Aug 1, 2023
If you are on your way to building an innovative application in the Fintech domain, you must ensure that you have robust, safe, and scalable backend technology first. Ruby on Rails has constantly proven itself to be the most suitable choice for FinTech because of its noteworthy attributes and benefits.
In this article, we are going to discuss the severe challenges encountered by the FinTech industry and elaborate on how Ruby on Rails is the most important key to the success of all entrepreneurs. Also, we will know about FinTech startups that have gained success and recognition by using RoR in their backend.
FinTech Industry: Insights
The FinTech industry, after acquiring modern technologies like AI, blockchain, cloud computing, etc., has gone through a period of noticeable growth in the past few years. Also, with the constantly changing customer preferences, conventional financial institutions find themselves competing with new, talented FinTech startups. The technological arena is constantly evolving, too, making the FinTech industry adopt soaring trends like online payments and lending, digital currency, InsurTech, etc.
According to Capgemini, the transaction value of the online payment sector will go as high as $6.7 trillion by 2023, expanding at a CAGR of 12.7% between 2019-2023. According to ResearchAndMarkets, the global online banking market will possibly grow to $1.82 trillion by 2023, while it was merely $715.3 billion in 2020. The expansion rate is a CAGR of 16.4% during the forecast time.
There is massive scope for startup enterprises in the FiTech industry, owing to its rapidly evolving market and disorderly potential. The only serious factor to be considered here is the tech stack to be chosen for FinTech application development. In this article, we are going to find out that Ruby on Rails helps startup companies operate with reliability and efficiency. We will also observe the possible challenges and issues a FinTech business holder might come across.
Why is Ruby on Rails the perfect choice for FinTech?
For developers about to start working on Fintech, or thinking about making Ruby Blockchain or Cryptocurrency Rails, or connecting to Ethereum networks using RoR gems, here is everything you must consider important. The development pattern of RoR, apart from its features and framework attributes is what makes it the best option for Fintech startups.
- Ruby on Rails has a rapid pace of development.
RoR is especially popular for its potential to quickly prototype and create web applications with its exquisite attributes and performance. Some of these are convention over configuration, modular pattern, test-driven expansion, third-party libraries, and plugins. Such powerful and speedy development is an important factor for Fintech startups that have the pressure to create new products for the market and become a part of the already competitive sector.
- Ruby on Rails has a robust ecosystem.
With a massive and strong community of web developers, Ruby on Rails has access to innumerable resources that will help FinTech startups to establish their authority. This includes built-in libraries and plugins for conventional FinTech functionality and forums. Also, support communities are available for troubleshooting and handling issues.
- Ruby on Rails has an agile methodology.
RoR is adaptable to an Agile Development Methodology. It is a famous software development point of view in FinTech startups. This approach focuses on flexibility and scalability, the two important factors for constantly growing Fintech products. Renowned agile software development companies use Ruby on Rails to guide the app development process for FinTech web developers.
- Ruby on Rails is cost-effective.
RoR is open-source, hence available for free. So, if your FinTech startup has a low budget, it is the perfect choice for you. So, we have a clear idea of the various benefits of using Ruby on Rails for web application development, especially in the Fintech market.
FinTech Industry: Challenges Developers Might Face
As a FinTech business holder, there are some issues that are quite crucial to FinTech app users and which you must consider very seriously. Let us discuss the primary concerns in detail.
- Security
For FinTech startup enterprises, security is a major concern. Fintech apps have to deal with delicate financial data making them easy targets for cybercriminals. These companies must ensure that they build highly secure web applications and follow everything that enhances cybersecurity. This involves incorporating strong verification and encryption methods, keeping track of possible security threats, and preparing for any critical security issue that might occur unexpectedly. If an enterprise fails to secure its FinTech application aptly, this might affect its reputation and finances. So, to protect your integrity and reliability among clients and avoid huge losses, this has to be taken quite seriously.
