Step by Step Guide to Develop a Mobile Banking App
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The world is actively going online and mobile, as the 2021 statistics suggest. An average user utilizes up to nine apps every day and uses 30 various apps every month. Thus, most users have around 80 apps installed on their smartphones, using roughly one-third of that number.
With over 5.2 billion active smartphone users globally (as of 2021), the market niche for any mobile app is immense. One of the most popular app types is mobile banking, as all people come across the need to complete financial transactions of various kinds several times a day. Whether it’s a purchase of some products online or in physical stores, salary payment, or a transaction to a client or contractor, completing payments on the go with the help of a mobile app is much easier than more conservative ways (e.g., visiting the bank’s branch or using an ATM) are.
Due to their convenience and speed of transactions, mobile banking apps are quickly gaining momentum worldwide, along with other digital solutions like crypto banks and Neobanks. In 2021, mobile banking users were estimated to exceed 1 billion persons, which is a huge audience for any mobile banking provider. In the USA, over 70% of clients complete routine financial activities via apps only, and the rest of the world keeps pace with this trend.
Thus, you may expect the steady growth of mobile users’ interest in mobile banking apps in the coming years. What used to be a $1-billion industry in 2012 has already exceeded $3.8 billion in 2021.
The good news is that you can embrace and monetize the trend by developing your own mobile banking product and popularizing it among your target audience. Here the 4IRE team of mobile app development experts explains the process of mobile banking app construction step by step to show the market potential and appeal of this project for various FinTech businesses.
Learn more on how to build a P2P payment app
What is a mobile banking app?
In a nutshell, a mobile banking app is an application giving access to clients of financial institutions from the comfort of their smartphones. In this way, users utilize a mobile app enabling them to conduct online banking operations. As a rule, a mobile app possesses the complete set of features that clients can avail of in the brick-and-mortar banking offices, plus a set of innovative, online-only features and perks.
Financial operations are conducted via NEFT and RGTS pathways, enabling users to send and receive funds, check the balance of their accounts, and access various additional banking services in the app.
The most famous mobile banking apps include Capital One, Bank of America’s mobile app, and Varo (a mobile app for money management). Wells Fargo and Chime also offer functional and appealing apps and have millions of users. The most well-known mobile app in the EU is Revolut; it operates in 30+ countries and is currently used by 1.5+ million customers across Europe.
Mobile banking app dev trends
The market is ripe for mobile banking innovation as more and more users prefer flexible mobile solutions on the go to classical bank visits. For the past four years, the global statistics of clients’ visits to banks revealed a 30% reduction, while the global use of mobile banking rose by 33%. With an average of 88% of a user’s mobile time in apps, mobile banking has a serious advantage over physical points of banking service delivery.
As technology progresses, mobile banking apps quickly transform from mono-functional platforms to super-apps integrating numerous flexible solutions. Thus, banking institutions investing in the mobile banking app development sector strive to deliver all-in-one products that would win customer loyalty and enhance their position in this competitive market.
Some significant trends notable within the mobile banking niche lately include:
- Voice assistance and voice commands for making payments
- Customized and automated debt management solutions
- AI-powered customer service
- Removal of physical debit card use in cash withdrawals from ATMs
- Biometric authentication via a smartphone
- Delivery of vital banking statistics inside the app
- Cybersecurity solutions
- Edutainment (financial education, investing classes)
- Marketplace integration
With such convenience and versatility of services, mobile banking apps have all chances for sustainable growth and adoption by larger numbers of users worldwide. As of 2021, 73% of smartphone users already have at least one mobile banking app, which means that three-thirds of the global smartphone user population already utilizes this service. With many developing countries joining the trend today, mobile banking seems to have a bright future and all chances for further adoption by millions of more people in the next few years.
Pros of Mobile Banking Apps
Mobile banking is on the rise due to several significant benefits it offers compared to conservative banking methods. The most meaningful contributors to these apps’ adoption include:
- Cross-platform interoperability of the app, giving users a seamless experience of access their account and making transactions from a variety of devices
- Fast speed of transactions
- Convenience of transaction verification (with the smartphone’s fingerprint, mobile phone PIN, etc.)
- Personalized service with in-built chatbots or AI-powered consultants
- 24/7 service without restrictions of physical offices’ working hours
- Access to additional banking services like loans, investments, currency exchange, etc., in the app.
In a nutshell, mobile banking enables the completion of fast and flexible transactions anytime and anywhere, thus giving users the freedom and convenience they seek. The concept of convenient and customized online banking is consistent with the overall pace of the technological progress we observe today, directed at enhancing user convenience, minimizing the waste of time on transactions and interactions, and expanding the service range available at your fingertips.
