In this blog, we are going to share the ABC of banking application development. At Syndicode, we have designed and developed online banking app solutions that require exceptional code quality, compliance with informational security standards, and smooth performance.
So Alex needs to open a bank account.
He checks the banker’s hours, calls in sick at work, knowing it will probably take him the entire day to wait in the line, and…
Wait a minute.
Alex doesn’t have to do that. All he really needs is to take his smartphone and download an app. He’ll get an account ready to use at the bank of his choice in a matter of seconds. It’s that easy!
No wonder the total number of mobile banking app users is projected to exceed 2.5 billion by 2024. Moreover, the NVCA report indicates that the total investment received by mobile banking app development startups in 2021 was over $55 billion and is growing steadily.
So, it’s definitely worth it to dig into the fintech mobile solutions market. The question now is, how to make a banking app?
There are several steps to take to ensure a profitable solution. In this guide, we’ll walk you through:
- Agile application development stages
- Widespread challenges in mobile application development for the banking industry
- Factors defining the final development cost
- Tips on making the development process easier and faster.
Sounds good? Read on.
Why build a banking app?
First, what is the meaning of mobile banking? It is a service allowing you to make financial transactions on your mobile device. It can involve receiving user activity information, purchasing goods and services, sending money to another account, etc.
The benefits of mobile banking app development for a customer are quite obvious:
- Easy way to control their finances
- 24/7 access
- Access to transaction history
- Quick payments
Business benefits of building a banking app include:
- Ability to carry out tasks regardless of bank’s business hours and holidays;
- 24/7 customer support access;
- Improved customer experience due to fast transfers;
- Automated recurring payments.
A bank may want to build a banking app since it enables them to:
- Expand its user base due to the overall popularity of mobile applications;
- Reduce operating costs since the bank can have fewer branches;
- Improve customer experience due to services availability 24/7;
- Provide better personalization thanks to AI, ML, chatbots, etc.;
- Improve their marketing using data obtained from user devices.
Syndicode’s experience in fintech development
Syndicode uses advanced technologies and innovative approaches to web development. We have well-established processes that help us provide appealing, intuitive, and secure solutions that help users solve their pain points.
We have vast experience in setting up secure communication between independent entities. In our recent project, Swift Comply, we used Redis pub/sub within a custom network, making the connection invisible to the rest of the world without custom-built APIs and extra login management.
The same project has spacial data processing feature developed by Syndicode’s team from scratch. It uses zip codes to calculate distances to service providers and displays vendors within the specified radius of the user’s location. The software’s price management tool works based on that feature, too.
Another client got a custom text recognition tool that uses Google Cloud Natural Language AI. The app can read a user’s business card and automatically fills in the required data into their profile.
We also have experience in creating solutions that prevent access from unauthorized individuals even if they have the credentials.
We are a value-driven company that helps clients achieve their goals most efficiently. With our remote employees mainly located in Eastern Europe, the cost of our services is about 50-60% lower than that of the US developers. All Syndicode’s employees have an excellent command of English, and we manage all the hiring and staff maintenance work.
Basic steps to developing a mobile banking application
The mobile banking development process can be broken down into the following steps:
- Research (market, competitors, target audience analysis)
- Prototyping
- UI/UX design
- Development
- Testing
- Release and maintenance
- Marketing and advertising
The research stage is often referred to as the discovery phase. Its goal is to develop a shared understanding of the project objectives, functionality, and bottlenecks between the client and the development team.
Step 1. Market research
Before you can build a banking app, it’s essential to gather facts about the banking market dynamics as it affects the trends in banking apps. Market research will help you avoid issues and identify possibilities.
For online market research, the following tools can be helpful:
- Similarweb
- Google Keyword Planner
- Ahrefs or SEMrush
- Statista
- Facebook Audience Insights
Don’t limit yourself to online methods, as offline research lets you access primary information sources directly. The most widespread methods of market research are:
- Surveying the target audience
- Interviews
- Focus groups
- Social media listening
- Observing the target audience in their natural environment
As a result of your market research, you should be able to answer the following questions:
- How big is your potential market?
- Will you be able to expand your target market?
