Mobile Banking Application Development [Key Takeaways and Prospects to Win the Race]

The broad-based mobile banking application development has become the new normal, urging financial institutions to go digital. Today’s customers demand a seamless experience 24/7 (in a matter of seconds, too) that regular banks can hardly deliver so far. Yes, we understand that bureaucracy (and, of course, conservatism) concerns may slow down digitalization. Yet, to win the race in building a banking app, you should rethink an old routine and switch to the latest technologies.

How to Develop an Online Banking App to Win the Race Key Takeaways and Prospects

Banking app development companies take into account that millennials, who have long used innovative FinTech products, and Generation Z at their start of entering the market, are spurring industry changes and individual financial institutions’ success globally.

To ease your task, OpenGeeksLab has gathered all the mobile banking application development fundamentals so that you could jump into the financial services industry with no worries.

Why You Should Go for Mobile Banking Application Development

Why start your own mobile banking application?

The banking mobile app development niche appears among the top-rated modern market segments. Analysts explain this boom by continuous strong smartphone experience incorporation into consumer life, COVID-19 outbreak, and quarantine measures.

As Allied Market Research states, in 2019, the online banking app market revenue reached $11.43 billion. The report claims these numbers almost triple, hitting $31.81 billion by 2027 at a CAGR of 13.6%.

Online banking apps statistics claim that in 2021 online mobile app market will make revenue up to 693 billion US dollars. So, ambitions among banking app development are raging, making business owners passionate about the evolution of the online banking sphere. What’s more, seven billion consumers are about to enter the mobile digital landscape by the end of 2021, with three billion of them entering mobile banking.

The US mobile payments will approach over 189 billion US dollars by the end of the year, says Statista. Needless to say that the COVID-19 pandemic impacted the market: 54% of people prefer to pay contactless.

As you can see, mobile banking application development popularity is based on its high user demand. Insider Intelligence’s Study reveals that 89% of respondents use mobile banking platforms. On top of that, a whopping 97% of millennials stated they utilize such services.

While thinking of how to make a banking app strategy, take into account that not only the youngest generations prefer mobile banking. Study shows that over 75% of baby boomers and 90% of Gen Xers claimed that they see benefits of such services.

Capital Banking Solution, CGI, ACI Worldwide, Microsoft, Oracle, and other corporate giants have undoubtedly influenced the banking app development market. Still, FinTech always welcomes ambitious newcomers with innovative ideas.

Seize the day to try yourself in online banking. However, so that nothing could hinder you from entering the banking mobile app development niche with ease, you should be aware of current data privacy and security laws for a target market.

Influential Data Privacy and Security Guidelines in Financial Sphere

Now, let's uncover the principal regulations to follow in the FinTech business.

Data privacy and security guidelines resist financial fraud, blackmail, or identity theft. Rules regulating mobile banking application development and usage usually differ depending on the location. Privacy stands on top of the list of crucial factors for choosing financial services with rates up to 65%.

Let’s go into greater detail.

1. PCI-DSS

The most global law regulating FinTech is the Payment Card Industry Data Security Standard (PCI-DSS). It holds control over card usage and provides instruments for cardholder data protection. All businesses dealing with card processing are subject to PCI-DSS.

2. GDPR

General Data Protection Regulation (GDPR) is the primary data protection guideline in the EU area. It requires all agencies distributing their mobile banking app development in the EU region to follow prescribed data privacy protection measures, even if the company claims not to process personal and sensitive user data.

3. GLBA and SOX

In the US, data protection in FinTech is regulated by Gramm-Leach-Bliley Act (GLBA) and Sarbanes-Oxley (SOX). Hence, GLBA includes:

  • Financial Privacy Rule (customers should be warned about their private data collected, processed, or shared)
  • Safeguard Rule (FinTech institutions should provide a written data protection plan)
  • Pretexting Protection (FinTech companies should protect their companies from blackmail or manipulations).

SOX, in turn, was launched to protect FinTech investors from fraud in financial reporting.

4. CDR

Consumer Data Right (CDR) regulates financial relations in Australia. From July 2020 CDR covers digital banks as well. Accredited providers are allowed to transfer data securely via Consumer Data Right service.

