What is the most efficient strategy to establish a neobank?
Working with money necessitates a ton of paperwork, since it entails a significant deal of responsibility and is governed by a plethora of laws and regulations. Your accountability is determined by the stack you use to establish your bank. There are two options, both of which are viable financial business models.
Mobile Banking App Development Technology Stack
1. Platform neobanks:
Full-stack neobanks are built using a platform model. They have:
- A banking license
- Control over the full value chain, from front to back end
- Their own core banking system (CBS)
- Gained customer insights from clean data
- Offered personalized services based on customer insight
2. Front-end-focused neobanks:
- Do not have a banking license
- Form partnerships with much larger and established banks
- Core banking system (CBS) uses off-the-shelf or third-party technology
- Only control customer interface (front end of value chain)
- Apps for both B2C and B2B are supported
- Niche segment targeting (millennials, SMBs, entrepreneurs)
First Things First: Find an Issuing Bank
In each of these scenarios, your initial step is to locate an issuing bank with which you may later collaborate based on the characteristics of your stack. There's a distinction after that.
If you want to build a full-stack neobank on a platform model, the most crucial item to consider is whether or not you need a banking license. You'll definitely need it because you'll be giving your consumers with a full-cycle banking service that includes a lot of data and sensitive personal information. It should be safe, secure, and compliant at all times. If you keep card data on your servers, you must comply with the PCI DSS, which is doable but difficult and time-consuming to achieve.
This stack necessitates a larger staff and more expensive systems. You can utilize a front-end-focused neobank stack to test the fintech neobank notion without being licensed. Your product will be a cross-functional B2B or B2C application that may also deliver banking operation services to your target audience and consumers for your issuing bank, as in the prior scenario. In this situation, however, you do not seek for certification; instead, you just select a trustworthy payment platform that is already PCI DSS compliant. You have the option of relying on one of numerous leading platforms. The key benefits of outsourcing this job are that these platforms allow you to reduce the time it takes for your idea to reach market. PCI DSS compliance is already built into these systems. With this architecture, your major responsibility will finally be to do thorough market research and then design the neobank application.
Challenges of Banking App Development
Safety and Security
You've likely heard of Know Your Customer (KYC) – financial institution requirements that reduce the project's and customers' exposure to criminal activity. It verifies a customer's identification, assesses the danger of consumers laundering money, and assesses the type of financial transactions to guarantee that the source is authentic. While the information provided by your consumers is your most valuable asset, it is still sensitive information. It might be a strong trust-builder or checkpoint according on how you interact with it. A KYC provider enables you to address a critical issue.
You can know the flow of all of your customers' life cycle phases if you combine onboarding, KYC, and CRM from the start. Every aspect of their persona is trackable and analyzed. KYC providers often have ample space, and several firms can provide KYC in the majority of cities internationally at a low cost and with high reliability.
Flexibility and Adaptability
API allows you to integrate your own application with other existing goods or services without having to learn their code or pay additional money. An API aggregator, for example, allows a single implementation point to work with many payment systems at the same time. The notion of API aggregators arose as a result of open banking development, and API aggregators have already made a substantial difference in the flow of digital banking technology, even in its early phases. The capacity to exchange data about clients among linked financial firms is the key benefit. Not just digital banks, but all banks, grow even faster as a result of this.
When your client is already on the route to establishing a neobank, keep in mind that automation and digitalization are simply tools for making the ultimate customer's experience easier. A good product is the most important value your organization delivers to your customers. The key benefits that this product provides to end customers are safety, convenience, and speed. Trust is delicate and should be protected at all times. Be their dependable partner, create it as if it were the most significant project in your portfolio, test it as if you were the toughest QA ever, and release it to make an impact on the market.
Digital Banking App Features
Before you begin the process of designing a banking app, you must first establish the app's primary features. In this part, we'll go through a list of fundamental and optional features that you'll need to include in your mobile banking app.
- Create a profile and sign up
- Expenses and Payments
- Transactions History
- Map of Branches and ATMs
Let's look at ways to improve the usability of a mobile banking app.
1. Profile Creation and Signing Up
This section is critical to mobile banking. This is due to the fact that security measures for authentication (passwords, biometric scanning, and other difficulties, among others) may be included in it.
There is an exception to our usual rule of avoiding adding too many fields with questions during the "register" step. You must ensure that your clients' personal information is kept private. Additional questions may be useful in this regard.
