and their number is expected to increase by up to 125% by 2025. Ukrainian engineers are well versed in most popular technologies, including AI/ML, blockchain, big data, and others. So, you can be sure that you will find here a team that will meet your expectations regarding expertise, price, and desired tech stack. Such world-known startups as Grammarly, Jooble, GitLab, Depositphotos were developed by Ukrainian engineers. 

Srart Your Project With IdeaSoft

Here are more reasons why outsource to Ukraine:

  • There are 1600+ tech companies in Ukraine offering various services related to software development (According to the IT industry in Ukraine. 2019 Market Report)
  • The time difference between Ukraine and the United States is 7 hours and between Ukraine and the UK is 2 hours, which makes the country a convenient location for working with various markets.
  • The culture of Ukrainians is similar to the business culture of the West, so you will not have any misunderstandings or other cultural barriers.
  • Ukraine has a favorable business climate, where the development of the IT industry is supported at the state level. This is one of the reasons why global giants like Microsoft and Oracle open their R&D centers in Ukraine.

Key takeaways

  1. Among the most common reasons why companies outsource software development are reducing development costs, freeing up time for core business goals, and solving capacity issues.
  2. Outsourcing can help reduce development costs in half because there’s no need to maintain your own staff and because of the difference in developer rates in different countries.
  3. Outsourcing allows you to select the best developers from all over the world, with the best expertise and competitive prices.
  4. You get additional flexibility in scaling your project depending on the development stage and you can choose a cooperation model that meets your requirements, such as a fixed price, time-and-materials, dedicated team.
  5. Ukraine is one of the most popular outsourcing destinations thanks to its favorable rates, talented developers, and viable IT market.

How to Reduce Software Development Сosts

The issue of reducing the cost of developing a software product is of interest to everyone who has a software project. We all see that the modern digital world makes the rules and if a company wants to be successful it cannot refuse software solutions. Hence, businesses have to spend huge amounts of money to maintain an innovative environment. In this article, we have collected the most effective ways to cut the cost of software development, which will let you save money while maintaining the quality of your product.

Table of contents:

  1. Outsource your software product development
  2. Choose Agile software development approaches
  3. Develop only essential features
  4. Hire a complete development team
  5. Involve QA specialist in the development process
  6. Work with expert developers
  7. Additional ways to reduce the cost of software development
  8. Don’t prefer price over quality

Outsource your software product development

We should start with this advice, even if it seems obvious. According to Statista, the worldwide outsourcing market reached $92.5 billion in 2019. Outsourcing has long been considered a proven way to lower costs for a company, especially when it comes to software product development. If you are not going to deploy a large long-term project, then there is no point in building a development team within the company. The difficulty lies in the selection of developers, as well as in ensuring workspaces and constant workload. By outsourcing your project, you pay for the work done and focus on business tasks, leaving technical issues to an outside team. 

Another bonus of outsourcing is the possibility to choose a software development partner from companies around the world and win a good price. It’s no secret that developer rates vary widely. This is a feature of the global IT market. So why not take advantage of this? According to Clutch’s research, among the main reasons why small companies outsource their projects, increasing business efficiency is in the first place. It is well known that the services of engineers in the US and Western Europe are more expensive than those of developers in Eastern Europe. By reducing the cost of developing your software product, you can invest this money in business development and get more. According to the SkillValue study which determined the best developers in terms of price and quality, it is most profitable to outsource projects to Slovakia, Poland, Hungary, and Ukraine. Now you know where to search for an outsourcing software development company. 

Where_are_the_best_developers

Choose Agile software development approaches

Agile combines flexible approaches to software development. This means that changes to a project can be made directly during the development process. Communication between a development team and a customer is ongoing, so the client can see at what stage of the development cycle his product is and whether it meets his expectations. According to the Harvard Business Review, 60% of companies experience profit growth after adopting Agile.

Getting back to cost savings, why is flexibility important? If you are developing a product from scratch, it is almost impossible to plan everything in advance. You may miss some features or suddenly realize that you want to change the structure of your app. Waterfall approaches won’t give you this opportunity. Using the fixed price services, which assumes a fixed scope of work, you will see the result at the end of development and who knows if it will be exactly what you wanted. Of course, a development team can refine your product afterward, but you will have to pay extra for this. By using agile development models, you can adjust the work of engineers without accumulating issues.

Develop only essential features

Project requirements often become a stumbling block in software product development. The fact is that the result directly depends on how clear your requirements are. In order to compile a list of necessary product features, you need to carry out a lot of analytical work, including determining business goals, studying the market, identifying and analyzing your target audience, and studying competitors. Next, you need to prioritize features and separate essential features from the so-called “nice-to-have” ones. Always start development with core product features, it is much cheaper and more efficient. According to statistics, usually, users don’t use even half of an application’s functions. If you don’t want to throw money away, don’t try to develop everything at once.