- What is the nature of products/services similar to yours?
- Your main competitors?
- What is the market share of each of your competitors?
- What is your unique selling proposition?
Step 2. Competitor research
The answer to “how to make a banking app?” partially lies in your competitor’s solutions. You need to know your competition to map the market position of your application and its advantages. First, prepare a list of the main competitors in your niche. As of this writing, the best mobile banking apps are:
- Ally
- Revolut
- Capital One
- Fidor Bank
- Chase
Review their features and outline their strengths and weaknesses. Additionally, you may want to identify your direct and indirect competitors.
Thus, the main direct competitors of Ally are the Bank of America iOS app, Capital One, Discover, and JPMorgan Chase & Co. They are of a similar size, have similar audiences and offers, and use the same promotion and distribution channels.
Ally’s indirect competitors are mobile banking platforms like Chime, Varo, Revolut, etc., credit unions, and digital wallets because they share the same audience but offer different sets of services.
Also, pay attention to industry trends. Currently, mobile banking development solutions tend to:
- Fully replace a visit to a bank
- Offer a lot of customization
- Integrate with mobile payment tools
- Have enhanced cybersecurity mechanisms
- Provide 24/7 customer support
Step 3. Target audience analysis
Before you can answer “how to make a banking app?”, you should find out who you are making it for. The mobile banking audience is vast since it covers people from 16 to 70 years old and above.
However, their behaviors and needs differ. Thus, the audience below 24 mostly uses banking apps for purchases, paying school fees, and transferring small amounts. At the same time, this is the largest portion of mobile banking app users.
A mature audience turns to mobile banking for paying bills, cash flow control, medium and large amounts transactions, and so on.
To avoid spreading thin and to build a banking app to generate revenue, you should determine your ideal customer. Identify the most profitable segment of the target audience and analyze their age, gender, income, occupation, and any other characteristics they may have in common.
Your goal is to make a clear picture of your potential clients and explore their personalities, interests, and needs. Afterward, you will focus your efforts on catering to their specific wants. As your application progresses, your customer base may change. So, revisit your Ideal Customer Profile regularly to add new details or even create a secondary ICP.
Step 4. Prototyping
Prototyping allows you to test a software product’s functionality, design, performance, and, ultimately, technical feasibility. Depending on the complexity to be tested, prototyping can involve anything from basic 2D sketching to full-scale MVP development.
Creating a prototype generally takes several steps. You can complete the routine once you have verified the correct work and feel of the product or its part. The steps are as follows:
- Visualization
- Design optimization
- Testing and collecting feedback
- Validation
After successful prototyping, you will have the banking app concept clarified and cut all the unnecessary features and elements.
Features of a banking app
As stated earlier in this post, mobile banking apps are most often used to check one’s balance, view transaction history, pay bills, and transfer money. Therefore, the core mobile banking app features are the following:
- Account management
- Balance information
- Cards and bank accounts management
- Recent transactions
- Deposit information
- Transaction management
- Make money transfers
- Display the result of a transaction
- Customer support
- Secure authentication
- Push notifications
- ATM, terminals, and branches location feature
You will also need some unique features to highlight your banking solution and enhance the user experience. Here is an example of good-to-have features from popular banking apps:
- Cost optimization tool. Ex.: Betterment enables users to set saving goals and configure automated deposits.
- Cashback. Ex.: Ally returns 2% from gas and grocery purchases to its Cashback Credit Card holders.
- Bill splitting. The UK-based Starlink bank allows sending out IOUs in a few taps using its mobile app.
- Cardless cash withdrawal. The Australian Commbank enables customers to get money from an ATM without a physical card.
- Integration with wearable devices. Most banks are now supported by Apple Pay and Google Pay which enable making payments with smartwatches.
Step 5. UI/UX design
A banking app’s UI/UX design must match the user’s needs with banking capabilities in an easy-to-use way. It must also match the owner’s business and marketing strategy to ensure consistency. There are several Do’s for a banking app design that will help you create a winning solution:
- Ensure clear, obvious, and intuitive access to services
- Ensure smooth user flow
- Make leaving feedback simple
- Be human-centric
How to make a banking app that has an excellent design? Don’t hesitate to use the iterative approach. Start simple, collect feedback, and move forward by implementing new elements. A/B testing will help you learn how to build a banking app that brings the most value to your customers.
