FinTech
FinTech is a combination of two words: “Finance" and "Technology." It refers to software, apps, and other technologies that improve and automate financial services for individuals and businesses. Think of it as using technology to make money management easier and more efficient.
FinTech examples
Fintech encompasses a wide range of applications and services that are reshaping the financial industry. Here are several examples to make the notion clearer:
Payment systems
Mobile payments. Using smartphones for transactions (e.g., Apple Pay, Google Pay).
Peer-to-peer payments. Transferring money between individuals (e.g., Venmo, Zelle).
Cryptocurrencies. Digital currencies operating on blockchain technology (e.g., Bitcoin, Ethereum).
Lending and borrowing
Crowdfunding. Raising funds from a large number of people (e.g., Kickstarter, Indiegogo).
Peer-to-peer lending. Connecting borrowers and lenders directly (e.g., Prosper, LendingClub).
Digital wallets. Storing and managing digital payments (e.g., PayPal, Alipay).
Investment and wealth management
Robo-advisors. Automated investment platforms (e.g., Betterment, Wealthfront).
Crowdfunding platforms. Investing in startups and projects (e.g., Kickstarter, Indiegogo).
Cryptocurrency exchanges. Platforms for trading cryptocurrencies (e.g., Coinbase, Binance).
Financial management
Personal finance apps. Budgeting, saving, and tracking expenses (e.g., Mint, YNAB).
InsurTech. Using technology to improve insurance services (e.g., Lemonade, Coverage).
FinTech is one of our favorite domains! MWDN has been hiring specialists for FinTech projects for many years. Today, our portfolio includes some well-known cases like VatBox, an app to manage your taxes, and Charge, a popular wallet with benefits.
How does a FinTech app work?
Let’s get to know how FinTech works with the example of a banking app. A banking app typically functions by connecting to a user's bank account through secure APIs. This allows the app to access account information, initiate transactions, and provide various financial services.
These are some of the key components and processes involved in the work of a FinTech banking app:
User authentication. Strong security measures are essential to protect user data. This often involves multi-factor authentication (MFA) like fingerprint or facial recognition.
Account linking. Users connect their bank accounts to the app using secure APIs provided by financial institutions.
Transaction processing. The app facilitates fund transfers, bill payments, and other transactions through secure connections to the user's bank.
Data security. Robust encryption and security protocols are implemented to protect sensitive financial data.
User interface. A user-friendly interface allows customers to easily navigate and perform various financial tasks.
Push notifications. Real-time alerts for transactions, low balances, or other important notifications.
Additional features may include budgeting tools, investment options, and other financial management features.
What technologies are used in FinTech projects?
Fintech is a technology-driven industry that leverages various tools and platforms. Its core technologies include blockchain, which underpins cryptocurrencies and provides secure, transparent, and decentralized transaction recording; AI and ML, which are used for fraud detection, risk assessment, algorithmic trading, and personalized financial advice; cloud computing, which provides scalable infrastructure for fintech applications; big data to processes vast amounts of financial data for insights and predictions, and cybersecurity to protects sensitive financial information from cyber threats.
Among the most popular programming languages and frameworks developers use to create FinTech apps are Python, which is popular for data analysis, machine learning, and backend development, Java, robust for enterprise-grade applications and financial systems, JavaScript, which is essential for front-end development and web applications, C#, which is used in various fintech applications, especially in the Microsoft ecosystem, and Ruby on Rails, known for rapid development and web applications.
Other technologies might include biometrics for secure authentication (fingerprint, facial recognition), API integration to connect different financial systems and services, and data analytics for extracting insights from financial data. The choice of technologies depends on the specific fintech product or service being developed.
What kind of specialists do you need for a FinTech project?
Building a successful fintech product requires a diverse team of specialists. You will need both technical and business specialists. Among them:
Software engineers to develop the core functionalities of the fintech application.
Data scientists to analyze financial data to extract insights and build predictive models.
Blockchain developers for projects involving cryptocurrencies or distributed ledger technology.
Security experts to ensure the protection of sensitive financial data.
UI/UX designers to create user-friendly interfaces.
Financial analysts to understand financial markets and products.
Product managers to define product vision and roadmap.
Compliance officers to ensure adherence to financial regulations.
Risk managers to assess and mitigate financial risks.
Full-Time Equivalent (FTE)
Full-Time Equivalent (FTE) is a metric to gauge the total working hours of employees in a company. It's sometimes called Whole-Time Equivalent (WTE).
How to Calculate FTE?
Determine the total hours worked by all employees, divide by 40, and round to two decimal points:
Total hours by all employees ÷ 40 = FTE
E.g.: If seven employees work a combined 170 hours weekly, the FTE is: 170 ÷ 40 = 4.25
Essentially, your company operates with the equivalent of 4.25 full-time employees.
