Banks have become mobile, and it is not only the prerogative of those which started as app-only organizations without physical bank branches. Today, financial services must be online to succeed and not become obsolete. However, neobanks, which often have no physical branches even in plans, are still emerging – and you can consider this industry for entering!
See the banking app development company website to evaluate the development costs and strategies. Here, let’s overview why mobile banking is a prospective industry, which key players are present here, and how such apps work.
Mobile banking is a prominent branch of the global fintech industry. While it is hard to evaluate its total value, the most important characteristic is that the estimated number of mobile banking will be more than 2.5 billion in 2024, as one can see in the chart below. While the number is growing slowly, you can be sure that the growth will be steady and worldwide.
Money is a too basic thing for people to change opinions about it quickly. If one used to go to the bank branch for several decades, they would likely continue to do this even in 2030. But as more and more people open the advantages of mobile banking, the growth becomes faster and faster.
Even the most traditional banks now seek ways to become mobile now. While 20 years ago, digital banks were exceptional cases and something breakthrough, today the bank must be mobile in order to compete successfully. If it decides to keep itself inside the walls of its branches, it risks becoming obsolete and being pushed out by aggressive hi-tech competitors which will allure its customers via their apps.
Here, we’ll focus mostly on neobanks, which made online banking the core of their businesses, to show you a bright example of how it can be possible.
Modern mobile banking apps need to be as user-friendly and safe as possible, as it determines their success. Money is the basis of the modern world, and banks are pillars that constitute it, so they are directly responsible for ensuring the best possible experience for their clients. Let’s summarize how digital banks implement this.
- Reduce expenses as much as possible by automation and making the most of features online, saving money for the banking options.
- Money management includes statistics, investment tips, and help with taxes.
- Safety is a crucial issue here, and usage of blockchain encryption is important to ensure that the hacking chance is close to zero.
- UX and analytics: these apps focus on providing a good experience for their customers and explain as much about their money as possible, making sure that they will be happy and aware.
Actually, more and more people use mobile features to manage their money, but it is still much more prevalent among younger people. People who love everything hi-tech and online, business owners, and people younger than 25 are the core of the mobile banking target audience.
However, the number of banking app users increases every day, as their benefits are tremendous: digital banking is better almost in every aspect. It is safer, encrypted by modern defense mechanisms, much quicker, support is available 24/7, and the user has much more control over their expenses and other options. Therefore, while you should focus on the younger generation, make sure that your app will be potentially comfortable for all people who can use the smartphone regularly.
Banking apps provide tools for card and account management, enabling customers to see all their balances, loans, and expenses. It should also quickly and automatically process payments between cards and accounts and show all information connected with the user’s money. Lastly, the support service should be available 24/7, as such a sensitive theme requires support at each moment.
Here you can see a scheme showing the essential features, but as you’ll see, there can be many additional ones, such as helping with taxes and financial consulting.
As mentioned, many traditional banks now have a mobile app: actually, it’s easier to find a bank without it. Taking the great advantages, it is no wonder: large players want to remain large. Bank of America, for example, now has a mobile app that is used by tens of millions of its clients in the United States.
However, new tech-savvy company founders quickly invade the market, occupying the place and creating mobile-only neobanks, which have become increasingly popular. Some of them eventually open physical branches, while others see no sense in it.
Let’s see several examples from various countries to evaluate how a mobile app can become a basis for a bank with millions of users and no physical branches. See the UI of one of them, Revolut, taken from Behance: demonstrates neobanks’ features of managing customers’ money.
- Nubank is a Brazilian banking app, founded in 2013; it became a billion-dollar enterprise in 2016. It provides a wide range of features, along with all mobile banking ones, from financial tips to comprehensive statistics, which makes it highly popular and loved by customers. In 2019, it started to become international, entering other Latin American markets, and now it has more than 75 million customers, more than 90% of which are still Brazilians.
- Revolut was founded in the United Kingdom by entrepreneurs from Eastern Europe in 2015. It grew quickly, and now it operates in more than 10 countries, including the European Union countries, Japan, and the United States. In 2022, it has more than 20 million customers, and its number grows constantly. While having all banking features in a clear and comprehensible UI, it also offers crypto trading and investing options.
- N26 is a German neobank, operating in most EU countries, especially in France and Italy, besides Germany itself. It was founded in 2013 and now has more than 8 million customers in Europe.
- Discover is a United States enterprise, started in 1986 and online since 1995, being one of the pioneers among neobanks. It focuses on helping people manage their money and spend more wisely, providing very detailed statistics of financial flows. The neobank has more than 50 million customers in the U.S.
- Tinkoff is an example from Russia, founded in 2006. Now it is among the largest Russian banks, with over 15 million customers and no physical branches. It also provides various investment tips, has multiple cashback options, and helps manage incomes and pay taxes.
The most obvious benefit is that you become free from the necessity to visit your bank branch regularly. Queues, extra time, and the inability to solve many questions quickly, all of these can be overcome by a smart banking app. Such convenience is a great achievement of new banking technologies.
Another point is the variety of features and useful experiences. Users can track their money flows, and many neobanks provide detailed statistics and even help with investments, empowering users. Such apps are crucial to make people more aware of their money, which increases their happiness and chances to be more successful in life.
Lastly, security and reliance are highly important for them. While one can argue that data can be hacked easily, security solutions based on modern technologies, such as blockchain, are very hard to break. In addition, neobanks are reverent about their reputation, as it is extremely important for their popularity. It is in their interest to be as kind and honest with customers as possible.
The tech stack is what you’ll need when developing any software. Its basic components for a banking app are shortly present in the list below, and you can read more here.
- APIs to connect external services are crucial for payment proceedings.
- Frameworks for UI and back-end development, such as React Native.
- Databases to work with data, stored on servers and processes by the app.
- Cloud servers for data storage and all computations. They can also include AI technologies for smart analytics.
- Security solutions are essential to protect users’ data and money which can be based on blockchain technologies.
Lastly, we are happy to show you an excellent scheme of the mobile banking app’s internal structure from Jatapp.
Mobile banking is growing and will be. Money management apps are in trend, and you can find your own niche in this industry. Many banks started just as small financial companies, and most of them began no more than 10-15 years old. So, there is a lot of space here!
You can evaluate options of famous examples, especially Revolut and Nubank, to see how they managed to be so favored and efficient. Mobile banks have much, much fewer expenses compared to physical, “mortar-and-bricks” banks, and if they can organize the money flow of their customers, they can scale indefinitely.
Banking apps are pillars for the economics of the future. It can be safely said that they are becoming an integral part of the human civilization. And it is a question of time when all people will use such apps regularly. The benefits of convenience, empowerment, and safety are too large to ignore them.
While there are many prominent market players, you still can enter the industry and succeed there if you’ll be able to make the customers happy and help them with their money. There are more and more segments where convenient mobile banking is useful, and you even aren’t required to limit yourself to the national borders! Just learn the tech stack required for the development, create a good prototype, and make sure that you comply with local financial law, and it can be the start of your own banking app.