5. CP Act

The Canadian Payments Act (CP Act) sets a legal framework for financial institutions in Canada. It embraces the rules both for traditional and mobile-only banks.

Knowing and obeying the security regulations is only one step towards a seamless mobile banking app development experience. Proceed with the others in the next paragraph.

Crucial Steps to Incorporate in Banking App Development

Key priorities you should mind while developing a mobile banking app.

Online banking app is a complex process that requires a substantial preparation level. Before jumping into even simple mobile banking app project realization, consider the following:

1. Market Analysis and Project Plan

Market research is a fundamental preparatory stage of banking app development that cannot be neglected even if you have specific budget limitations. It helps you to understand future relevance of the project and how to build a banking app strategy. Market analysis gives an overview of current niche trends and predicts market conduct during several next years. It also provides competitor research so that you can learn from their mistakes.

Based on market research, you should develop a detailed project plan. Mind the niche you enter and specify the target audience to get efficient results. Do not try to cover all segments at once. Choose one aspect and create a banking app that will tackle the problem.

2. A Killer Business Strategy

Starting an online banking app, a business runner has several opportunities to go for: mobile, client, or Internet banking.

Mobile banking is a smartphone (or other portable iOS or Android-powered device) solution to manage individual bank accounts. It appears exceptionally convenient, as users should not physically visit banks anytime they perform a payment. You can settle complex issues via instant support chat (with a company representative or AI-powered).

Client banking is a solution for corporate accounts. It is installed on a PC and gives wider opportunities like the bank’s system and database access. What limits this product of mobile banking application development is the need to have a PC or a laptop with pre-installed software to perform some transactions.

Internet banking is a solution running within the web browser. Customers can use bank services 24/7 from anywhere as long as there is an Internet connection. However, you should be careful with it, as website data protection is naturally lower than in other options.

Choosing a suitable strategy, mind your business objectives and target audience of your future mobile banking app development.

3. Reliable Software Vendor

Partnering with a reputable software vendor makes half of your future success. Do not hurry up to collaborate with the first encountered banking app development team. A careful study of the company’s portfolio helps to understand whether it has the necessary expertise to create a banking app. Look for more ample opportunities, and do not limit your banking mobile app to local mobile banking app developers as you can partner with development teams worldwide.

4. User-Friendly UI/UX

Providing seamless user experience and intuitive design defines the success of your mobile banking application development. An attractive design is responsible for drawing customer attention, a user-friendly interface makes them stay, so one should keep these two elements in balance.

Choosing between entertainment and respectability in your mobile banking app development interface, note that banking platforms shouldn’t be overly fun rather not dull. An extremely standard interface that looks like a spreadsheet won’t gain users’ attention or desire to use your platform. Nonetheless, your app still needs to appear reliable

How to create a banking app that provides an excellent user experience? Read below.

  • Making an app fast will warranty your platform extra win points from users. When we talk about making payments or getting information about accounts, there are no people who like slow software. It helps if you choose only necessary features, optimize your app speed, and make it lightweight.
  • Syncing an app with your website helps set up a single system with transactions data or recent account changes reflected everywhere within this system.
  • Guiding users through your platform will allow not only tech-savvy Millennials or Gen Zers but all generations to use it. It helps create a banking app for a very diverse audience making every person comfortable with your digital banking solution.

While planning an app’s design, you should consider structure clarity, functional accessibility, and correspondence to your brand identity.

5. Secure Bank APIs

A reliable bank application programming interface (API) is a must-have for any banking app development option. If you create a banking app for an existing bank, API gives you access to the bank system and account management. Secure APIs support smooth and functional bank software performance to create a banking app.

6. Advanced Data Protection

Data security should be additionally stressed while talking about mobile banking application development. Make sure your platform corresponds to the security guidelines of the distribution region. Applying additional data protection measures keeps personal and sensitive user data safe and secure. Data security and data privacy cover, including but not limited to:

  • Safe app entrance (two-factor authorization, using biometry, reliable user passwords)
  • Data encryption
  • Secure info storing (reliable servers, avoiding storing sensitive data on the user device)
  • Automatic log-out in case of inactivity for a certain period.