How to prioritize features and find the essential ones:

  1. Create user flow, the path users take when interacting with your product.
  2. Make a list of features that your product should have at each stage of interaction.
  3. Give priority to each feature, where High priority is fundamental functions without which your app or platform can’t work; the medium priority is the functions that you’d like to have, and that make your product special; low priority is features that require additional elaboration or complex implementation.
  4. Visualize functions using a user flow matrix, where you have a horizontal line showing the main stages of your user flow, and below each stage are functions dedicated to that stage. Then, draw a vertical arrow pointing down from high priority to low priority at the bottom.
User_flow

Now you can see which features need to be developed first. The rest of the attributes should be considered and can be added later if you deem necessary. Don’t forget about some viable features that are specific to your market. For example, if you are developing a financial platform, there may be additional legal requirements for the product. Or if you are developing a mobile application that you are going to promote using app stores, remember that it must meet the requirements of a particular store.

Hire a complete development team

Many people believe that in order to reduce the cost of software development, it is enough to reduce the number of participants in the process. Why doesn’t it work? First, the development process involves different specialists who work in different subject areas. Of course, you can hire a couple of developers and shift all the tasks of writing requirements, coding, and testing to them, but let’s be honest, what result can you expect in such a situation? 

Second, things can get even worse if your project is big enough and you are trying to implement it with not enough people. Before abandoning an extra specialist, weigh all the risks, evaluate the scope of work. Having saved on hiring an extra specialist, you can lose the quality of the product and, as a result, you will have to redo everything. It doesn’t seem like savings. Extra specialists should not be underestimated, especially when it comes to QA engineers and testers.

Involve QA specialist in the development process

Another important point is that testing is crucial at all stages of product development. By postponing tests until the very last stage, you can accumulate a large number of bugs, which will be much more laborious to fix. Even if you work with some of the most talented developers in the world, you still need testers to make sure that your product is functioning correctly, not only from the code side but also from the user side. Here is a brief description of what a tester does at each stage of software product development:

  • The stage of collecting requirements – studying a product, identifying poorly defined elements, helping to compose user stories.
  • Design stage – identifying any logical conflicts in design.
  • Development phase – identifying any deviations from the user’s path, instant testing of new features.
  • Testing stage – testing a product as a single system, cross-browser/cross-operating system testing.
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It is well known that it is impossible to create software without bugs, the key is to fix them as quickly as possible. So, if you really want to reduce development costs take the role of testing seriously. And here’s an extra tip. If you need to hire a tester, you can still reduce the number of hours spent testing with automated tools. Ask your development team to use automated testing where it is possible to minimize the chance of human error and speed up the entire process.

Work with expert developers

Once again, one of the most effective ways to reduce software development costs is to make the fewest mistakes and create the highest quality product the first time around. If you get a poor implementation of your idea, then you will spend more money and a lot of time on revision. An even worse scenario is if you release a product that doesn’t meet users’ expectations and they reject it. This makes it very difficult for you to re-earn the trust of your target audience. Hence it is very important to work with an expert development team that has a proven experience and a portfolio of successful projects.

If you want to get an excellent result, the main factors in choosing a software development partner for you should be the ratio of the company’s expertise and developer rates. By focusing only on price, you can lose the quality of your software product. So, having chosen a region that suits you in terms of the price range (find average hourly rates of developers by region in the table below), start evaluating companies’ expertise. Look for companies with projects similar to yours, study customer reviews, technologies that companies work with, and make sure that a company has in-house developers, the experience of which the provider can guarantee. 

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Average developer rates by region Source: SharpMinds

Additional ways to reduce the cost of software development

In addition to the above methods, you can find other ways to reduce development costs, based on the characteristics of your project. An experienced technical specialist can help you with this. Here are some other ways that can suit your project. 

  • Use open-source software.  This option is not suitable for everyone, some projects require technologies with paid tools or certificates. But if the issue of price is dramatically important to you, you can opt for open source solutions, which are often free and effective. 
  • Involve DevOps. If you are going to create a product in one go or have multiple products, it is critical to get it right. I this case you need to implement DevOps methods. The integrated work of specialists from different departments will allow you to build a more efficient and high-quality development process. By automating some operations, you can create a unified development environment, speeding up each step of the process.
  • Develop an MVP. MVP is a product with basic functions, ready to market. Then you win the first users and collect feedback to find out which additional features should be developed and which should not. MVP lets you reduce the time-to-market, cut the cost of development, and choose the further direction of development based on the real needs of your customers. Companies such as Uber, Snapchat, Foursquare, and Spotify have started with MVPs.

Don’t prefer price over quality

As a final point, we can say that there are different ways to reduce software development costs. The key is not to lose quality in the race of a lower price. You should understand that there is always a certain minimum of how much a quality product can cost. If some company offers you a price below this minimum, then you need to be prepared for the fact that the result will be far from ideal. An experienced development team will always find ways to cut costs while maintaining the quality of development, and such a team knows where the limit of these reductions is. Feel free to contact us for a project estimation or technical consultation. IdeaSoft experts are always happy to be a part of new interesting projects.