Everything You Need to Know About How do banking Apps Work and How to Develop One

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how do banking apps work

In May 1995, American bank Wells Fargo introduced Internet banking to their customers. In other words, Wells Fargo was the very first physical bank to make the shift to the Internet. Today, there are 1.9 billion active online banking users worldwide, this is only possible because of mobile banking app development. In this blog, we will discuss how do banking apps work.

Banking in this digital age must be convenient, accurate, safe, and available immediately. Banking services were once only available from 9 am to 5 pm, Monday to Friday, except on holidays. Nowadays, people are turning to smart banking solutions for their banking needs. The different types of banking services such as opening an account, applying for a loan, depositing, or withdrawing money no longer require the customers to visit the branches.

The prevalence of mobile banking is undeniable, as highlighted by the findings of Insider Intelligence’s Mobile Banking Competitive Edge Study. An impressive 89% of the participants in the survey confirmed their engagement with mobile banking. Additionally, a staggering 97% of millennials expressed their active utilization of mobile banking services.

Considering that the number of individuals opening their accounts and connecting to the banking system is continuously increasing, mobile app banking appears to have a bright future.

Throughout this article, you will learn about things you should consider when developing a mobile banking app and why you actually need one.

What do you Understand by Mobile Banking Apps?

Mobile banking is an application that can be used to do almost everything you’d do at a physical bank, but you can now do it from your phone or tablet. “Perhaps, it’s like having a physical bank in your pocket, but now it’s in your hands.”

With a mobile banking app, users can access their bank accounts 24/7.

How do Banking Apps Work?

Banking apps allow users to access their bank accounts and perform various financial transactions using a mobile device. How do banking apps work?

These apps are typically packed with a wide range of features and functions, including checking bank account balances, transferring funds between accounts, paying bills, and most of the time investments. To use a banking app, you need to have an account with that bank or other financial institution.

Then you need to download the app from an app store and install it on your device. Once the app is installed, you can access it by entering your login credentials i.e. usually your username and password and also biometrics.

For better security of your finances, some banking apps may also require you to set up additional security measures, such as two-factor authentication, to protect your account from unauthorized access.

Once you are logged in, you will be able to view your account information and perform various transactions. The specific features and functions available will depend on the app and the financial institution.

Is Mobile Banking Secure?

The security of banking applications is significantly fortified due to the robust safety protocols implemented by both our smartphones and the banks developing these apps. Nevertheless, it’s important to acknowledge that mobile banking cannot be considered completely impervious. It’s imperative to consistently exercise caution while accessing your bank account, which includes employing robust passwords and refraining from interacting with suspicious links.

Mobile Banking App Development Process

The following tips can help you to develop an online banking application-

1. Market Research

Your process should begin with a market analysis, followed by a study of our competitors and market conditions. The cultural aspect, user persona, mentality, and usage habits should be seriously considered when developing mobile banking.

In order to get a better understanding of how to prepare for a market-fit mobile you can check out this guide on how to get started with a mobile app idea.

2. Security

Mobile banking involves handling sensitive consumer data, which is why there are some security considerations you should consider before development begins- auto-logout, secure password, data privacy, and security authentication.

3. Developing and Testing a Prototype

Prototypes can be viewed as simplified versions of the final product which includes- app structure and app design. The prototype enables you to test your idea. By collecting user feedback, and understanding what works and what doesn’t, you can make appropriate changes.

Discover the top prototyping tools for crafting exceptional mobile apps in our latest article.

4. Designing UI and UX

One of the benefits of online banking apps is their user-friendly design. Transferring a large amount of money always makes you nervous, so make sure you hire a good UX & UI Designer who will design a simple, intuitive, and friendly interface.  Designing UI and UX is one of the key elements where you stand out from your competitors.

New to the design world? Our mobile app design agency can turn your idea into an engaging reality.

5. Technology Stack

Each project has its own specific needs when it comes to mobile banking development. However, a smartly chosen tech stack can help lower costs, reduce software development time, and increase time to market.

5. Coding

The app can be implemented by in-house developers or by software development outsourcing partners. If you have the budget and time to hire banking software developers, the first approach is suited for you. However, if you want to begin the development process quickly, we recommend hiring efficient banking app developers who are employed by experienced vendors.

6. Market your Banking App

You must follow different requirements for submitting apps to Google Play Market, Apple’s App Store, and Microsoft Store so that the submission process goes smoothly. The app will receive its first feedback, ratings, and stars once it has been published.

Discover the strategies to effectively market your app and reach your target audience. Read our comprehensive article on app marketing strategies now!

7. Mobile Banking App Features

Check out these app features that turned the app from competitive to cutting-edge.

  • Login page
  • User Profile
  • Check account balance
  • Transaction history
  • Money Transfer
  • Face ID
  • Integration with Wallet app
  • Expenses
  • Rewards
  • 24/7 support
  • Cashback
  • Push notification
  • Chatbot
  • Personalized offers
  • QR code scanner
  • Recurring payments
  • ATM and bank branch locations
  • KYC verification

Benefits of Mobile Banking App

how do banking apps work

The following reasons may explain why customers prefer mobile banking apps-

  • The bank enables you to open various types of accounts and apply for different schemes, and money transfers, receive payments, deposit funds and apply for loans, check your account balance instantly, and get support from the customer service executive if you have any queries. 
  • The 24/7 accessibility of all online banking services is one key reason for people to move toward smart banking solutions.
  • With a banking app, you do not have to visit the branch every time you need the service. In addition, the solution is cost-effective because banks do not charge anything extra.

The Benefits of Online Banking App Development Bring your Business

  • Faster development.
  • Reaching users easily.
  • Easier A/B testing.
  • A better understanding of user behavior.
  • Making the mobile banking software better.

Read our article on the advantages of digital banking to unlock a new era of convenience, security, and financial empowerment.

Technology Stack for Mobile Banking App Development

Listed below are the technologies we recommend for developing mobile banking apps-

1. Cross-Platform App Development

Cross-platform app development provides developers with the ability to develop apps that can run on multiple operating systems with one code base.

Want to learn more about cross-platform app development? Read this guide on what is cross-platform app development.

2. Native App Development

When creating a banking application for iOS or Android only, it is best to use native app development. iOS-based software solutions for mobile banking are best made with Swift, Xcode, and iOS SDK. Android-based mobile banking applications can be developed with Java, Kotlin, Android Studio, and the Android SDK. 

Discover the advantages of native apps – Dive into our article now to explore the numerous benefits they bring!

Is it Expensive to Develop a Mobile Banking App?

There is no definitive answer to this question. There are many factors that determine the cost of mobile banking software solutions, including scope, complexity, and technology:

  • Technology Stack
  • Expected deadline
  • Duration
  • Team augmentation
  • API integration services

Want to get an idea of the mobile banking app development budget? This guide on app development costs in Singapore will help you get the estimated cost.

Conclusion

A drastic change has taken place in the way people access banking services since mobile banking was introduced. With this, it has reached out to a wide range of people.

For us, the best part about developing mobile banking apps is when our features and design together reach a whole new level of user experience. 

Are you looking to build a banking mobile app? Our mobile app development company in Singapore can help you build a highly immersive mobile banking app and can explain how do banking apps work in detail.