Applications of FTE
Business planning. HR departments use FTE to strategize staffing. By assessing the total hours needed for the company or a project, FTE provides a clearer picture of staffing requirements.
Government program eligibility. In the U.S., programs like the Paycheck Protection Program (PPP) use FTE to determine if businesses qualify for them. The metric also helps businesses ascertain if they're considered an Applicable Large Employer (ALE) and if they're eligible for certain tax credits.
FTE employee criteria
Typically, an FTE employee works 40 hours weekly (or 2,800 hours annually). While many businesses recognize a 40-hour week as full-time, the IRS (the Internal Revenue Service) views 30 hours weekly (or 130 hours monthly) as the threshold. Some businesses set a 37.5-hour week, excluding the daily half-hour break.
Understanding FTE percentages
FTE 100% (or FTE 1.0) represents a full-time worker. This can be one person working 40 hours or several part-timers together, equating to 40 hours.
E.g.: An ice cream truck operating 20 hours weekly needs 0.5 FTE. If it runs daily, it requires 0.875 FTE. Two trucks running simultaneously need 1.75 FTEs.
0.5 FTE refers to a part-time position, roughly 20 hours weekly. Such roles might include project leads or supervisors who don't need to work full weeks.
Special FTE considerations
ALE (Applicable Large Employer) status. For determining ALE status in the U.S., the Internal Revenue Service sets a 30-hour work week as the standard.
Small business tax credit. For U.S. companies, this credit assists in covering employee health benefits costs. Eligibility criteria include having fewer than 25 FTEs.
FTEs for this purpose can be calculated in three ways: (1) actual hours worked, (2) days-worked equivalency, or (3) weeks-worked equivalency, with the final FTE count determined by dividing total hours by 2,080.
PPP eligibility. For the Paycheck Protection Program, FTE helps in loan amount determination. FTEs are averaged over specific past periods to determine the figure.
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Summing up, FTE is a versatile metric used by businesses for diverse purposes, ranging from staffing to regulatory compliance. It's crucial to understand its nuances and apply the appropriate calculation method based on context.
Full-time hours
Across the globe, the definition of "full-time" employment varies significantly, influenced by cultural norms, economic conditions, and labor regulations. While the 40-hour workweek is a standard benchmark in countries like the United States, other nations, such as France, lean towards a 35-hour week. Furthermore, some countries in Asia are known for longer working hours, whereas Nordic countries often prioritize work-life balance with shorter work weeks.
This diverse tapestry of work-hour norms is a testament to the wide-ranging approaches to productivity, leisure, and well-being in different cultural and economic contexts. Let's explore how "full-time" is defined across various nations and the implications of these variations.
Full-time hours in the US
In the US, a typical workweek is 40 hours – five days a week, eight hours a day. However, definitions vary. Some employers see 37.5 hours as full-time, accounting for a 30-minute lunch daily, while for others, 35 hours, including a one-hour lunch, is full-time. Though the common benchmark is 40 hours, other factors might influence this number.
Benefits of working full-time
Eligibility for benefits such as health and dental insurance.
Access to paid vacation and sick days.
Generally, there is more job security compared to part-time roles.
A routine that offers a structured lifestyle.
What perks come with full-time work? Often, full-time positions come with:
Paid vacations.
Sick leave.
Health and dental insurance.
Retirement plans with matching contributions.
Stock ownership opportunities.
Beyond federal requirements, companies can customize their benefit packages.
How is full-time defined by employers?
In the US, most employers see 40 hours a week as full-time. But, some base it on shifts rather than hours, which is less usual.
The IRS provides guidance on this. A full-time employee, according to them, works at least 30 hours weekly or 130 hours monthly. They suggest two methods to assess this:
Monthly measurement – check if an employee's service reaches 130 hours every month.
Look-back measurement – evaluate an employee's status during a "stability period" based on their service hours in the prior "measurement period."
What about salaried workers?
Usually, salaried employees work a minimum of 40 hours weekly. However, the Fair Labor Standards Act (FLSA) doesn't specify full-time for them, allowing employers to set their criteria. Some salaried roles, due to their specialized nature, are exempt from typical hourly tracking and overtime rules under the FLSA.
Even if deemed full-time, an employee might not get all the perks. A worker putting in 35 hours might miss out on health benefits if the company's threshold is 40 hours.
Notably, in the European Union, the Working Time Directive caps the average working week at 48 hours. Yet, individual countries can have variations. For instance, France's standard workweek is 35 hours.
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As your outstaffing partner, MWDN analyzes the norms of full-time hours and full-time employee benefits in countries where you hire to make sure that your dedicated developers work according to your agreement and get all the benefits they deserve based on their type of employment.
