What Software Development in the Financial Sector is Like

In a changing consumption paradigm, the financial sector’s digital transformation encompasses a wide range of products, services, and processes: from end-consumer communications to data storage and processing, from decision-making procedures to supply and service channels. The largest financial institutions are actively mastering advanced technologies. New business models are proliferating, and opportunities for their technical implementation are opening up, leading to significant market supply and demand changes.

Trends of software development in the financial sector

The financial sector is one of the leaders in developing and implementing new technologies now and in the future—for example, platformization. It is the translation of financial technology into comprehensive online and ecosystem solutions to make it easier, faster, and cheaper for consumers to access goods and services. New electronic payment systems use cryptocurrencies and digital currencies from central banks. Funding is provided through crowdfunding platforms.

Technologies for monetizing personal data and user profiles have occupied a separate niche. Targeted offerings, including pricing and the formation of customized product and service packages, are expanding. Service models of resource provision, such as Bank-as-a-Service (BaaS), have become widespread. Open banking on Open API platforms is evolving.

The pandemic has shifted the demand for financial software development: the need for remote means of payment has increased. This stimulates research activity in e-commerce and digital currencies and the development of technologies to ensure their stability, speed, and security. Over 2018-2020 the number of sources covering research on blockchain, e-commerce, and cybersecurity technologies was stagnating globally. But now this situation has changed.

Many technologies show a co-directional increase in importance in global ratings. First of all, national digital currencies: the direction of new payment instruments on which the efforts of state institutions and central banks are focused. Also, the importance of financial instruments for sustainable development is steadily growing.

The simultaneous development of payment instruments, financing instruments, platforms, and cloud solutions shows the penetration of financial technologies in related sectors and the appearance of qualitatively new business models. The digital banking development services are becoming central to the provision of digital financial services, which form the basis for the application solutions demanded by the market.

Innovation in financial software development

Financial innovations occur under the influence of external environmental factors. for example, real estate tokenization. They can be divided into new technologies in times of crisis or the creation of a fundamentally new financial product to increase the company’s market share.

Innovations in the financial sector have their characteristics:

  • The consumer must buy them
  • The financial instrument must be marketable
  • The novelty of the product must be time-dependent

An innovative financial product is a realized object of intellectual, scientific, and technical research. It can be a mass or a separate asset. A single financial product is, for example, a valuable bank coin, a specific security, or a certain asset.

A new innovative financial software can be limited or unlimited. Setting a limit on the issuance is related to a company’s capabilities, legal obligations, and the size of its equity capital. Unrestricted software is usually not expensive and is intended for a wide range of consumers.

Blockchain in financial software development

Financial institutions realize that they have to change, and changes can affect product offerings and lead to a significant change in the roles of the institutions themselves. Unfortunately, it is impossible to look behind the screen of financial institutions’ research and development departments, as this is a trade secret. But by various proxies, it is possible to conclude how such companies see themselves in 5-10 years.

And in the context of studying the digital transformation of the largest financial institutions, a systematic approach is needed. International law firm Slifford Chance studied 367 patents, 88 investments, and 515 blockchain-related projects at 234 major financial institutions worldwide. They formulated many predictions and highlighted key examples of breakthrough blockchain projects among the largest financial institutions. They showed how the real blockchain revolution is actually happening in financial software development.

As a technology phenomenon in recent years, blockchain has resonated with many organizations. In a couple of years, the financial sector has moved from the stage of skepticism to the search for benefits and opportunities for practical implementation in business and everyday life.

The potential benefits of blockchain are not limited to the economic side but also extend to social, political, legal, and even healthcare issues. For all its transformational potential, however, blockchain is only one of the “disruptive” technologies. And it is almost impossible to imagine how the combination of innovations will reshape the financial software on the horizon of 5-10 years. That is why financial institutions that refuse to participate in the digital arms race are likely to fall by the wayside.


In general, market and scientific trends show similar dynamics. The growing share of e-commerce in trade turnover has required accelerated implementation of technological solutions. Against the background of the steadily high importance of more mature technologies (e-commerce, cybersecurity), interest in relatively new areas, such as central banks’ digital currencies and financial instruments for sustainable development, is actively growing.