During registration, clients should complete the 'complicated' password, connection to the phone number or email, personal security questions, and agreement with the Confidentiality Policy and other banking conditions they accept by creating personal data.
2. Customer Onboarding
Onboarding new users is a crucial step in ensuring your app's success. When developing an onboarding screen, there are several elements to consider in order to make the process genuinely helpful to consumers.
A good onboarding screen should include the following characteristics:
- Long user tutorials should be avoided. The tutorial's purpose is to explain why the user requires the program.
- Bring the consumer up to speed gradually, and don't expect them to recall everything right once.
- Use UI suggestions to guide new users through the app. Such indications should be presented to the user at the precise moment when they are required.
- While keeping the application screen visible, highlight essential portions of the program. Users will be able to quickly locate the functionality they require in this manner.
During the onboarding process, use as few displays as possible to demonstrate the app's value and major benefits.
3. Payments and Expenses
Fintech applications are mostly used to conduct financial transactions. As a result, this function should be given a lot of weight. We propose adding payments for the following products in addition to performing transactions between any card, bank, and account:
- Fines and taxes
- Loans and credits
- Public Service; Travel and transportation (bus, train, airline ticket, hotel or Airbnb booking)
- Games and in-game purchases
- Making donations
It will also be more handy for a modern user if they receive regular payment reminders. This might be a reminder of a monthly payment on a loan or a reminder of a recurring payment for mobile services.
The Transactions page is the most important component of your app since it allows your customers to track their payments and transactions when they first started using your software.
In addition, the transaction feature should be well-organized and incorporate the following:
- Recipient (name of individual or organization + card / account number);
- Transaction currency and transaction amount
- The date and time of the transaction; the geolocation of the transaction.
- The daily, weekly, and monthly spending filters are another useful aspect of your transferring money program.
These categories can be classified in a variety of ways, such by class (food, medical services, travel, gaming), date, amount of money (up to $50, $100, more than $250, etc.), and so on.
5. ATMs and Branches
Although an ATM and branch map may appear to be a pretty simple function, it is one that should not be overlooked. The minor things indicate that you care about your customers. It will be a valuable addition to your customer service. Your app's users may access an interactive map at any moment and discover the closest ATM or bank branch. Furthermore, by incorporating new technology into your app to make it more engaging, you may accomplish some fantastic outcomes.
You can also make it more fun by including your user in a fun game in exchange for cashback. "Withdraw money from an ATM on street X" or "Get a new card at branch X" are two examples.
Additionally, you may add a function that allows your users to utilize the program to queue at a bank branch.
6. Customer Support
The key to your company's success is to provide the most individualized service to your customers. You must ensure that your clients have access to technical assistance 24 hours a day, seven days a week, and that they may receive expert counsel or guidance whenever they require it. We're confident that creating a fantastic customer service system is one of the most effective strategies to become the bank that consumers like and want to be a part of.
Here are a few crucial points to consider in order to make your clients' assistance as simple as possible:
- Make it simple to locate help. A user is already at a loss when he contacts technical help. He attempts to grasp a service or program in most circumstances, but he is unable to do so intuitively. When a user requires assistance, he looks for a connection to technical help as quickly as possible. And if he can't locate a way to contact technical support within 5-10 seconds, the user is likely to abandon the site.
- Keep track of your interactions with each individual. Support is now more akin to a chat with a buddy or acquaintance. The client may connect with technical support in the app just as in a standard messenger: you type a message, shut the chat, get a notice when a reply to an email arrives, read it, respond to it, and so on. All of this is only feasible if the conversation's context and all customer information are retained.
- Check to see whether the FAQ or knowledge base is indeed helpful to users. Within 5 minutes, the majority of consumers attempt to address difficulties utilizing internet services on their own. There are knowledge bases and lists of the most frequently asked questions with answers available to help with this. Examine the most common technical support questions and rule out any likely reasons.
- Make use of your understanding of user behavior. Collecting data about the user in the app allows you to track when they are having problems and give him a trigger message with a helpful offer at the right moment. It's important to remember that certain functions are highly sophisticated and can't be made more intuitive. You can send trigger hint messages at the appropriate moment in this situation.
Users who receive mobile alerts are 9.6 times more likely to make in-app purchases. Furthermore, users who receive push alerts spend 16 percent more time inside the app than those who do not. Customers can acquire critical in-the-moment information with the use of smartphone alerts, such as:
Real-time information on payments and spending; recurrent or scheduled payment reminders; what's new in app updates and marketing messages
Push alerts can assist your money transfer software increase client engagement and deepen the connection. An good alert approach can also help your app become the customer's preferred financial services app. However, all it takes is one inaccurate message to turn a consumer off for good. Your customer should understand why they've been approached right away, and service provider messaging should encourage them to take good action.
