Financial Software Development: What Are The Main Challenges And What Skills Are Needed To Solve Them? – Technology Org

Financial software development - illustrative photo.

Financial software development – illustrative photo. Image credit: Carlos Muza via Unsplash, free license

In modern business, using financial software is a sort of inevitable thing. The complexity and variety of commercial operations are vast. Therefore, purchasing or even developing proprietary tools can help individual and corporate users to manage their activities with the utmost efficiency. There are, however, some specific challenges involved. Let’s look into this aspect deeper.

Why do companies need specialized financial software?

If you are a novice entrepreneur, tracking your accounting or managing client relations by hand may seem a perfectly good way to make your job done. But with time, your company will grow, and so the amount of data you need to deal with daily.

Transitioning from manual financial processing to the software-based model may initially seem daunting. There is a chance you would need to modify the old data formats you are familiar with. You would probably need to track new parameters that you didn’t think you would ever need.

You may even need to adapt your business processes: to conduct personnel training and perform more analytical work. But the fact is, doing all these tasks using a specialized financial software will eventually save considerable amounts of time and other resources for you.

Still not convinced? Well, the term ‘Financial Software’ goes far beyond regular tasks such as tracking income and expenses, creating budgets, or printing occasional reports. For example, you may need to manage your investments, plan for the necessary material costs, or forecast future financial outcomes based on the current level of your company activities.

And one of the best things is that the biggest benefits of using financial software can be felt the more your company grows.

Developing software - illustrative photo.

Developing software – illustrative photo. Image credit: This is Engineering RAEng via Unsplash, free license

Challenges in financial software development: What are they?

Financial software is always based upon a set of very precise and specific conditions. Laws, regulations, and taxes are the same for everyone – but still, for every type of business creating software applications that manage financial data and processes can be somewhat different.

Therefore, developers of such applications need to consider what particular challenges are faced by their clients, and assess them when creating financial software.

What these challenges are? Here are the main of them:

  1. Security: Any financial software needs to be highly secure to protect sensitive financial data from cyber-attacks and unauthorized access.

  2. Compliance: Products of this type must comply with regulatory requirements and industry standards such as PCI DSS, GDPR, and SOX.

  3. Accuracy and data management: Financial data needs to be stored in an accurate form and reliably, to avoid errors in calculations or financial reporting. Data must be managed efficiently, ensuring integrity and availability.

  4. Integration: Applications dealing with financial data often need capabilities of integration with other systems, such as accounting software, trading platforms, and payment gateways.

  5. Scalability: Businesses have a tendency to grow. Therefore, like every digital financial tool, software needs to be scalable to handle large amounts of data and users as the business grows.

  6. Performance: Financial systems need to perform well, especially when dealing with large datasets and complex calculations.

  7. Usability: It needs to be easy to use. Otherwise, the software can be too difficult to master, or even lead to human errors. The interface has to be user-friendly, especially for non-technical users such as traders or financial analysts.

  8. Change management: Business environment is not static but changes over time. New regulations and other market-related conditions emerge while some older limitations become obsolete. Software needs to be easily modified to adapt to these changing business requirements.

Financial software development poses a set of specific requirements for the company that is responsible for the creation of this type of product.

Financial software development poses a set of specific requirements for the company that is responsible for the creation of this type of product. Image credit: This is Engineering RAEng via Unsplash, free license

What set of skills is necessary for financial software development?

Financial software development requires a unique set of skills that go beyond typical software creation. Of course, it is obvious that programmers need to have suitable coding skills, but this is not the only prerequisite that leads to a good final product. The team of specialists involved in the creation of financial applications needs to be highly skilled in the following areas:

  1. Strong programming skills: This includes proficiency in languages ​​such as Java, Python, C++, and SQL. The programmer can choose his favorite language – as long as the final software version functions properly and meets all the requirements from the client’s side.

  2. Understanding of finance and accounting principles: Developers need to have a good understanding of financial concepts such as asset classes, financial instruments, trading, and risk management. You may hire a financial consultant for this purpose, but at least a basic understanding from the coder’s side is a huge advantage.

  3. Knowledge of financial regulations: Developers need to be familiar with regulations such as GDPR, SOX, PCI DSS, and other relevant industry standards. Clients may not always be aware of how many regulations are there that need to be implemented in their software. It is the developer’s responsibility to prepare the final product for real-world use.

  4. Attention to detail: Financial programs require a high level of attention to detail, as errors can have significant consequences – both financial and legal.

  5. Analytical skills: Analyzing large data sets and financial data may help identify patterns and insights. These insights, in turn, can be used to create novel functions and tools that are useful to the client and that differentiate financial software from existing alternatives.

  6. Strong problem-solving skills: The team working on the creation of financial software must be able to identify and solve complex problems. Clients often bring unique challenges to the table, and that is why the same development model may not be suitable to complete every individual order.

  7. Communication skills: Financial software creation involves a lot of communication with stakeholders such as traders, risk managers, and compliance officers. This task must be done efficiently.

  8. Security expertise: Developers need to have a good understanding of security best practices and be able to implement them in financial software to protect sensitive financial data.

Final thoughts

Financial software development is a unique area with specific requirements, making it very different from the development of other types of software. Knowing programming languages ​​and having coding experience is not sufficient: developers must also be familiar with financial regulations, laws, best practices, and even specifics of individual business areas.

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