How to Make a Banking App to Win the Game in a Long Run

According to statistics, today, about 2.043 million people around the world use online banking services. And by 2024, this figure will grow to 2.551.8 million. Does this mean that banks should make every effort to create software solutions that meet the needs of a modern client and transfer some offline bank branch services to the digital plane? Definitely, it does.

With a financial application for clients, your financial organization or bank can boost customer loyalty, increase the total level of income, and reduce the overall cost of services. Let’s discuss the specifics of such products in detail below and figure out how to create a mobile banking app step-by-step.

Let’s start our overview from the banking apps market research. According to Statista, by 2022, nearly 80% of all millennials in the US are expected to become regular banking apps users. This means that the new generation almost cannot imagine its existence without such digital solutions.

As for the benefits for you as a bank or financial institution, you’ll profit from an app as it is clearly visible that the global capitalization of the banking application market is growing rapidly every year. In 2015, it was only $0.6 billion, and by 2020, it reached $3.6 billion. Is this not an indicator of the fundamental need for an application for each bank? The answer is obvious.

So instead of being puzzled by the potential need for such a product, we should rather look at the main trends in this niche.

Trends of Mobile Banking

What are the main trends in the development of banking applications? According to Businessinsider and our research based on top mobile app in the niche (read the Top-tier Examples of Mobile Bank Applications section below), here they are:

• From several functions to a full-on assistant. Today, instead of offering users just a few features, mobile banking applications actually replace a visit to a bank branch;
• Product for advanced users. Since banking applications are so demanded by millennials, financial institutions can offer users much more customization and all sorts of app features for control and navigation;
• Integration with mobile payment tools. In times of the COVID pandemic, it is essential to have a contactless payment option in the application, for example, using an electronic wallet or NFC;
• Enhanced cybersecurity. Providing advanced users with two-factor authentication and other secure mechanisms in a banking application, e.g., face recognition, is a growing trend in the niche;
• Voice payments. Because of the popularity of voice search in general, this feature can be optimized for making payments;
• Chatbots. Instead of communicating with the call center staff every time a problem arises, customers more and more often prefer getting answers to their questions via a chatbot;
• Integration with third-party services. Finally, you can offer your clients a flexible system of discounts when using your partners’ services.

What Banks Get from Mobile Application Presence in Retaining Customers

A well-designed mobile banking application will provide your business with many benefits, including:

• Increasing customer value. A mobile banking application is always about personal communication with a client. This means that they will feel their value and significance every time they interact with the app;
• Strengthening the brand. It is obvious that the launch of your mobile application is a kind of bar, which represents the high status of the bank;
• Providing fast feedback. No bank with tens of thousands of clients is capable of providing processing of client requests with only physical offices and a call center as fast as a mobile application does;
• Providing competitiveness. Due to the popularity of developing mobile banking software as a service, we can conclude that almost every progressive bank has such an application. And if you don't have it yet, it means that you need to hurry up to create a bank app so as not to lose your competitive edge;
• Increasing the number of communication channels. The mobile app is another channel of interaction with customers, which, on the one hand, makes banking transactions easier for them and, on the other hand, increases your profits.

Top-tier Examples of Mobile Bank Applications

Finally, let's take a quick look at five mobile apps provided by the most famous banks in the world:

• Bank of America Mobile Banking App. This application with advanced security mechanisms does not just provide access to the accounts of bank customers — it also has access to FICO bank accounts, a check recognizer (using a smartphone camera), and cashback services. Now the app has 4.6 stars in the Google Play store based on 896,672 votes;
• Capital One Mobile Banking App. This application allows users to conduct transactions, find the nearest ATMs and bank branches, as well as find out their credit rating. The app also supports Touch ID, SureSwipe, and has an integration with Apple Watch. This app has 4.8 stars in the App Store based on ‎4,547,965 votes;
• Chase Mobile Banking App. In addition to standard financial transactions, the application implements tools for storing completed transactions for up to seven years. The application also has a geolocation function for finding ATMs. Currently, the app has 4.4 stars in the Google Play store based on 1,716,908 votes;
• Discover Mobile Banking App. It is a very advanced product with the ability to quickly view data without logging in. There is also a transaction scheduling function for recurring payments. The app has 4.9 stars in the App Store based on 3,259,069 votes;
• TD Bank Mobile Banking App. This application has a standard set of features with all kinds of money transfer options and excellent analytical tools. And, of course, its creators did not forget to provide integration with geolocation tools to find the nearest ATM. The app has 4.8 stars in the App Store and ‎214,357 votes in all.