Remember that personalization is a must and many banks leverage it using their client’s personal IDs. Also, developing a mobile banking application in 2022, you should plan for the rise of alternative UI such as VR and voice processing.
Step 6. Development
It takes a lot of time and knowledge to build a banking app. Not only do you need experienced developers, but you also have to ensure they are managed properly.
If you choose to do it on your own, here is a list of things you should prepare before starting mobile banking development:
- Business requirement document
- Software requirement specification
- Technical requirement specification
- Design documents
A project timeline will also help avoid scope creep. Next, you should allocate tasks to your team members and monitor the deadlines.
Alternatively, you can hire a project manager to plan and coordinate the mobile app development process. If you outsource the development or engage a dedicated development team, these services can come with PM assistance by default.
Tech stack
Choosing the right technology can cut development time and boost performance and maintenance. Depending on the specifics of your banking solution, the chosen operating system, and features, you can choose from the following technologies:
Hire the development team
Your development team should have experience building solutions similar to your project and should be easy to work with. That means their skillset, values, and approaches will differ depending on the project. However, there are several attributes that all good teams share:
- They treat documentation seriously
- They keep all project-related things in a single place
- They make their work transparent
- They are creative
- They use version control
- They automate repetitive tasks
You have several options for engagement models — turnkey development, outsourcing, and using IT consulting services. Each model has its benefits and limitations, so you should carefully consider your expectations and capabilities.
| Turnkey development | Outsourcing | IT consulting |
|---|---|---|
| Full responsibility on the development team Fixed price Project management on the vendor’s side Short time to market Better cost control Limited possibility to make changes after the project has started | Full responsibility on the development team Hourly-paid basis Project management negotiated Short time to market Limited visibility Potential miscommunication issues | Shared responsibility Hourly-paid basis Management on your side You need to have a development team available Increased security Company knowledge is retained |
Step 7. Testing
Quality assurance specialists should be a part of your development team to ensure that the new banking app meets all the quality requirements. While QA goes after development in this guide, it’s actually recommended that QA engineers join the project as early as possible. This way, they can make sure the project requirements are testable, prevent security issues, and eliminate bugs as soon as they appear.
If your team follows Agile practices, the developers will perform basic testing of every unit upon its completion. However, if you fully rely on developers for testing and spare QA, you risk ending up with a product with its parts not working well together.
Step 8. Release and maintenance
After successfully testing your app, it’s necessary to check if it complies with all the requirements of the target distribution service, such as Google Play or App Store. Your development team should prepare release notes and perform a soft launch. If everything looks good, you can finalize the launch of your banking solution and go full mode on marketing.
After release, you’ll start receiving feedback from the first users. New bugs may appear as the emulated environment used for testing cannot fully replicate real-life conditions. Your development team should be ready to detect and fix emerging issues immediately.
Step 9. Marketing and advertising
You should start marketing long before you build a banking app to have a pool of warm audience ready to try out the new product. Since you have done the research back when planning your app, you can also use this information for a marketing strategy.
From our experience, some of the most effective ways to promote a mobile solution are
- PPC campaigns
- Content marketing
- Email marketing
- Social media
- Employee marketing
We recommend you plan far in advance and leave yourself enough time to deal with any delays before the app’s hard release. Distribution services are particular about application quality, especially App Store, and the review process can be time-consuming.
Another effective way to drive customers to download an app is to place a smart banner on the bank’s website. Attracting visitors to a website first costs over 80% less than driving them straight to Google Play or App Store.
Challenges in mobile banking app development
Mobile application development for the banking industry comes with unique challenges in the technical and regulatory domains. Here are some of them:
Tech challenges
- Low entry threshold. The interface of a banking app should be easy to navigate for all age groups and people with different technical knowledge. This makes creating an appealing and intuitive design difficult.
- Payments blocking capability. The app should enable a bank to instantly connect to a customer’s accounting system to block their cards and prevent money laundering-related violations.