7. Right Monetization Model

Choosing the right monetization model is a step towards your online banking app’s future success. The more suitable your monetization strategy is, the sooner your mobile banking application development will pay off. Business runners commonly choose between modes based on subscriptions, advertising, fee schedules, business cooperation, or API as a product. Each one has its benefits and drawbacks (which we will tackle later on). Consider your business objectives and target audience to understand which models suit your app better.

Apart from the issues listed above, it would be best to build a well-balanced relevant feature set for your iOS or Android banking app development.

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Vital Mobile Banking Application Features to Mind

Here, you will find out standard features to implement into your online banking app.

Speaking about must-have features, you should understand that their set differs from app to app, as mobile apps for banking strive to cover their target audience’s specific needs. The most common iOS or Android banking app development features include:

1. User Profile

A user profile should contain private customer data (necessary for an app) to reuse while making payments. Think of how to create a banking application in Android or iOS with some additional settings, like saved payment scenarios, priorities, special offers.

2. Instant Transactions

Quick and easy transactions play a leading part in proper banking app development. Make sure your app provides the necessary tools and has an intuitive interface.

3. Advanced Security Measures

Think over how to build a banking app using security best practices. For example, you can offer a secure log-in system with biometry or two-factor authentication.

4. User Notifications

Keep users informed about their online bank account app activity by customized push-notifications. It helps in user engagement and building banking app loyalty.

5. Offline Mode Support

While mobile banking application development, think of making your app trendy with offline mode support. Ensure users have access to necessary info even without an Internet connection.

6. Peer-to-Peer Transfers

Developing a mobile banking application will require implementing card-to-card transactions between various financial institutions to increase user acquisition.

7. Support Chat

Proper support is vital in emergency cases. What’s more, you can enhance your banking apps development, for instance, by utilizing an AI-based support chat.

You can also add some extra features to help you make your banking mobile app even more personalized to meet your customers’ specific needs, driving in more sales.

Advanced Features

Extra features are meant to help your platform stand out. This means you can conduct mobile banking application development without them or add them later when core functionality will be ready. However, implementing those elements would improve the user experience within your platform and help better market an app.

1. Cashback Service

This reward program means that users receive a specific percentage of their spendings back. While running mobile banking application development, consider various cashback options like choosing a reward category (groceries, cafes or restaurants, traveling, car maintenance, and so on) or a higher cashback percentage connected to spending amounts. On top of that, you can create a banking app cashback system as a part of a loyalty program where the consumer gets a higher rewards percentage after a specific time of using your platform.

The Insider Intelligence’s cashback report shows the value of different reward program options. It claims that 44% would prefer the highest cashback on the top purchase category, whereas 48% of users would opt for double cash back at the end of the first year.

2. Bill Splitting

How to build a mobile banking app that solves the age-old problem of sharing an account with colleagues or friends? For example, this handy tool allows users to split the bill while they are at the restaurant and pay for it together in real-time. Similarly, they can split group gifts, trips, entertainment costs, or any other group occasions .

Some applications focus on this tool building the platform around this idea, but you can consider this feature as the standout element for your mobile banking application development. Market research for splittings apps claims that revenues of this niche will grow at CAGR of 8% during 2021-2024 years.

3. Spending Tracker

It is reasonable to concentrate on mobile banking application development for budgeting. Features allowing users to control how much and where they spend are amazingly popular. A significant role in embracing this idea play Millenials and Gen Z, as 34% of this group confessed to having at least one budgeting solution on their device.

It can be good to think of how to build a banking app budgeting system using smooth animations and various graphics. It will help track expenses, thus can bring your platform to the next level.

4. Cardless ATM Access

This mobile banking application development feature allows users to be able to withdraw cash without a card in hand. People can use QR codes or multiple-factor authentication to connect with ATMs.

It can help you engage clients on a deeper level as many people prefer this option, so they don’t have to carry their wallets on the street, especially in cities like New York. The senior vice president of Bank of America reveals that cardless use in their bank has risen to 25% in the first quarter of 2021.

5. Speech Recognition

Business owners often think about how to make a banking app that will attract more attention. Voice recognition is a highly trendy option amongst top-notch software solutions. This tool lets people do many in-app operations hands-free. Adding voice recognition while developing a banking application can help you have an excellent competitive advantage.

6. Custom Alerts

Implementing the possibility for custom alerts while building a banking application allows users to set up notifications according to their desired criteria. For example, users can set alerts to pop up upon reaching particular expense limits or specific types of transactions.

