According to a recent report by the Australian Banking Association (ABA), the financial services sector is experiencing a significant shift in consumer behavior, with nearly 98.9% of financial transactions and interactions now taking place digitally. Additionally, the Australian fintech market is projected to reach a staggering USD 33.99B by 2033, highlighting the industry's relentless drive toward innovation.
To remain competitive and relevant in this rapidly evolving landscape, BFSI businesses have embraced Minimum Viable Products (MVPs), which not only enable them to keep pace with ever-changing customer demands but also minimize development costs and time-to-market. In this article, we will delve into the advantages and key steps to building an effective MVP in banking and finance.
The above statistics explicitly highlight the advantages of beginning the new product development journey with an MVP in Banking and Finance Industry. Nevertheless, there exist additional compelling motives for Banks and Financial Servies organisation to engage in MVP product development:
Whether you're aspiring to disrupt traditional banking, streamline investment processes, or introduce innovative payment solutions, understanding the key stages of fintech MVP development is essential. Here are the pivotal steps that you should consider to develop an effective MVP!
Sometimes, ideas may not align with market demands. From the survey of CBInsights, the second reason for a startup’s failure was a ‘lack of market need’ (35%).
Therefore, prior to initiating an idea and commencing the MVP development process, it's essential for banks and financial institutions to adopt the customer-centric approach.
Begin by narrowing down the MVP's focus to a specific area within the broader BFSI industry. Identify whether you aim to tackle payment solutions, lending platforms, personal finance management, etc. This focused strategy allows businesses to customise the MVP to effectively resolve specific challenges within that domain.
After identifying the focus area, determine the product’s unique value proposition. This could be offering faster payment processing, providing more accessible lending options, or any other innovative aspect that differentiates your product in the market. This step will establish a clear direction for the fintech MVP, helping banks differentiate themselves and attracting more target customers by addressing their specific pain points.
An effective way to ensure a good user experience with the product's first iteration is by mapping out their journeys. In this stage, business analysts often work with designers on the user flow to guarantee no fundamental thing will be missed.
Thus, banks need to look at the app from the users’ perspective but not the developers’. This includes identifying the sequence of actions, decisions, and interactions a user will go through from the moment they access the MVP to completing a task. Here is an example of the user journey for transferring money within a mobile banking app.
In the dynamic BFSI landscape, identifying the key MVP's features demands a profound understanding of not only the financial intricacies but also the evolving needs and expectations of customers. To prioritize the MVP features, leverage the results from the market research phase and ask questions such as:
For instance, if your MVP focuses on personal finance management, essential features could include:
Among these features, you should categorise them based on high priority and low priority and arrange them in the product backlog (priority-wise). Here is an example of how you can categorize the features of MVP based on their significance:
Before moving to the development phase, banks and financial institutions need to consider the following criteria first:
By adopting Agile methodologies, you can divide the development process into a smaller, more manageable process called “sprint”. This strategy allows you to concentrate on essential features and provide incremental value to users within shorter development cycles.
Keep in mind that the MVP isn't a lower-quality version of the final product; it still needs to meet security standards and fulfill the customer's needs. When moving to the next process, functional, performance, and security testing are vital to validate the reliability and effectiveness of your MVP.
After launching the MVP, the BFSI company must get feedback from its clients on the release. The data collected will help generate new ideas, decide the strategies, and scale the product effectively to handle user growth.
The best practice here is leveraging cloud services and scalable infrastructure solutions. Cloud platforms offer the flexibility and scalability required to accommodate rising user demands.
Learn more: Best Practices to Solve Common Challenges in Banking MVP Development
Due to the substantial rise in demand for digital and contactless payment solutions among Vietnamese users, Asia Commercial Bank (ACB) opted for a mobile-first approach. The bank engaged with KMS Solutions, a trusted technology service provider with domain knowledge and expertise in the BFSI sector.
Within only 4 months of collaboration, ACB could successfully release the MVP of the ACB Business App that incorporates different innovative banking features. Additionally, to help the bank ensure data security, KMS Solutions implemented top-tier security measures. This MVP version provided ACB's business clients with a convenient and user-friendly digital platform to access a range of banking services.
Get to know more about MVP development with us!