- Biometric authentication. It may be challenging to build a banking app for all Android devices due to their variety.
- In-memory data storage. All the downloaded and received data must be cleared when the app is deleted. It also must not be physically retrievable from the device in case of a hacker attack.
Regulatory challenges
- A banking app must comply with all regulations in the target area. If you operate in the EU, your app should comply with GDPR, PCI DSS Compliance, SEPA, and PSD2. For the USA, you must comply with numerous privacy, disclosure, fraud prevention, anti-terrorism, anti-money laundering, and other regulations that differ between states and some individual cities.
- 3rd party integration requires contract signing with every provider and may influence the project timeline.
Cost of mobile banking app development
At this point, you probably want to know the cost of banking mobile app development, do you? The total development cost consists of the following factors:
- The hierarchy complexity of the application workflows. The more logical ties there are between the application’s blocks, the more time and experience it takes to create a usable and accessible architecture.
- The technology stack. Some technologies are better suited for particular features but may take additional time to complete.
- The number of targeted operating systems. Android app development requires more time for testing due to the more extensive variety of different devices compared to iOS app development.
- The number and nature of third-party integrations and API.
- The development team’s size and cooperation model. The bigger the team, the faster they can complete tasks. At the same time, larger teams are more challenging to manage. Similarly, due to well-oiled processes, a software development company is more likely to build a banking app faster than a distributed team of freelancers.
- The development team’s location. US developers tend to charge more than their Eastern European counterparts while delivering the same quality of work.
Generally speaking, the cost of banking app development can range between $100K–$500K and more.
Wrapping up
Banking apps are a lucrative niche worth conquering. With the right amount of research and an experienced team, you can build a banking app that opens new communication channels with customers and reduces the operating costs of the financial institution it serves. Hopefully, this blog post gave you an idea regarding how to make a banking app.
Syndicode can provide you with expert developers, designers, business analysts, and other specialists to create an excellent mobile banking app for the platform of your choice. We are a custom software development provider and a digital partner assisting you at every step of banking app development, from initial research to development and post-launch support.
Frequently asked questions
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What is a mobile banking app?
A mobile banking application makes banking services available through a mobile device. It allows customers to conduct bank transactions such as fund transfers, checking account balances, making payments, etc. The main benefit of banking apps is 24/7 access from any location, provided there is an internet connection. They can also be customized to suit the user’s needs better, automate recurring transactions, and keep the user informed about the state of their balance, deals, or new services through push notifications.
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What are the requirements for mobile banking app development?
The popularity of top mobile banking software came from their ability to provide services 24/7. They also have a chatbot or another means of instant customer support. These apps are also very secure and use multi-factor authentication to regain authority if the account owner forgets their password. Many existing banking apps have an in-built QR code scanner that provides a fast way to perform a transaction. And they always keep the user informed about the latest activity, changes to terms, or news through push notifications. The latter can be customized or turned off. If you’re planning to build a banking app, consider these features as must-haves and brainstorm for additional functions that will highlight your solution.
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What is the difference between mobile banking and Internet banking?
Mobile banking provides access to banking services through a mobile device — a smartphone or a tablet. To use it, one should install an application. Internet banking or Online banking can be carried out on any device that is connected to the internet. It doesn’t require an app installation. Mobile banking solutions offer more security and can send push notifications to keep users updated about changes in their balance and other information. They can also be connected to other money management tools. Internet banking can provide more in-depth info about one’s bank accounts.
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How long does it take to build an online banking app?
The exact duration depends on the project size and whether you start from scratch or upgrade an existing solution. Other factors that affect the development timeline are the team composition, experience, tech stack, the targeted operating system, and how well the requirements were determined before the project started. For an average project, it may take 6—9 months and more to build a banking app MVP from scratch. However, you should consult your software development vendor to get an individual estimate for your case. They will also explain how to make a mobile banking app with the least investment.
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When did mobile banking start?
The first mobile banking app appeared in the UK in 2011. The Royal Bank of Scotland developed it for Apple iPhones. Since then, mobile banking has been overtaking the traditional forms of banking.