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How to Build a Mobile Banking App: Making No Mistakes

Blog: Think Data Analytics Blog

Mobile banking applications are gaining massive popularity by offering financial services on the go. According to Statista, the number of active online banking services users reached 1.9 billion in 2020 and is projected to exceed 2.5 billion by 2024.  It’s an opportunity to manage the bank account remotely and 24/7 access that stands behind the mobile banking success. In this regard, creating a banking app is the primary condition for financial institutions to survive in the current digital  age.

Keep reading to know how to develop a banking platform, its benefits, pitfalls, and essential features to implement.

Advantages of Banking App Development

Banking app development brings a lot of benefits both for customers and banks:

Let’s consider the core advantages for business.

Visit here: Top Mobile App Development Companies

Reduced Costs

Mobile applications save financial institutions a lot of money in the following way:

For instance, mobile transactions are cheaper than ATM and branch ones. Clients are charged 0.08 cents per mobile transaction against 0.85 cents for an ATM one and $4.00 for a branch transaction.

High Return on Investment (ROI)

The final app development cost varies depending on the complexity of the features, type of platform, design, 3rd party integrations, and developers rates. However, the fact remains that you’ll need to invest a pretty penny to build a mobile application for your bank, especially if you decide to outsource software development to such countries as the US or Australia. 

Indeed, banks intend to return the investments. But how can mobile banking cover all these expenses? Customers make daily transactions and become more involved. 

Bank of Ann Arbor, a US-based billion community bank, managed to return the investment into a mobile solution. Within three months of implementing mobile banking, they noticed:

There was also a growth in customer loyalty. According to the Ann Arbor bank survey, mobile banking clients were 2 points less likely to leave the bank than online banking clients. And 8 points less likely — than branch-only customers.

Improved Customer Experience

Not all financial establishments require a banking app development. Some of them can make the most out of chatbots, web, or desktop applications. But, mobile apps provide more opportunities to customers. They’re more user-friendly and secure: users can’t apply fingerprint login with a chatbot or always keep a PC close at hand. In fact, one-third of customers said that mobile experience is why they continue to be serviced by their current bank.

Additional Marketing Channel

Banking app development is also a powerful channel for banks to distribute their services. Whether you’re planning to present a new insurance package, expanded credit limit, or new in-app functionality, you can inform clients about it right in the application using push notifications, direct messages, or a personal dashboard.

Main Сhallenges in Building Banking Apps

Despite the advantages for users and businesses, mobile banking app development has some pitfalls you should be ready to deal with. Strict security requirements are discouraging entrepreneurs from getting into this niche. For example, there is obligatory compliance with GDPR (Europe) or CCPA (California) regulations and thorough verifications of interactions with users. At the same time, the service has to remain easy to use for your clients.

Security

The banking industry is vulnerable to cyber attacks the most. The study claims that financial institutions lost about $18.37M in 2020 because of cyber threats. That’s why mobile banking applications must be integrated with many security features (e.g., end-to-end encryption, multi-factor authentication, safe back-end architecture, etc.).

For example, Revolut, a famous British banking platform, applies Transport Layer Security (TLS) protocol to guarantee personal data protection. TLS verifies everyone involved, checks the integrity of the information being transformed, and encrypts it at every stage.  

Card data in the Revolut app is stored according to strict PCI DSS requirements. There is a limit on contactless payments and many other security features to keep clients’ data safe.

Biometric login and two-factor authentication are crucial features for banking applications since all the financial operations (money transfer, purchases, etc.) should be tentatively confirmed by the user. 

Here are some preventive measure to make your app secure:

Regulations

Regulations, rules, and guidance applied, depending on the banks’ scope of activity. For instance, financial establishments that enable clients to access loans through mobile apps ensure that customers can access relevant disclosure requirements. That contains information like format, timing, content, and way of delivery.

Another example: banks that offer credit-related products are liable to the Fair Housing Act and are obliged to display the Equal Housing Lender logo and legend.

Well-known financial security regulations:

As you can see, there are various financial regulations to comply with. Thus, before initiating banking app development, check what standards are legitimate to your target country. If you intend to create a mobile-only banking app like Monobank or Revolut, it’s better to work with a financial consultant who’ll clarify all possible pitfalls.

Technical Side of Mobile Banking Apps

It’s time to consider the basic features needed to build a banking application. 

Account creation/sign-in

If you’re planning to create a mobile-only banking app, users should be able to upload documents, take a photo with their passports in their hands, and so on. In case clients have already visited a bank department and opened a bank account, they should be allowed to log in using their mobile number and a password reset option.

Account management 

This feature allows users to control their bank accounts, namely, check the card, view account balance and transaction history, and manage cards. The more operations customers can perform, the more intuitive UI/UX design should be.

Payments and transactions

Money transactions have to be secure and straightforward as it’s connected with processing sensitive data. Commonly, the users go through the following stages: 

Customers can confirm the transactions through biometric verification, obtained code, or password.

Bill payments

Mobile banking apps are convenient, especially for modern people. Instead of finding a time to pay bills offline or waiting in the long line, customers can schedule one-off or recurring payments in the application or pay when they’re informed by push notification.

Customer support

Even though banking app development implies that all financial operations are automated, it still requires human involvement. For instance, when a client wants to unblock the card or modify the credit card limit. Customers should be able to reach the personal manager to ask questions or get their requests processed. If your support team isn’t available around the clock, you can implement an AI-powered chatbot or FAQ section.

Push notifications

Push notifications are an excellent way to notify users about upcoming discounts, relevant offers, interest rate data, or paycheck getting to their accounts. Moreover, they’re applied for security purposes like detecting a fraud the minute it happens.

ATM locations

Consider adding an in-app map to help users locate the nearest ATM or bank branches. It’s beneficial when your customers need cash or want to pay your bank a visit.

QR code scanner

Not many banks provide QR codes for payments; however, it’s a great way to improve customer experience. QR payments are easy to integrate and secure due to their unique design. The only things users need are a smartphone with a camera and a downloaded QR code. 

Banking App Development Process

Now, let’s disclose the steps you should take to make a successful mobile banking platform.

Research

Start with market research to ensure you know who you’re going to build the app for. Here are some questions to ask yourself:

Without in-depth research, you won’t know what functionality to focus on. For example, your clients need a banking app just to pay a bill while you concentrate on debit or credit operations.

UI/UX Design

Users expect a clear and intuitive design interface with easy navigation. Unfortunately, the common problem of most banking apps is that customers face problems understanding the outdated designs. For example, people go crazy entering the payment details each time they want to send money to another user. They may also get disappointed when required to fill in an extensive form while paying household bills.

Here are some hints to deliver eye-catching design for banking apps:

For instance, Revolut applies colorful illustrations to introduce the application to new clients.

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