How to Create a Banking App: A Comprehensive Guide

Benefits of Banking Apps for Your Business

Your company will gain a lot of advantages from a well-designed mobile banking app, helping you to stand out among other financial institutions. Find the key perks of mobile banking application development below.

Lower customer service costs

Mobile apps increase a bank’s overall efficiency in various ways by:

• Helping go paperless
• Saving money on printing and delivery
• Implementing multi-factor authentication
• Eliminating the need to hire additional workers
• Offering cheaper transactions

Research by Deloitte suggests that the cost of mobile transactions could eventually be 50 times lower than branch transactions and 10 times lower than ATM transactions, presenting a significant opportunity for businesses to reduce operating spending while increasing revenue.

Easier communication with customers

Before business banking apps, companies used SMS to communicate with customers. However, sending millions of these messages is extremely costly and not very user-friendly. CEOs and heads of accounting are overwhelmed with spam and too busy to read or even open SMS.

A business banking app with push and in-app notification features resolves this issue. According to Invesp, push notifications can ramp up app engagement by 88%. Messages delivered through the app, which CEOs download themselves, are more relevant and less intrusive, helping businesses retain their customers and keep them well-informed.

Significant return on investment (ROI)

Customers who use mobile banking apps typically have more products with their bank, indicating a higher level of engagement with the bank’s services. Research from the ABA Banking Journal found that having instant access to financial information encourages more transactions. As a result, mobile banking users generate 66% more revenue compared to branch-only customers.

Gathering customer analytics

Having a mobile app makes it easier to gather and analyze important data for measuring and improving your services. You can track metrics like active user numbers, session lengths, retention rates, abandonment rates, and churn rates to understand how engaged and satisfied users are.

Additionally, acquisition metrics help banks monitor download numbers and user sources, helping to identify effective marketing strategies, while performance metrics are important for pinpointing the reasons behind abandonment rates.

Step-by-Step Banking App Development Guide

Mobile application development for banking requires more attention to security than when creating any other digital product. Below are the seven stages explaining how to build a banking app. Take a look at them.

1. Conducting Research

So, how to create a banking app? Before beginning the creation of the mobile banking app, it is crucial to conduct market research to identify the market’s leaders and outsiders and their strengths and limitations. It aids you in creating a list of requirements for your application that will benefit all parties involved going ahead.

To maximize this phase, you can employ SWOT analysis to determine and evaluate the project’s strengths and weaknesses, opportunities, and potential threats. Opportunities allow a project to gain new clients, introduce new technology, or reorganize company operations. In contrast, threats can harm the project and deprive it of its current advantages, such as the emergence of new rivals and substitute goods.

2. Prototyping

The number of interactions is critical to the product’s success. One of them is creating a prototype. Consider the prototype as a more streamlined form of the finished item. It should contain app structure, logic, and design. The prototype is still far from the finished item regarding usefulness, stability, and aesthetics.

A prototype enables you to test your hypothesis. Simply deliver it to users, get their feedback, determine what works and doesn’t, and make the necessary improvements. Building a prototype is the best way to test the banking app’s functionalities, usability, and design.

3. Establishing security

You should know that developing mobile banking software is about handling sensitive user data. Here is the security base you should be aware of before the development begins: secure authentication, secure card information, secure password, auto-logout, and data privacy.

Compared to other types of applications, banking software must adhere to a much longer set of security regulations, such as GDPR, PSD2, PCI DSS, CCPA, etc. It’s critical to check that the intended functionality conforms with all of these guidelines before beginning development on a product. Hiring an experienced development team will help you to ensure proper compliance.

4. Designing UI and UX

Designing a mobile banking application enables showing clients a minimally functional product version before implementing business logic and functions. The design team starts working using the data we acquired during the research stage, user interviews, and comments on the prototype.

A user-friendly UI layout is one of the advantages of the mobile app. That is why you need to ensure a straightforward, understandable, and welcoming design. Mobile banking applications must support web accessibility, which is governed by the law in some nations. Most banking app design best practices are based on the WCAG 2.0 guidelines.

5. Developing and integrating the app

At the beginning of the development phase, engineers choose a tech stack, considering the client’s business objectives and budget. The functionality of the application and the mobile OS of choice will determine which software tools developers use. For example, how to create a banking application in Android? If you’re making a banking app for Android or iOS, it is better to opt for Native app development as it is safer.

After the final approval, developers start implementing the app’s functionality, testing it often when they finish each development phase. There is one more thing to complete before a mobile banking app can be released, and that is third-party integration. Using third-party services improves an app’s usability and maximizes client attention.

6. Marketing and releasing

Before the scheduled release, you should perform extensive marketing and advertising campaigns to attract as many people as possible and gather sufficient feedback. You can carry out the campaign with the aid of well-known journalists and bloggers, search advertising, email distribution, and via social media. Marketing is an obligatory expense in your budget.