7. ATM Map

Banking application developers may add a geolocation option that helps users find the nearest ATMs or bank branches. This option can include real-time data about cash availability, currency exchange rates, hours of operations, and so on. Ideally, it is better to build an Android banking app or iOS with an interactive map that guides users turn-by-turn to the desired ATM or bank office.

8. Connection with Wearables

Recently users of smartwatches can utilize them instead of a smartphone in many cases. Building a banking application with such a feature is a step towards the future. The wearables market is projected to grow by 19.48% during the 2021 – 2026 period.

The Australian Bank of Melbourne knows how to create a banking application with such a tool as they were the first who made it. Their mobile banking app developers implemented the ability to check balance, find ATMs, receive alerts, and pay for goods or services.

Based on what we have mentioned above you can decide your banking app development functionality. And now that you’ve figured out the desired features, that’s the time to know how long and how much it may take you to create a banking app. Well, let’s see. For instance, a mid-sized offshore banking app development company will make an app in three-six months at a rough rate of $40-100/hour. After doing simple math, an average banking app development cost may range from $60,000 to $120,000 (though it may exceed these numbers, depending on many inputs).

Now, when you know the approximate time and cost of developing a banking app, you can improve your business strategy.

Examples of Successful Digital Banking Apps

Let’s take a look at mobile apps for banking that are taking off.

To make the info more representative, let us show several examples of banking apps that are booming now in FinTech:

1. Ally Bank

Ally Bank, a renowned banking mobile app development project for user account management, offers its users extensive functionality. It includes paying bills, transaction history, ATM map/search, deposits management, and high-yield competitive savings accounts. Ally Bank is a great example of how to build a banking app that supports using biometric authorization (fingerprint ID) instead of a regular password. The app owes its popularity to higher rates and lower fees (compared to traditional financial institutions). Ally offers to review current stock market news within the app as a free bonus feature.

2. Bank of America

Bank of America, a trusted national bank, that knows how to make a banking app name out of a positive user experience. Like other traditional banks, it offers regular bank services with no risky rates on saving accounts promised. Bank of America bets on user data protection in its mobile banking application development: it tracks suspicious transactions and informs users about untypical actions. To use Bank of America as an online banking app, one should pay $14 per month.

3. Capital One

Capital One takes high positions among products of mobile banking application development due to its rich functional scope and competitive annual percentage yield (APY). The app offers a profound card management system so you can store, lock, or renew the card directly from your mobile banking application. Capital One also provides a beneficial reward points system for credit cards.

4. Huntington Bank

Huntington Bank is a simple option of mobile banking application development providing high-quality services to its users. The app was highly rated for its well-balanced look (user-friendly design, intuitive interface, accessibility) and content (provided services, information availability, functional scope). Like Bank of America, Huntington Bank tracks your in-app activity and (if settled) sends push notifications every time you perform a transaction.

5. Wells Fargo

Wells Fargo is another large example of a traditional bank that provides its services via an online banking app. This product of mobile application development for banking offers all the required functionality to manage private financial operations and allows users to waive fees if they have $1500 as a minimum daily balance or $500 as a deposit per month. Additionally, Wells Fargo supports biometric authentication (Face ID, Touch ID) to simplify online bank account app logging in.

6. Betterment

Betterment states that users don’t have to pay fees for using their own money. Therefore, it provides users with no fees per ATM transactions, foreign transactions worldwide, or overdraft fees which is a standout feature of this platform. Betterment doesn’t have limits for minimum balance which is a good idea for developing a banking application. It supports the FDIC insurance system to guarantee deposits safety up to 250,000 US dollars if an insured bank fails.

Users don’t have to go into branches to maintain account control; they can change their PINs or lock their cards through the application. Additionally, this product of mobile banking application development has cashback rewards at many renowned brands like Adidas, Walmart, Staples, and so on.

7. Chime

Chime is one more example of how to create a banking app for keeping users’ financial accounts in one entirely online application. Users can transfer money instantly to others in an easy way. It doesn’t have maintenance fees or monthly fees which is good to consider in modern mobile banking application development. The platform allows users to save extra cents each time they purchase through a debit card by rounding up the price to the next dollar and transferring it to a savings account.

