Fintech (financial technology) is one of the hottest topics in today’s startup scene. Plenty of initiatives are popping up to create new solutions for online banking, investing, payment automation, management, and financial consultancy. Their objective is to automate and streamline the money-handling process. Ruby on Rails is being used extensively in Fintech solutions development. And, rightfully so, it is showing some amazing results as well.
Fintech companies vary from traditional start-ups as they place a strong emphasis on money and associated transactions. Money is a public-sector asset that is generated and regulated by the government.
As a result, every project using the asset needs a more complex pipeline strategy. Furthermore, your concept is likely to change existing financial service structures, which might add to the complexity.
This presents challenges for both business owners and the RoR developer teams. Therefore, when working on fintech initiatives, it’s critical to pick the proper technological stack.
Ruby on Rails is one of the most prominent technologies for fintech products. So, in this article, we will look at some of the potential challenges faced by the fintech industry. We will also discuss why Ruby development is the most suitable to create digital finance products.
Challenges Faced by Fintech Industry
1. Security Issues
If you’re dealing with your client’s money, you should make security and fraud prevention your first concern. Therefore, there are some new trends that hackers are exploiting to steal data and money that you must be aware of.
- Deep Fakes
Deep fakes, which means media that has been artificially warped to the point that it seems authentic, are on the rise. AI technologies have also improved to such a level where they can deceive trained data security experts.
Hackers employ deep fakes in a variety of ways, one of which is to mimic individuals in positions of power. For example, they may act as if they were an executive of a company instructing their financial staff to pay a vendor.
Employees usually don’t go too far into the request for fear of offending their employer. In turn, the hackers take off with the money that the employees think is going to their vendor.
- AI Fuzzing
Fintech businesses have embraced a method known as “AI fuzzing” to identify software vulnerabilities such as unsafe APIs. Every Ruby on Rails development company uses machine learning techniques like this to detect possible security flaws in an app’s coding before hackers do.
Unfortunately, digital thieves use this method as well. As a result, fintech companies are in a race to discover and patch security holes before hackers can exploit them.
Effective security enforcement necessitates significant design efforts not just in client and server-side code, but also in policies such as password creation and restoration. Most server-side web frameworks, including Ruby on Rails development, have powerful and detailed procedures in place to protect against a wide range of typical threats. You can also use vulnerability scanning tools to find and fix flaws in your product’s structure.
The data collected through platforms like social media and mobile networks is sophisticated. Tech behemoths like Facebook and Google have a huge amount of data on every single person who uses their services. These companies utilize this data to alter the advertisements we see, influence what we buy, personalize our browsing experience, and much more.
Consumer data, including how they behave and what they desire, is readily available and of excellent quality. Quality investment data, on the other hand, is not progressing and is a significant pain point for established financial organizations.
Each financial institution, brokerage, or advisory company views its data in a unique way. So, standardizing data throughout the sector is not an easy task.
Consumer data is critical for building new front-end technologies, attracting new customers, and delivering the best possible experience for customers. But improvements in front-end fintech are worthless without the proper data on investments and financial markets.
The expansion of the fintech sector faces a critical challenge: producing high-quality Big Data.
Another issue connected with potential financial business is analytics. However, it is not unique, as many businesses today use an analytics-driven decision-making model. As a result, selecting the appropriate technology for the project is critical.
However, you must avoid the common blunder of selecting a programming language based on a passing fad or popularity. It is preferable to consider all of the advantages and disadvantages of the technology you want to use, including Ruby development.
Performance optimization is crucial, particularly when processing large amounts of critical data. Interpreted languages are not as effective as compiled languages in this situation.
Since dynamically typed languages are less fail-proof than statically typed languages, the issue of type-checking needs to be addressed. Unfortunately, using a statically-typed language improves speed but reduces pipeline productivity, which might be improved by using a dynamically typed solution.
3. High Traffic
More and more people are using digital products to make transactions. As a result, there will be more data to handle, more chances of financial attacks, and more storage places to secure. Antivirus software, gadget upgrades, and situational awareness are all necessary, but not sufficient. Fintech firms must take the lead in safeguarding client data.
If you want to develop a product that can manage a lot of requests at the same time, you should avoid careless programming, and hire an experienced RoR development company to do that for you.
There are programming languages that are ideal for high-traffic capacity projects. They are the most suitable alternatives due to their excellent concurrency and parallelism capabilities. Choosing a tech stack for a high-performance online project, on the other hand, is not a determining factor. When the database becomes a bottleneck in a web project, your emphasis shifts to database optimization.
How Ruby on Rails Development Can Overcome These Challenges
Ruby on Rails is an open-source software development framework that is very secure, and this is often the case. Rails (especially the most recent version) comes with a variety of built-in capabilities for dealing with the great majority of threats.
The framework includes several default security mechanisms. Using Ruby on Rails development also necessitates adhering to the Secure Development Lifecycle, a lengthy security assurance procedure.
Also, the majority of apps utilize a password-based authentication method, which requires users to enter their user ids and passwords into an HTML form. However, if your app employs a poor authentication system, this might cause issues.
An attacker might, for example, steal passwords, hijack accounts, take control of cookies, or even breach your database, which contains all of your sensitive information.
To counter this, Ruby on Rails provides a lot of helpful gems to RoR developer teams that provide the essential authentication functionalities.
RoR is popular among engineers due to its high productivity. You may also come across certain claims about the reduced time in app development with Rails as compared with other solutions. Although the certainty of this statistic cannot be verified, the development process is surely smooth and quick in practice.
Ruby on Rails offers a lot of modules, generating scripts, and open-source tools (gems) that may help you develop a complicated app quickly. Other development-accelerating elements include a high prototyping pace and a well-developed unit testing methodology.
An application as complex and critical as a financial one would require a balanced amalgamation of different programming languages and frameworks for it to perform optimally.
The performance of RoR development is comparable to that of other programming languages such as Python and PHP. In terms of raw performance, this implies that compiled languages such as Java or C# will outperform scripting languages.
However, in reality, only a tiny portion of an application might have high-load needs. As a result, a hybrid approach to development can be used. High-loaded portions can be implemented in compiled languages, while the remainder of the app will benefit from Ruby’s fast development pace.
There isn’t a single financial application that doesn’t make use of a database because a large amount of data transacted on a daily basis. A major chunk of the basic application functionality is implemented using pure SQL. The MVC design of RoR makes working with databases a lot easier.
In many situations, the ORM layer of the framework allows RoR developer teams to avoid manually creating complicated SQL queries. Rails also provide a flexible mechanism to perform database updates in an organized fashion.
Ruby on Rails is a well-established and mature framework. It is a go-to option for most financial companies because of its fundamental features, which include excellent code quality, built-in security capabilities, and much more. The framework is in high demand, and it is still the most popular web framework among programmers.
That is why our RoR development company strongly recommends the Ruby on Rails framework to develop fintech products. If you have an idea and want to develop a digital product, don’t hesitate to contact us. Our developers have enough experience in providing Ruby on Rails development services that your product will be created with the greatest of ease.