Formally, there are five main types of mobile banking applications.

Near Field Communication (NFC)

This is a rather new technology that allows financial institutions to make contactless payments via a user's smartphone. Note that the ITS OS additionally requests the client's fingerprint to confirm the transaction.

Digital wallets

Digital wallets contain all the data of a user's bank cards and thus eliminate the need to use their plastic versions. They are usually integrated with NFC solutions.

Quick Reply (QR)

A mobile QR code scanner allows you to check out goods at offline points of sale and pay bills according to the generated list of goods.

Internet payments

The vast majority of banks have mobile applications that allow online payments through well-known payment systems like PayPal or Stripe.

Mobile transaction management

This type of virtual bank application provides users with end-to-end control over transactions carried out through the bank card. Thus, in most cases, there is no need for a physical visit to the bank.

Modern mobile banking solutions, as a rule, include the properties of several of the above applications at once.

One of the most popular banks in India, HDFC Bank, offers a fairly comprehensive overview of basic features for a mobile banking application. As for our experience, we can highlight a slightly different set of standard features that should be present in an average internet-only bank.

Authentication and authorization

Multi-factor authentication provides enhanced security over the static password and single-factor authentication processes. In particular, this enables banks to comply with industry regulations. Also, very often, banks use biometric data of customers in their digital solutions.

Transaction management

Account management is a trivial functionality that includes the ability to view the balance, make money transfers (including regular payments), display the transaction history, etc.

Customer support

It is essential to allow clients to interact with live bank managers to solve urgent problems. Alternatively, you can also integrate a chatbot.

Geolocation

The overwhelming majority of mobile services offered by banks are integrated with API for geolocation, which helps to detect ATMs, terminals, and bank branches within walking distance of the user.

Push notifications

Since the app is not always active on the user's device, you can integrate push notifications to send urgent and regular messages about transactions, updates, etc.

What features will be nice to have in the mobile app of your financial institution? Let's find out.

Cost optimization tool

This feature will help clients plan their budgets wisely and save more. In particular, it contains analytical functionality that allows you to identify the most expensive cost niches.

Cashback

This feature provides a return of a certain percentage of funds spent on services or goods in partner organizations.

Personalization

It is great if the user is able to choose a theme for the application, place an avatar, and set other personalization settings.

Chatbot

Modern chatbots can perform more than 80% of the tasks previously assigned to the bank's live staff. In particular, they handle most of the client requests, which are usually transferred to the call center.

Bill-splitting

This is another useful feature that allows users to automatically calculate a separate share of the total bill in a restaurant or other establishments visited by companies of people.

Voice payments

Voice payments help increase the availability of the app for users with disabilities.

Fraud alerts

You can also extend your existing security solution with alert notifications of possible customer account fraud.

Integration with wearable devices

In the era of smartwatches, it will be advantageous to provide the ability to transfer some of the application's functions to wearable devices.

Withdrawing funds without a bank card

You can provide your bank customers with the ability to withdraw cash from an ATM through confirmation on a smartphone within the application. In this case, a credit card is not needed.

What are the main reasons why creating your own bank application can be difficult? According to the experience of many of our colleagues, here they are:

• The application interface should have an extremely low entry threshold. Obviously, your application will be used not only by advanced smartphone users but also by those who experience certain difficulties in mastering new interfaces. This is why creating an intuitive one can be a real challenge;
• You have to implement AML and KYC tools. Do you know that KYC and AML fines totaled $10.4 billion in 2020? That’s why you are obliged to exclude the possibility of spoofing the data of your bank's clients and find a vendor that would be able to develop a truly reliable system of authorization and authentication for users;
• You must guarantee the privacy of your customers' data. Banking applications must comply with a much larger number of security certifications than a regular application. Just keep in mind that according to Kaspersky report, the average number of attacks by mobile banking trojans in 2019 was of approximately 270,000 attacks per month;
• You must implement blocking payments. According to this research, 90% of the largest banks in Europe have received sanctions for money laundering-related violations in the past decade-plus. Thus, you need to provide the ability to instantly connect to the customer accounting system to block credit or deposit cards in given situations;
• Your product must comply with all relevant regulatory requirements. In addition to compliance with multiple security policies, you will also have to take care of compliance with many other requirements, for example, the high level of user experience for all user segments, including those with disabilities (for example, 57 million people with disabilities live in the United States, and this is a colossal part of your potential target audience);
• You may need a highly specialized project team. To implement specific functionality, for example, based on blockchain, you may need a highly specialized team of experts.

To make a bank application, you may need to use the following technologies depending on the platform you choose.

For cross-platform development:

• Flutter;
• React Native;
• Xamarin.

For hybrid app development:

• Cordova/PhoneGap;
• Ionic.

For iOS development:

• Objective-C;
• Swift;
• Xcode IDE;
• Appcode;
• UIKit;
• SwiftUI.

For Android development:

• Kotlin;
• Java;
• Android Studio and Android Developer Tools (ADT);
• Jetpack Compose, or you can use branded Android UI software.

Now is the time to find out how to create a mobile banking app.

Step 1: Conduct a research

Before you start a mobile bank development, it is essential to conduct marketing research that would highlight the leaders and outsiders of the market, as well as identify their strengths and weaknesses. Going forward, this will help you compile a win-win list of specifications for your application.

This stage usually takes a month or two. To optimize it, you can use generally accepted strategies, for example, SWOT analysis - research aimed at identifying and assessing the strengths and weaknesses of the project, its opportunities and potential threats. Opportunity is defined as something that gives a project a chance to achieve something new: win new customers, introduce new technology, rebuild business processes; in turn, threats are factors that can damage the project, deprive it of its existing advantages: the emergence of new competitors, substitute products, etc.

Step 2: Build a prototype

Since a banking application is a rather complex product, developers usually first build a prototype based on specifications drawn up with the customer's participation. Only after approval do they begin the software development process.

In order for the prototype to reflect the functionality of the future product, you need to conduct a number of primary studies:

• interview with the product owner. During this procedure, the designer clarifies the expectations and needs associated with the product;
• user story. There should be a lot of them. The standard formula for a user story looks like this: "being <role or user type>, I want to <perform an action> to <get the result>";
• jobs stories. This is where you have to focus on the needs of the user. To build them, use the formula: "Situation" -> "Motivation" -> "Expected result";
• Jobs-To-Be-Done. This is a comprehensive study that determines the scope of the upcoming work and helps to design a product that meets all the needs of the user.

Step 3: Provide the security

When it comes to mobile banking applications, it is obvious that this type of project should have much more security guarantors than other public applications. So to ensure proper compliance, you need to hire a team that is experienced in creating similar products.

For example, for banking software, the list of regulatory security requirements (such as GDPR, PSD2, PCI DSS, CCPA, etc.) is significantly longer than in the case of ordinary applications. This means that before starting to work on a product, it is important to check whether the planned functionality complies with all these policies.

Step 4: Design the UI UX

Design of a mobile banking application usually precedes the implementation of business logic and functionality and allows developers to demonstrate a primitively functioning version of the product to the client.

Speaking specifically about the design of mobile banking applications, it is very important for them to provide web accessibility, which, by the way, is regulated at the legislative level in some countries. Most web accessibility laws are based on WCAG 2.0 guidelines.

Step 5: Choose a tech stack

Before starting to implement what is hidden from the eyes of the target audience, the developers choose a tech stack, largely focusing on the client's business goals and budget.

Which software tools developers will use depends on the functionality of the application and the chosen mobile OS. We reviewed the standard solutions above, in the Performable Tech Stack You Need to Create a Banking Application section.

Step 6: Develop the app

After the final approval of what is already done, developers begin to implement the application functionality. As the separate stages of work on the application are completed, it is tested many times.