Chime also allows people to track their account balance and daily transactions, sending notifications when they use a debit card.

8. Discover

Discover is a renowned product of mobile banking application development. The platform provides users with fast access through four digits code and allows them to view the information without the necessity to log in. This banking app development solution helps manage a deposit bank account or credit cards along with various essential tools ensuring 24/7 live support.

Discover is also a Federal Deposit Insurance Corporation agency member that guarantees deposit safety. However, to open a CD or money market account, users need at least 2,500 US dollars.

9. MySynchrony

MySynchrony helps manage various bank accounts or credit cards in one application. Users can expect high rates for savings and deposit accounts, which is a valuable benefit of building a banking app of such. Though, it doesn’t allow deposit cash and doesn’t have a checking account.

10. Chase

Chase is a well-known bank with a highly-rated free mobile app standing out thanks to its rewards credit cards system. Users can securely manage all their accounts within one platform, which is good to consider while mobile banking application development. Clients can make payments, deposit checks, track balances, receive, or send funds through Zelle service. Chase mobile banking app developers made it possible to use fingerprint or facial recognition to sign in.

Moreover, the platform allows in-app support 24/7, credit card rewards, and cash back services.

Despite the abundance of digital banking apps on the market, you can always change the situation by hitting it with your unique solution. After dwelling on those popular examples of mobile banking application development, let’s see how you can profit from creating a financial software solution.

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Best Online Banking App Monetization Strategies in a Nutshell

Finally, let's dive into the most popular monetization models to guarantee your mobile banking application commercial success.

Monetization concerns appear among key ones when one is looking for information about how to make a banking app their business. There exist five basic strategies that will help developing a mobile banking application profit strategy:

1. Subscriptions

A subscription plan stands among the most popular monetization options for mobile banking app development companies. Subscription presupposes users are paying money in advance to get access to a service for a certain period. As a rule, the customer pays fees once a month, quarter, or year. Think of developing a mobile banking application for customers who prefer subscription plans, as they are flexible, and you should not pay for the period you do not use the application.

2. Transaction Fees

Taking transaction fees stands as another popular way to monetize mobile banking application development. The platform itself is free-to-download and does not acquire any money for account management. However, the service takes fees for different money operations (money transferring, online payments, currency conversions, and others) a customer performs via it. The percentage varies from app to app, though usually, they do not go beyond 5% per regular transactions.

3. In-App Advertising

Consider an advertising model for your mobile banking application development as it makes a platform entirely free for users. Application runners receive profits for showcasing advertisements to users within their app. Ads may be implemented while banking app development as regular banners, media (image, audio, video), or interactive elements. In-app advertising strategy attracts more customers as service is stated as totally free. However, the retention rate is lower than in previous models because advertisements often appear irritating.

4. Business Collaboration

Business collaboration (while FinTech startups partner with renowned financial institutions) is a standard money-making practice. Via business collaboration, banking app development runners can establish mutually beneficial relationships without implementing third-party advertisements or charging fees.

5. API as a Product

Using API stands as the most cost- and time-effective way to access required functionality. Without going too technical, using API, customers send requests to certain company services; the services react with a response; customers receive relevant information. API is widely used while mobile banking application development to perform payments, transfer money, whatsoever. Banks may charge fees by providing their API, though the model is not relevant for European banks, as they have to give free access to their APIs.

Being at their rise, mobile banking application development for banks show no signs of slowing down. Despite the existing solutions, you may always offer customers an alternative that they fall in love with (and boost your business, for sure).

Win the Race with Your Custom Mobile Banking Application

Banking apps development is a hot-take now. More and more financial institutions (even large ones and with a long history) switch to advanced FinTech solutions, making traditional banks a thing of the past. When you doubt yourself, your competitors already pick a winning ticket. If you want to win the race, then don’t lose your chance and start custom mobile banking application development right away!

OpenGeeksLab always focuses on safety-first digital banking apps to ensure that the users’ data are safeguarded under every condition.

Our experts have vast experience in how to make banking apps providing advanced FinTech solutions. We can’t uncover the details as these projects fall under NDA. But be sure if you plan banking app development, we can guide you down the winding road. Do not hesitate to contact us to create a banking app from your boldest dreams.

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