Push alerts can become smarter when combined with account aggregation technology, utilizing a user's financial habits. As a result, your remittance software's existing alerts and notifications function may be transformed from a reactive, event-driven service to a proactive personal financial management tool.
1. Payments Through QR Codes
When compared to other payment options, QR codes provide a number of advantages. For starters, they eliminate the need to carry cash and credit cards. The payment application has all of the information needed for the transaction.
It will take more than one day to implement such a function. To achieve a straightforward flow with minimal steps and maximum advantages, it is vital to work out the step-by-step positioning of application screens for both users and merchants, as well as to work closely with the backend and UI/UX specialists. The added features, however, justify the expenses.
2. Trading and Investments
Investments and trading are becoming increasingly popular in the fintech business. Allowing your clients to do so using your app may enhance the user experience and provide additional reasons for them to select you over competing banks.
Digital Banking App Development Process
Sitech has developed numerous innovative fintech solutions in addition to helping banks build omni-channel digital experiences enriched with human intelligence across all interfaces. Developing digital products and services for the financial services sector looks like this when delivered reliably and fast through 2 week sprints with our Software Managed Teams.
The process typically looks like this:
1. Product Discovery and Analysis
The main goal of this stage is to determine how well-defined the project's requirements are.
What is the significance of requirements? The requirements phase of a banking app development helps you determine what features and functionality will make the app helpful. If the developers aren't given a thorough and detailed explanation of what the software should perform, the end output is likely to disappoint the client.
A preliminary design estimate is created based on the first needs. You may also clarify contract stipulations, authorize the payment mechanism, and finalize all critical job details at this time.
2. Specifying Requirements
Also part of our Product Discovery effort. A business analyst is engaged in the project to guarantee that you and the development team have the same concept of the outcome, as well as the product's goals and functions.
The goal of this step is to gather your mobile banking application requirements and transform them into the development language. The scope of a business analyst's responsibilities vary based on the size of the project and the level of detail in the original requirements.
3. UI/UX Design
The design phase's goal is to make the banking app appealing, comprehensible, and easy to use.
During this stage, the designer works closely with the business analyst. They collaborate to build a design using a pre-assembled collection of materials. The designer is in charge of how the financial app's interface looks and responds to user input. A screen map, visual components, and a comprehensive working prototype are produced for this, with several use scenarios in mind.
The layout is then worked on by the front-end developer. Their job is to "animate" designer layouts so that a user-interactive interface may be created. They create interface elements by employing HTML markup, CSS stylesheets, programming languages, frameworks, and libraries to logically and effectively connect displays.
The effort yielded static pages for the future site that were laid out perfectly according to the plans. The frontend team develops requirements for backend developers while working on the client-side of the user interface.
The goal of back-end mobile banking app development is to ensure that the server's response reaches the client and that the designed blocks work as expected. Another duty is to provide a comfortable and secure environment for customers to fill out and update material on the site.
5. Integrations and Testing
Testing is required to guarantee that all aspects of the banking app function properly.
First and foremost, QA engineers should ensure that the design and technical standards are met, generate test documentation, and execute human and automated testing. All of this aids in the testing of the fintech app's many software components and the reduction of bugs.
When you submit specifications for a banking app or a portion of one to the development team, QA engineers begin to work. Before beginning to test a project, testers review the documentation, clarify requirements, and engage in development conversations.
You prepare to deploy the fintech software on the server once the product has been thoroughly tested. The development team may also assist you in selecting and configuring a server.
Kema and Sanaam, for example, are digital fintech solutions that are naturally more flexible, sensitive to consumer demands, customer-friendly, and customized than traditional banks. Their greatest advantage is that they begin with the most up-to-date technology on a digital platform.
As a result, traditional banks will need to find out how to respond to this issue very soon.
This article gives an overview of mobile banking app development, such as Kema, and addresses the issue of how to create a fintech app. Each client requirement is distinct and necessitates in-depth research and analysis. Contact us to receive a free consultation with Sitech's experts and learn how to design a banking app for Android or iOS. We'll assist you in determining the stack of technologies necessary for development, as well as the time and cost of developing your future digital financial products, services and software.