After successful integrations and testing, the product is released under developers’ guidance to ensure that any arising issues are fixed quickly. Depending on the OS for which they were developed, public programs are uploaded to Google Play and the App Store.

7. Maintaining and updating

It is crucial to remember that expenses continue after the application is made available to the general public. For example, you will occasionally need to pay for server space, support for specific technologies, integration with payment gateways, etc.

As users interact with your app, new needs arise, and you must add new features. So be prepared for a potential change to your original mobile banking app. You can enhance the app with new features as the client’s business expands and market demands change. You can learn which app components can be optimized using new market research. So, think of the entire software development process as a cycle.

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The Best Banking App Features to Implement Into Your Project

In this section, we will highlight the core features required for all mobile banking apps and several extras that will set your app apart from the competition. Let’s start with the standard set for mobile banking application development.

Bank account management

Managing accounts is a must-to-have-feature of any mobile banking app. Debit and credit card monitoring, checking account balances, viewing transaction history, and smooth money transfers between accounts should all be possible through the app. To help your clients achieve saving goals, you may go one step further and automate the transfer of tiny sums into consumer savings accounts.

Payment and transaction management

Viewing the balance, sending one-time and regular payments, displaying the transaction history, and other features are all part of this functionality. Make sure your mobile banking software includes capabilities for safe and efficient transactions. Peer-to-peer payments should be simple to use. It’s a good idea to enable scanning QR codes to finish transactions, depositing checks with a photo, and exchanging currencies without visiting a branch office.

Authorization and identification

Whenever sensitive information is involved, clients demand and anticipate a high level of security. To securely protect your clients’ banking information, include speedy authentication features while giving people a sense of security. For instance, you can offer your consumers multi-factor authentication as an option.

Compared to static passwords and single-factor authentication, multi-factor authentication offers more security. It specifically enables banks to follow industry rules. Alternately, use biometric authentication technology, which instantly confirms a person’s identity using their voice, face, or other physical characteristics.

Customer support

In the modern world, you must offer your clients round-the-clock customer service. People want their financial issues to be resolved as soon as possible. In addition to 24/7 contact centers and chat options, consider including intelligent chatbots in your mobile banking application. They can quickly respond to straightforward questions, saving your managers’ time while delivering outstanding customer service with a high level of personalization.

Push notifications

As the app is not always open on the user’s device, you need to incorporate push notifications to provide urgent and recurring alerts about transactions, updates, etc. Push notifications inform users and offer a positive user experience. So, ensure your solution can deliver notifications for account updates, transaction confirmations, and other pertinent events. Additionally, you can add alerts of potential client account fraud to your current security system.

Geolocation

Most bank-provided mobile services include geolocation API integration, which enables users to find ATMs, terminals, and bank branches nearby. You must include ATM and branch office locator features to make your client’s life easier and have your app remembered as an efficient solution. It should highlight the services offered at nearby locations, the hours of operation, and the best routes there.

Personalization

It is an excellent idea to allow users to customize the application’s theme, avatar, and other options. Additionally, customers prefer and are more likely to interact with personally designed experiences. Consider including tailored services in your mobile banking app, such as discounts, ticket sales, vehicle booking services, and reservations for restaurants and hotels, to meet customer needs for personalized recommendations and stand out from the competition.

Integration with wearables

Wearable technology and other smart devices are gaining popularity on a global scale. It will be beneficial to transfer some of the application’s features to wearable gadgets. In the era of smartwatches, your mobile banking app should be able to interface with wearables and provide a seamless user experience through alerts, balance checks, and payment options.

Investments

Depending on whether your bank accepts investment activities, you also want to consider including these features in the mobile app. According to Statista’s research, young Americans show significantly more interest in learning about investing compared to older generations. Among respondents born between 1997 and 2002, 79% indicated they were somewhat or very interested. Allow your customers to buy gold and silver, manage their stock portfolio, or trade cryptocurrency. As long as you offer things that your clients use and genuinely value, the possibilities are endless.

Difficulties You Can Encounter During Banking App Development Process

Now that you know the core and nice-to-have features for developing banking applications, it is time to discuss some of the challenges you can face and how to handle them.

Regulatory compliance

Your banking app should comply with Know Your Customer (KYC) requirements and all applicable legal requirements set forth by the relevant authorities. Your financial institution must adhere to several regulations depending on where it operates. PCI DSS, CCPA, GDPR, PSD2, and SEPA are the most popular.

There may be more or fewer rules for your online banking application to follow, depending on where you do business. An experienced legal and software development team will help you to double-check all the regulations and ensure that your app complies with all relevant regulatory requirements.