- High traffic
Many FinTech app companies face this issue very commonly. Business enterprises have to guarantee that the application they create can deal with huge traffic without crashing or slowing down. FinTech applications must have greater accessibility and efficiency because clients must be able to access their data and manage transactions in real-time.
- Analytics
Since data is at the heart of the FinTech industry, startup enterprises must have strong analytical efficiency. When you analyze data, it provides you with important insights into customer preferences and habits, transaction models, and market trends that will help them improve their business strategy and enhance overall growth.
Analytics becomes an important factor for Fintech startups when it comes to risk control. While working with sensitive data, these applications must be able to locate and intercept defrauding transactions. With strong analytical efficiency, FinTech startup enterprises can easily evaluate credit risk and make crucial data-oriented decisions about lending.
How does Ruby on Rails help FinTech deal with these challenges?
Ruby on Rails has everything one needs to create a trustworthy, robust, and productive Finance application. It deals with all primary issues faced by FinTech startups. Here are a few reasons why Ruby on Rails is the perfect match for FinTech.
- Ruby on Rails for FinTech deals with security concerns.
Ruby on Rails is specially customized to handle security concerns and is equipped with many inbuilt features that make the process of creating safe web applications easier for developers. Features like cross-site scripting(XSS) security, SQL injection security, and security against CSRF concerns. RoR protects your application from cyber attackers trying to exploit general weaknesses.
Ruby on Rails for FinTech tames traffic upsurge issues with its scalability.
The RoR framework helps FinTech startups deal with traffic upsurge concerns by providing scalability in the following ways:
FinTech startups can use RoR for horizontal scaling by adding more servers to handle the rising traffic. It is designed to function with cloud-based infrastructure that helps these startups add further instances speedily and efficiently if handling traffic demands so.
RoR has inbuilt caching systems that help FinTech startups work on the improvement of their application’s efficiency by minimizing the request that must be made to the database. Frequent caching of accessed data by RoR lightens the database load and boots the app’s performance during heavy traffic upsurge.
RoR supports nonsynchronous processing, which boosts application efficiency and deals with high traffic by allowing the processing of requests in the background. This frees up resources and minimizes the load on the server during heavy traffic upsurges.
RoR also functions efficiently with load-balancing solutions that allow Fintech startups to disperse traffic across many servers/instances. This load balancing improves application efficiency and ensures that even during heavy traffic upsurges, the application is effectively accessible.
Therefore, the scalability features of RoR, as discussed above, are extremely useful to FinTech startups, especially when they are dealing with traffic upsurge concerns. By capitalizing on these attributes, FinTech startups can guarantee the accessibility and peak performance of their application, even during heavy traffic.
RoR assists FinTech startup companies deal with analytics-oriented challenges by integrating with its data analysis equipment, in the following ways:
- RoR integrates with data visualization tools like D3, Chart, and Highcharts to create reciprocal and interactive data visualization. FinTech startups will thus have a better understanding of the data and decide on trends and data that might not be variable in the raw form.
- RoR integrates with data warehousing solutions like Redshift and Amazon to store and control massive data. This helps FinTech startups amalgamate data from different sources and do complicated queries and analyses.
- RoR integrates with machine learning tools like TensorFlow and Scikit-learn to create forecast models and make data-oriented decisions. This helps FinTech startups point out specific motifs in data and forecast future practices like recognizing high-risk clients or anticipating market trends.
Which front ends work well with the RoR backend for FinTech Apps?
If you are considering front-end frameworks while creating FinTech applications, there are plenty of choices that are compatible with Ruby on Rails:
- ReactJS: It is a very popular framework, compatible with RoR. Gaining popularity for its modular design, speedy rendering, and recyclable components, developers can easily integrate ReactJS with RoR using the React-Rails gem. Thus, they have a set of generators and associates that make the development process easier.