In order for the product to meet your expectations as much as possible, it is important to regularly interact with the development team and give them feedback. This will reduce the number of edits and speed up team workflows. Depending on the complexity of the functionality, product development can take from three months to six months.

Step 7: Release and maintain

After successful testing, the product is launched into release and is accompanied by IT specialists from the developer's side so that in case of problems, they are promptly eliminated.

If we talk about public applications, they are uploaded into Google Play and App Store, depending on the OS for which they were created. It is important to remember here that at the stage of transferring the application to public access, the costs do not end: you will periodically have to pay for server capacity, support for some technologies, integration with payment gateways, etc.

Step 8: Improve and update

As the client’s business develops and market requirements grow, the application can be optimized and supplemented with new functionality.

On what aspects the application can be optimized, a new marketing research will help you find out (see the Step 1). Thus, the entire software development process can be considered cyclical.

So how much does it cost to make a banking app? The cost of your future mobile banking application depends on:

• the complexity of the hierarchy in the workflows associated with the development of the application (the more logical blocks the application contains and the more specialists in different fields it requires, the more complex the hierarchy);
• a technology stack (especially when it comes to native Android software development, with its inherent diversity in mobile devices);
• deadlines;
• integration with third-party services and API;
• the format of interaction between the client and the development team: fixed price, time and materials, dedicated team, team expansion, or outstaffing.

How a Reliable Software Vendor Can Set Your Development on Track

To build a bank application and get a smoothly working product, choosing a development team that clearly understands what and why they are doing is essential. The right team will guarantee you:

• cost-effectiveness. Experts with extensive experience will competently prioritize and choose such a technical stack so that the cost of the final solution is the lowest possible;
• high quality of product or service. The competence of all team members and the well-established interaction between them will help to get a high-quality product at the end;
• high quality of customer service. A professional project team will not disappear immediately after launching the application on Google Play or App Store and will provide prompt technical support at your first request;
• ethics and integrity. Good specialists will draw up a competent NDA, in which your intellectual property and private data of your bank's clients will be under complete nondisclosure.

Setting up a Development Team

Even though developing a mobile banking app may seem complex, a small team of 10-12 people can handle it. It will most likely include the following specialists in the right amount (in general, this is a standard set of specialists who have to work on the creation of mobile software):

• Project Manager;
• Business Analyst;
• Designer;
• Backend Developer;
• Mobile Developer;
• QA and Testing Specialists;
• DevOps.

Which platforms to choose: Native (iOS/Android), Hybrid (Flutter), or Cross-platform (React Native)?

Hybrid and cross-platform development, which imply the creation of a single application for both mobile platforms, will cost at least 30% less than native development. However, this "one-size-fits-all" approach to building a mobile banking app can make it harder to access native OS functionality.

Note that this statement is more relevant for mobile games than for mobile banking software, which means that the choice in favor of cross-platform or hybrid development is obvious in all cases, except for those when the main target audience of the application is users of a specific mobile platform. In a nutshell, hybrid or cross-platform solutions are cheaper and have a shorter time to market, but native ones have better performance and UX.

MVP Features

If you doubt the choice of functionality for your future neobank application or have a limited budget, it may be better to start with MVP development. In addition to the above key features, we recommend that you also consider the following features:

Advanced Functionality

If we are talking about advanced products, you will probably also need to use the following technologies when you make a mobile banking app:

• Artificial intelligence (AI). Artificial intelligence can be used as a basis for chatbots or, for example, for intelligently detecting suspicious activity with a customer card;
• Distributed ledger technology (DLT). It is an information storage technology. The key features of it are the sharing and synchronization of digital data according to the consensus algorithm, the geographical distribution of equivalent copies in different physical locations, and the absence of a central administrator. In a narrower sense, this is a blockchain (which is used by, for example, Wells Fargo bank), which is being actively implemented by many banks worldwide;
• P2P transactions. P2P transactions are the easiest way to send money from one individual to another. Such transactions can be used to pay rent, split a restaurant bill between friends, etc.
• Robotic Process Automation (RPA). RPA is the automation of business processes with the introduction of high-tech approaches and tools, for example, machine learning and artificial intelligence;
• Cloud computing. Cloud computing allows for incremental increases in computing power, provides advanced tools for capturing massive amounts of data, and the ability to quickly scale the environment as it grows.