Security concerns

Your main objective is to earn your customers’ trust in the security of your mobile banking app. It is a challenge for financial organizations wanting to develop a system that will be used to its fullest potential. You should think about the following to reassure users that their personal information is secure:

• Incorporating encryption systems
• Urging clients to create secure passwords
• Implementing multi-factor authentication
• Complying with security certifications
• Setting up data storage infrastructure with numerous security measures
• Including inactivity timers for automatic logouts
• Blocking payments to prevent money laundering

These security precautions will not only boost the safety of your mobile banking app but also raise consumers’ trust in your service. Therefore, don’t hesitate to inform them about your measures to protect their accounts and data.

User-friendliness

An unclear user interface and challenging navigation make managing finances, which is already stressful, even more difficult. Not just seasoned smartphone users but also individuals who have trouble learning new interfaces will use your app. User-friendliness is, therefore, crucial and something you shouldn’t skimp on. Experienced UI/UX designers will ensure that all parts of your solution have clear element visibility and simple navigation logic.

Banking App Trends to Follow in 2024

You’ve already gained insight into the benefits, challenges, and steps involved in creating an exceptional banking app. Now, let’s explore trending strategies to develop not just a quality product, but one that will deeply resonate with your customers.

Personalized financial insights

The FinTech industry is going through changes, and businesses that handle this transition well are expected to grow larger, more profitable, and faster, potentially unlocking a value-creation opportunity of up to $20 trillion, as per McKinsey research.

One major trend dictating the future of mobile banking is the growing popularity of personalized services, prompting businesses to use Big Data for analyzing information from mobile records and social media.

This data analysis allows banks to provide tailored financial guidance based on factors like spending patterns, credit history, and personal objectives. For instance, apps can send alerts to users if their account balance won’t cover anticipated expenses in the coming days, assisting them in making informed financial choices.

Crypto integration

Cryptocurrency’s reputation is getting stronger in the banking sector, and the market is growing fast with over 8,800 active digital currencies currently in circulation, attracting more and more new users.

With over two billion people worldwide using online banking services, going mobile is a must for any bank or other financial institution. A well-designed mobile banking app will help you to stay ahead of the competition, boost customer value, improve communications, increase revenue, and cut service costs. Despite the difficulties of developing a mobile banking app, a skilled vendor will help you overcome them and create a user-friendly next-generation app.

AI-driven fraud detection

Given that 95% of cybersecurity breaches result from human error, it’s risky for banks to rely only on traditional methods like manual transaction monitoring and rule-based systems, as this dependence puts them at a disadvantage against sophisticated financial fraudsters. AI-driven fraud detection provides banks with more effective tools to combat fraud.

AI-powered systems continuously use machine learning algorithms to learn and adapt to new fraud patterns, detecting suspicious transactions instantly. These systems also use behavioral biometrics, predictive analytics, and anomaly detection to authenticate users, identify unauthorized access attempts, and uncover fraud schemes like account takeover and identity theft.

Omnichannel banking experiences

Last but not least trend to consider is omnichannel banking, which provides customers with a seamless experience across various channels such as mobile apps, in-person visits, phone calls, emails, and video chats.

Research conducted by Forrester revealed that 38% of customers expect service agents to recall their past interactions, and omnichannel banking is the optimal solution to meet this expectation. By integrating all customer touchpoints, support agents can access a customer’s history regardless of how they’ve interacted previously, improving support efficiency and leading to increased customer satisfaction and stronger long-term relationships.

Choose Inoxoft for Expert Mobile Banking App Development

Inoxoft is an international software development company and certified partner specializing in banking software development services. We know how to create a mobile banking app and implement innovative ideas under the expertise of the world’s finest software developers.

If you want to increase customer satisfaction, automate procedures, and ensure security as you scale, we know how to help. Here are some insights into our case studies for you to learn more about our work.

Case Study: Trading automatization mobile app

A British group of stock traders engaged Inoxoft to develop an app to automate laborious tasks using algorithms to optimize data. Inoxoft has built a web application that eliminated manual labor, generated automated spreadsheets with information on optimal exchange rates, and gathered all generated orders for lucrative purchases by a predetermined financial plan.

Case Study: Integrating online payment services with CBS

Inoxoft is a pioneer in integrating online payment services with enterprise software for businesses of all sizes. We adopt ‘PayPal-like’ online payment services to your company’s requirements to accelerate the procedures associated with financial transactions. We add value to your business by updating and modernizing it.

Conclusion

With over two billion people using online banking worldwide, banks and financial institutions don’t just should but must go mobile. A good mobile banking app can help you stay ahead by improving customer satisfaction, communication, and revenue, and cutting service costs.

Though building such an app can be tough, working with a skilled vendor can help overcome challenges and create user-friendly, next-generation applications. If you are thinking about how to start a banking app, contact us to discuss your solution and get an estimate.