AngularJS: It is another renowned front-end framework compatible with RoR. It provides developers with a complete set of tools to create complicated web applications. Some of these tools are data binding, dependency injection, and routing. Developers can use the Angular-Ruby gem to integrate AngularJS with RoR. This gives them a set of commands and generators to simplify the development of AngularJS applications.
VueJS: A developing front-end framework, VueJS is also compatible with RoR. When it comes to simplicity, flexibility, and efficiency, VueJS is simply perfect. Developers can use the VueJS-Rails gem to integrate VueJS with RoR. This gives them a set of helpers and generators that simplify the development of VueJS applications.
EmberJS: This front-end framework, also compatible with RoR, provides a powerful set of tools that make the creation of complicated web applications smooth. Some of these tools are data binding, routing, and testing. Developers can use the Ember-Rails gem to integrate EmberJS with RoR. This gives them a set of helpers and generators that simplifies the development of EmberJS applications.
All of the front-end frameworks discussed above are remarkable in their own way. They can all be used with Ruby on Rails to develop FinTech web applications. Choosing the correct framework will mostly depend on the requirements of each project and how professional the development team is.
Ruby on Rails for FinTech: Real Case Histories
Let us look at some of the major FinTech business enterprises that use Ruby on Rails in their backends:
Coinbase: It is a renowned and one of the greatest US-based cryptocurrency exchange platforms. Coinbase uses RoR to deal with user verification, payment processing, and other backend activities. As of 2022, it has a record of over 103 million users.
Robinhood: It is a free-of-cost investing web application that uses RoR to strengthen its backend. It also allows stock trading. The scalability of RoR helps the app deal with large-scale trades happening on the platform. As of 2022, this company has earned about US $1.03 billion in the US.
Betterment: It is an American financial planning enterprise that uses RoR to deal with user verification, account control, and investment feedback. The DRY principle of RoR components helps them tackle UX design issues. By 2023, the platform will reach up to 91,00,000 user accounts.
Stripe: It is a payment processing enterprise that uses RoR to deal with backend activities like billing, invoicing, and handling transactions. As of 2022, the enterprise has been valued at about US $94.4 billion.
To sum up, there is no denying that Ruby on Rails plays a very important role in FinTech industries. Its involvement is majestic, mostly because it prioritizes speedy development, scalability, and security measures. Major FinTech enterprises use RoR to deal with crucial backend functions like account management, data analysis, and others, as has been discussed at length in the previous section.
Conclusion
Web developers, who understand the importance of security and traffic concerns in the FinTech industry, will readily agree that Ruby on Rails provides them with the best output. It is quite vital to choose an appropriate full-stack development enterprise that is compatible with your FinTech application front-end as well as a strong backend like RoR. This is how you can fulfill your dream of making your FinTech company a great success!
Frequently Asked Questions (FAQs)
Which Ruby on Rails gems are crucial for FinTech app development?
Devise, Stripe, Pundit, Paperclip, RSpex, Sidekiq, etc., are some of the most important RoR gems that every developer needs to develop a FinTech application. They come with a broad spectrum of functionality like user verification and permission, payment processing, authority control, file attachment, testing, and background job extraction. These RoR gems considerably simplify the process of development, consequently making FinTech applications made with RoR with greater functionality and efficiency.
Which technologies are suitable for Finance app development?
Digital and cryptocurrency, blockchain mechanisms, smart contracts, InsurTech, RegTec, stock trading applications, online payments, crowdfunding platforms, open banking, and RPA are some of the most widely used technologies in FinTech. As HackerRank assesses, Python, C, C++, C#, Java, and Ruby on Rails are some of the prevailing and strong coding languages in the FinTech industry.
How does FinTech make money?
FinTech’s approach to making money is innovative, unlike conventional financial enterprise models. They have added a layer of extended financial access, ability, and independence, thereby providing enterprises with the best experiences that are worth drooling for. The global FinTech market will supposedly reach about $310 billion by 2022, with a growth rate of 25% from last year.