Related Services That Influence the Cost

Also, technical support and maintenance services significantly affect the budget of your digital product. In particular, there are a number of applications that need to get back to normal operation as quickly as possible in the event of a problem. Due to the urgency, such support services can be quite expensive.

Total Sum

So how long does it take to build a banking app, and how much will it cost as per typical market rates?

According to the complexity of the final product and the development process, the budget for banking app development can be around $100k-500k. But when it comes to cooperation with an in-house team, it can grow up to $1 million. As for MVPs, they may cost only $100k, depending on the development team you choose. Note that all these rates are applicable to the services of our colleagues from the USA, Australia, Canada, and Western Europe.

If we talk about the time needed to develop an online banking application, in the case of MVP, it can take around 700 hours, and in the case of a full-fledged product — about 1250 hours.

Let's summarize this data again in the table below, focusing on the average developer rates depending on their location (Note that in the case of India, many clients mention the poor quality of the final product and inconvenient interaction with contractors):

Related Services That Influence the Cost

Also, technical support and maintenance services significantly affect the budget of your digital product. In particular, there are a number of applications that need to get back to normal operation as quickly as possible in the event of a problem. Due to the urgency, such support services can be quite expensive.

Total Sum

So how long does it take to build a banking app, and how much will it cost?

According to the complexity of the final product and the development process, the budget for banking app development can be around $100k-500k. But when it comes to cooperation with an in-house team, it can grow up to $1 million. As for MVPs, they may cost only $100k, depending on the development team you choose. Note that all these rates are applicable to the services of our colleagues from the USA, Australia, Canada, and Western Europe.

If we talk about the time needed to develop an online banking application, in the case of MVP, it can take around 700 hours, and in the case of a full-fledged product — about 1250 hours.

Let's summarize this data again in the table below, focusing on the average developer rates depending on their location (Note that in the case of India, many clients mention the poor quality of the final product and inconvenient interaction with contractors):

EPAM Anywhere Business creates mobile banking applications in the best way. Fintech is one of the main areas of our specialization; here, we use advanced technologies and innovative approaches to fully meet the needs of both our customers and end-users, as well as to ensure compliance with all existing industry regulations.

Let's take a look at two projects from the fintech niche that demonstrate our experience in developing a banking application.

The Case of ImageNPay

EPAM has been working with ImageNPay since 2018. The team has taken responsibility for developing a startup powered by digital payments that eliminate the need for plastic credit and debit cards. The following technologies were used:

Since this project is a startup, the main goal of its founders is to offer an environmentally friendly and budgetary alternative to plastic cards, and the EPAM team managed to achieve a 100% result. Now the app has a 5-star rating on the App Store, which means that real users are satisfied with it.

The Case of CitiConcierge

The world-renowned bank Citi, with over 200 million customers in over 160 countries, has announced a competition to develop a mobile banking application involving 3,000+ developers. As part of this competition, EPAM has created a personalized banking platform called CitiConcierge. The main idea of ​​this software is to provide interaction between the bank's clients and its employees in the digital plane.

The main technological solution was used in the process of working on this fintech app is Gimbal beacons connected to local Wi-Fi, as well as tools for native iOS development.

The main goal of this collaboration - to create a cutting-edge, consumer-focused application for Citi’s Digital Banking Platforms from scratch - was achieved. Now the company is working to integrate the solution into their Smart Branch.

As you can see, a multi-functional online bank:

• is almost a prerequisite for customer loyalty;
• provides competitiveness for a long time;
• opens new channels for interaction with customers;
• reduces the costs in comparison with hiring new staff.

If you want to build your own banking app, please EPAM Anywhere Business. We will create a banking application in Android or iOS platform for your own business needs. Note that our development platform doesn’t just specialize in the fintech niche as digital partners of the world's leading financial companies. We are the ones who set new trends in this industry and use the technologies of the future today.