When software engineers and software development companies get the chance to work with or for financial institutions, they must fully understand what they are getting themselves into. After all, they have a job in software development, not finance. While their job responsibilities do encompass the analyzing, predicting, and development of software solutions, there is a lot of extra pressure associated with software in this sector due to the sensitivity of the data at hand. Further reading: How to social network with an eye on security. Further reading: Steps to follow while Outsourcing Software development – a guide for founders.
Business dynamics and security at financial institutions, such as banks, commercial banks, asset management firms, and accounting firms, must be very secure due to the nature of their industry. A simple mistake caused by someone working for or working with these businesses could cost the company millions of dollars, their reputation, and would have a massive impact on future revenue due to a loss of trust.
To truly understand the responsibilities associated with software in the world of finance, it is best to learn how these companies operate, how they manage their many challenges, and how software engineers can help within the industry.
Financial Software Development Requirements
Software solutions are becoming even more useful in the financial sector as customers are turning more and more to online platforms and mobile applications to facilitate financial transactions. These institutions are under an immense amount of pressure to comply with continually evolving regulatory requirements, must go through intense testing to prevent future issues, and many other stringent requirements, including:
- Information Security – A top priority for all software development projects, information security is especially important in the world of finance as cases of data breaches and credit card theft are terrifyingly prevalent. Software developers must prepare to make security the top priority and ensure that their architecture designs can combat the inevitable threats.
- Scalable, Responsive Systems – Software developers working within the financial industry must have the ability to ensure that all systems are responsive under a high load and scalable to help attract more users and help companies grow within their sector.
- Many Technologies – In addition to strict security guidelines, software devs also have to make sure that they are comfortable working with many different types of technologies at the same time.
The Challenges of Developing Software for the Financial Industry
The challenges that software development companies face when creating products for the world of finance are similar to those of other sectors with a few strict additions. They include agile testing, legacy system management, dealing with defects, and many others.
- Third-Party Integration Issues – Software developers do not really build products that stand on their own anymore as third-party integration has become a major concern. Some developers find themselves struggling to keep up with this requirement as their knowledgebase must expand to know if other pieces of software will work with the one they are developing.
Without this knowledge, integration at a later date could be a disaster. An example of this would be the development of a financial management system (or FMS) requiring the use of a third-party payment application. The developer responsible for the FMS must understand these third-party apps and how to successfully integrate them.
- Revenue Recognition Requirements – The software development and testing process requires developers and the companies for whom they are working to meet certain revenue recognition requirements. This can prove to be a challenge for financial companies due to their budget deficits and limited project timelines.
In order to accurately meet these requirements, those in charge of a software development project should involve an accounting expert throughout the entire process to ensure that they don’t fail to meet any requirements. Failure could mean heavy fines from the government.
- Quality Assurance – All software must go through a quality assurance assessment before releasing anything to end-users, but a financial software product must go through several additional functional development and testing stages. Agile testing has become a common practice in the financial world to allow developers to continuously make changes to existing code by rewriting or adding to it.
- Infrastructure and Legacy Systems – Many financial institutions may be reluctant to replace their existing systems and start using new ones. This delay and use of older machines may prove to cause problems for hired software developers as their products may fail to run on them. They may test their developed software and it will pass through a quality assurance process, only to fail on older models with low performing servers and memory hardware issues. That’s why ñegacy systems and their impact have to be taken into account by software developers.
The Future of Software Development in Finance
The financial industry presents many unique challenges for software engineers and software development companies, such as BairesDev. These two industries are only going to incorporate further in the future. Software development companies must keep these challenges in mind when beginning any kind of financial project to ensure success for all parties involved.