Fact: everything has gone mobile these days, including our finances.
Today, 25% of the top 50 global banks already offer native m-banking apps for their customers and win more business.
But it’s not too late to join the party.
Some 1.75 billion users will conduct banking operations through their smartphones by 2019. Just imagine that is 32% of global adult population!
The same Gartner report also suggests that emerging markets such as China, India and Bangladesh have actively hopped onto the mobile banking bandwagon during the past 12 months.
In fact, banking services for the unbanked have become one of the most lucrative market segments to tap into for mobile telecom service providers.
But wait, there’s even more.
According to McKinsey, traditional banking in emerging markets around Asia and Africa reaches around 37% of the population, while mobile phones boast a 50% penetration rate.
On average, for every 10.000 people there is just one bank branch and one ATM, but over 5.100 smartphones. As mobile devices reduce the cost to serve a customer by 50%-70%, it becomes profitable to offer financial services to a vast low-income population segment. And that is just one large market segment you may want to disrupt.
But the truth is this.
The entire banking sector desperately demands innovations, which means numerous untapped niches available for startups and innovative banks.
Let’s have a closer look on your potential target audience as the first step towards building a popular, profitable mobile banking solution to harness the opportunities at your market.
Developing a mobile banking app? Get To Know Your Target Audience First
Tell me, who is your end-customer?
Wait! Let me guess…
You’d probably say something like – “a tech-savvy millennial from middle/upper-middle class, who feels comfortable with gadgets, shops online, makes business on the go and travels an awful lot”.
That’s a close hit indeed.
But millennials and Gen Zs are not the only ones interested in settling all sorts of money matters through mobile.
MX has uncovered the next curious facts and trends among the mobile banking consumers in the US.
- 45% of Baby Boomers and seniors actively use mobile/online banking.
- However, 20% more admit that they don’t understand how to use a mobile banking app.
- 60% of Millennials are quite unsatisfied with their current mobile banking solution.
- Consumers now interact with banks 15-20 times per month, compared to 3-4 times at the pre-digital age.
Here’s another kicker.
Despite the rapid overall growth, individual financial institutions are often struggling with user adoption rates for their new mobile banking apps. Lack of usability and sub-par user experience is among the top barriers for entry according to Nielsen report:
These are the essential concerns to address and take into account when you plan to develop a banking app.
And here’s your next step.
Develop a clear understanding of what features users actually need within the app and how exactly they will use it.
The Financial Brand survey has you covered with this one:
Equipped with this data and your insights of the local market (including direct customer surveys) your next steps are:
- Develop the beta set of features and user stories explaining what your app will do
- Reach out to our mobile banking app development company to help you figure out the best technology stack, UX and UI patterns for the product.
Speaking of those product features….
Let’s address the most common and important woe of all mobile banking users – online security.
Security Should Be Synonymous To Your App
This shouldn’t surprise you.
With the recent wave of data breaches and stolen credit card data all over the web, most consumers are very concerned about the security risks involved with mobile banking.
So how do I avoid those risk? Good question, my friend.
We’ll speak from our experience with a custom mobile banking app solution for PrivatBank – the largest Ukrainian bank with international presence as well.
Our team suggests incorporating the next security practices and respective policies for any mobile banking app development project:
- Review your existing security policies for already-installed web applications and make sure they adequately align with and govern the use of mobile devices on the network. These policies have to be technologically enforced and are dependent on user compliance.
- Configure application servers to ensure that they don’t forward phishing emails or those marked as spam applications to mobile devices.
- Integrate the latest digital signature technologies into the mobile app to make all the transactions more secure, yet still effortless from the user’s end.
- Have an encryption program installed for storage cards to avoid scenarios when a thief may get access to unprotected data on another device.
- Build-in a password strength checker to ensure that user input passwords will be very strong. You should protect both PINs and passphrases with them. The ideal length is 12 characters with numbers, letters, and symbols, however, most users will likely use shorter ones.
When it comes to mobile banking app security, one of your primary goals is to educate your customers about the security risk and best practices to follow.
Promote security as your core selling point. Highlight that using a native mobile banking app reduces the potential risks, as it’s harder for 3rd party programs to hijack their process and gain access to data.
Additionally, it’s worth creating a simple list of best practices and remind your users as often as possible to:
- Password protect their phones.
- Avoid saving login/pass data.
- Log out when they are done (or have the app do this automatically after N seconds of inactivity).
