Mobile Banking Application Development: Trends, Challenges, Key Features
Just imagine the fact that almost one third (32%) of the global population utilizes mobile banking software. This is a far more convenient and user-centric service, while, at its core, this app type demands high security and risk-free functionality.
Continue reading to learn about mobile features, trends in mobile banking, the target audience, and top banking apps on the market.
Benefits of App Development for Finances
Banking application development really provides valuable advantages for both the banking institution and the client. And the benefits are listed below.
- Availability 24x7
- Variety of services & operations
- Time efficiency
- Paperless record keeping
- Reduction in customer service costs
- Increased security
- Personalized user control
Banking App Development: Market Situation
In order to get the best outcome from banking app development, let’s check out the current market tendencies, what customers demand from banking software, and discover the top banking apps.
Mobile Banking Trends
Below are the key findings of various studies about banking software development that are useful to pay attention to:
- 1.75 billion users will conduct banking operations via their mobile devices in 2019 (Jupiter)
- The value of mobile payment transactions reached $78.09B in the USA in 2018. This sum is expected to increase to $189.97B by 2021 (Statista)
- The leading global banks have invested almost $80M in, and have launched 606, mobile banking applications (Exicon)
- The top reason for using mobile banking software in the USA is convenience, which is mentioned by 45% of respondents (Statista)
- Competition among financial service providers has decreased since many small US banks merged or closed — 61% decline within the last 30 years (MX, 2016)
- At the same time, the number of total bank deposits has expanded and increased by 300%+ (MX, 2016)
Target Audience of Banking Applications
India and Bangladesh have gained more access to smartphone usage and, thus, to innovative banking services.
The markets in Asia and Africa have had a boost of 50% among the inhabitants who utilize banking applications.
The McKinsey study notes that even very poor people in the Philippines showed a surprisingly high interest in mobile banking technology.
These days, the highest growth in acceptance of modern banking can be observed in emerging markets, namely:
- Southeast Asia
- Latin America
- Eastern Europe
There is often an assumption that the target audience of banking apps are tech-savvy millennials. Surprisingly, 45% of Baby Boomers between the ages of 50 and 60 actively use this software. At the same time, youngsters if the most engaging group, being pretty demanding of technology.
According to a Federal Reserve Board report in 2016, the most common operations performed with apps for banking are as follows:
- 94% of users check their account balance and recent transactions
- 61% transfer money between bank accounts
- 57% receive alerts from their banks
- 48% deposit checks electronically with the help of a device’s camera
- 48% use an app or banking website to pay their bills
- 40% find the closest ATM or bank branch
- 25% transfer money to another person’s account
Best Banking Apps
The most rated and best banking app, as defined by Retail Banker, is the IKO app. The most highly rated app in the USA is Capital One, with 4.7 ratings both in the Apple App Store and Google Play.
The illustration below shows the most well-known financial establishments and evaluates each on two axes — agility to the modern technologies and the level of innovations.
The table below includes the list of mobile banking apps and describes their functionality.
Mobile Application Development: Banking Functionality
Key idea: For efficient banking app development, the majority of users (86%) are interested in two features — checking balances and exchanging funds between accounts.
Essential Features of Mobile Banking
The general features used in mobile apps for banking operations are as follows:
- Account creation
- Account management
- Customer support
- ATM & bank branch locations
- Secure payments and transactions
- Push notifications
Extra Features for Banking Apps
The app features mentioned earlier create the core of banking app development. In order to increase user traction and interest, you should be thinking about some innovative features, like:
- Spending trackers
- Cash back service
- Personalized offers
- Unique services
- App for smartwatches
- Finance sharing feature
Final recommendation: It is better to develop a couple of apps with distinct features rather than complex software with lots of operations, details, and data. Try to ask your target users about their priorities in banking procedures and focus on providing a solution for them first.
Challenges in App Development for Banking
According to a poll conducted by Nielsen, the main barrier to mobile banking usage is an inability to trust a transaction made via this channel.
The main risks and challenges for mobile banking app implementation are connected with security concerns, protection of user privacy (e.g. GDPR in Europe), very detailed verifications of user input, and at the same time keeping the service simple to use.
Thus, security should be synonymous with your app.
Stages & Cost of Mobile App Development for Banks
In general, banking app development can be split into two stages, Discovery and Development.
The discovery stage includes all the preparatory work for the project.
The deliverables after the Discovery phase include:
- Finalized app concept
- Product backlog
- Project architecture plan
- Product design (UX & UI, clickable prototype)
- Market and competitor analysis (optional)
During application development, a cross-functional team is allocated including:
- Client-side developers (iOS and/or Android platform)
- Back-end developers
- Quality assurance engineers
- Project manager
Regarding the cost of banking app development, 15 global banks spent, on average, $132,000 per app. The total expenditures constituted almost $80M and included 606 different apps.
Another study conducted by Clutch indicates that the cost of complex solutions including the banking apps ranges from $200,000 to $500,000.
Generally speaking, development costs are unpredictable during the early stages. This is due to the following, and other, possible factors:
- Vendor type and location
- Complexity and the number of app features
- Back-end infrastructure and connected APIs
- Complexity of UX/UI design
- Inclusion of additional branded visual elements
- Development approach (native, mobile web, hybrid, etc.)
- Number of platforms to be developed (iOS, Android, web, etc.)
The major factor influencing mobile development cost is the hourly rate. Eastern Europe, especially Ukraine, is a well-known offshore development region characterized by reasonable pricing and high-quality software development.
How to Create a Banking App Project Successfully
It is absolutely certain that the banking sector will only become more and more digital.
So what makes a good banking app?
1) Applicable and user-friendly functionality that is secure and easy to access
2) Application of advanced, innovative technologies like AI, Big Data, AR, VR, and Blockchain to enhance the user experience
3) Adding new functionality and scale software in accordance with upcoming mobile banking trends
This is a summary of an article. Check out more details about banking app features, their costs, and the best approaches to use in the complete article on the MLSDev blog.