Financial actors can also derive many benefits from launching mobile apps. First, they achieve greater geographical coverage by serving clients in areas where they don’t have physical offices. Second, they can manage higher throughput of transactions due to the automated nature of mobile banking. Third, greater automation comes with higher precision and concise data analytics, giving a better grasp of financial flows. Finally, the customer services cost reduction coming with mobile banking is a positive for banking institutions as it allows them to save funds on additional staff engagement, office rent, etc.
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Challenges they can solve
The convenience and flexibility of mobile banking apps have contributed to their greater adoption by businesses delivering financial services. Developing such an app suggests the company’s ability to give a convenient alternative to its current users, thus helping them solve several challenges associated with financial transactions:
All these gains serve as additional contributors to the more intense use of mobile banking services by businesses and individuals, driving the mobile banking development sector further.
Must-have app features
As soon as you plan the banking application development project, it’s time to consider the features and functions it should include. Here is the typical breakdown of the mandatory minimum for an effective banking app.
Advanced app features also include cardless access to cash in the ATMs, chatbots and voice assistance, customized alerts, and QR/barcode scanner integration.
How to Develop a Mobile Banking App?
If you’re interested in how to develop a mobile banking app like Revolut, here is a step-by-step guide to the development process the 4IRE team typically follows when approaching new projects.
Step 1. Field Research
The initial stage of work on any project is to study the market niche you wish to enter. The essence of banking apps development is to make your users’ lives easier (if you already provide financial services through traditional channels) or make a unique offer with innovative features and services (if you’re only entering the market). To achieve these goals, you need to know what services already exist and what needs they meet and fail to meet. This information will inform your USP and will attract new customers to your product.
Step 2. Prototype Creation
Next comes the prototype. It’s an MVP that showcases the planned design and functionality of your app. Once the prototype is ready, you can quickly correct flaws and bugs at the early stage of development, which is much more cost-effective than making adjustments at later phases.
Step 3. Front-End Development
The banking app’s UI is essential in product success on the market as users will adopt a user-friendly, helpful app with numerous valuable features readier. It’s key to achieving ease of use and intuitiveness in the app’s design, contributing to the app’s popularity. Besides, the unique brand identity and visual appearance play a role in achieving user adoption and loyalty.
Step 4. Tech Stack Selection
You also need to determine what technology you’ll use to develop the back-end part of the app. Software development can be done in various ways, so you need to choose the technologies and software for your project. It will determine the project’s cost and deadline, affecting the ease of finding a development company with the required expertise.
Step 5. QA Testing
Once the app is coded, it’s time to check it for vulnerabilities and bugs. You need to engage a team of quality testers who will run the app in various conditions, try all features, and subject it to pressure tests. In the process of QA testing, many flaws and problems may surface, so you need to eliminate all of them before your product enters the market. Launching a flawed product can cause reputational problems and drive the target users away from your app.
Step 6. Market Launch
After troubleshooting and bug elimination, you need to proceed to a market launch. It’s better to accompany the launch with a marketing campaign to boost your product’s publicity and increase its adoption. This step is the most important one in the app development process as it determines whether your app will fail or fly.
Step 7. Maintenance
The app’s launch to the market is not the final stage of product development. You’ll need to support its flawless functioning and issue regular updates to enhance security and improve user experiences. Thus, the work on your app turns into a lifelong process, with users enjoying better UI, robust safety measures, and additional features.
Security is getting increasingly important today as hackers prey on vulnerable financial systems and hack them, stealing all user funds. Thus, the task of mobile banking app developers is to integrate robust security features into the app they create, including the KYC compliance procedure, proof of address (POA) documentation requirements, user instructions for strong password creation, and two-factor authentication. Advanced security measures may include biometric authentication and blocking of transactions to suspicious channels for fraud prevention.
It is impossible to give exact figures as every app is unique. A mobile app development team to which you’ll turn with this project can calculate the price based on the project’s urgency, the complexity of features, the tech stack required from developers, the number of human resources involved, etc. API integration is another aspect affecting the price significantly. So, you’ll find the final quote from a development company based on your individual requirements and needs.
Mobile banking has a bright future because it’s a rapidly developing technology enjoying broad adoption today. With hundreds of thousands of new mobile phone users every year, it has many prospects in developed and developing countries. Thus, there is much potential for innovative FinTech solutions like Neobanks or cryptobanks, which users eagerly explore today.