- Allow users to set certain limitations on the mobile app money transfers with further authentication required.
- Inform customers about each transaction via SMS.
- Urge them to update the app regularly.
- Make sure you clearly state which is the official application of your bank and where it could be downloaded.
Concerning the last point – did you know that over 650,000 malicious Android banking applications were registered around the web?
They were faking official banking apps and luring users to share their data.
Our job is to make sure that this doesn’t happen to you.
A Simple and Fast is Better Than A Slow and Complicated App
Do you know what alienates users even more than security risks?
The overall complexity of mobile banking apps. Specifically most folks comment on:
- Poor mobile logins.
- Clunky and unintuitive in-app UI.
- Meager design or absence of it.
- Lack of search and historic data features.
- Too many functions offered at once.
Here’s the kicker – 86% of mobile banking app users want just two features: check balance and transfer/receive funds between accounts.
Yes, it’s that simple.
You don’t need to copy your online web banking interface into an app. Besides, it would likely end up costing you a tiny fortune to get it right and secure.
Allow me to illustrate this point with one thrilling case study.
So, the estimated average loading time for a banking app is 15 seconds. That’s a whole century considering that most people now have 7-second attention spans! Charles Schwab offers the fastest solution with the av. response time of just under 5 seconds. Bank of America is the slowest one with 30 seconds in response time.
So what’s the difference between these two banking apps?
Schwab app has just 6 page elements, while the Bank of America has 58! Now imagine that each new element involves a request to the server, which slows the overall screen download time.
Bottom line: keep the amount of functionality to a necessary minimum. Survey your users about the primary needs and build one simple and elegant app to fulfill those.
Or here’s another option – build separate apps to perform different functions.
That’s exactly what our agency did for PrivatBank. We worked on two separate apps – a simple one to check balance and make transfers and a separate solution to capture receipts and pay them.
Aim at Minimalistic, Yet Attractive UX
Custom mobile apps for banks are often dubbed as the “ugly ducklings” of the entire mobile app industry.
Sad, but true.
You want to be among the game-changers, right?
In that case, build a mobile banking app using the next simple and efficient UX design principles:
- Intuitive navigation – the key operations should be performed with the least steps possible. The best option if they are instant.
- Personalize app experience – allow users to set the types of notifications and content they want to receive in the first place.
- Customize experience based on the frequent transactions – offer shortcuts for the most common operations.
- Avoid information overload and pair your app with the website – make the commonly missing features available through your app e.g. see pending payments, manage direct debt, add new payees etc.
- Match security requirements to the riskiness of the operation – it’s frustrating for most users to type lengthy passwords when they just want to review their balance.
- Consider value–add functionality e.g. pre-set monthly transfers to saving account or an IRA.
- Consider various kinds of gestures when prototyping your app – swipe, pinch, and rotate movements can add a delightful depth to your app.
Last, but not least – ruthlessly test your mobile banking app design as up to 5% of them crash exactly due to certain incompatibilities.
Don’t leave out the application testing up till the product is nearly complete.
The best banking application development companies will adopt the continuous testing approach to spot and fix troubles early on. Sure, the cost to develop mobile banking application may rise, but this will be paid back in forms of larger revenues and higher user adoption rates.
Design With Mobile Diversity in Mind
Look, your mobile banking solution will need to cater the needs of a really large crowd.
While Apple is rather consistent with gadget sizes and iPhone/iPad users diligently upgrade to the newest iOS versions, things become a bit more complicated with Android app development.
The platform variety is huge with multiple screen sizes available. Besides, not all the users upgrade timely to the latest OS version. That means you’ll have to support older versions too.
Also, mind this – different manufacturers support different features. Some Android devices have a physical keyboard, others don’t. Swiping is supported by Samsung, but may not be available from other manufacturers.
Different devices have varying cache sizes. If your app was built with the premise that there will be 200 kb of cache available and the user device has only 150 in allocation, the overall app performance will suffer. Too bad.
So what are your options here?
First, run tests on as many devices as possible, both emulated and actual ones. The more precise testing you conduct – the better the end product will be.
Install a mobile analytics solution to track the key app metrics and monitor the overall app performance. This way you’ll be able to spot bottlenecks early on and be smarter with your customer retention and attraction strategies.
The Total Mobile Banking App Development Cost
By now you should have a few solid ideas about the solution you’d like to offers your customers.
Now, let’s move to your favorite part – money talks.
The world’s leading top-15 banks have already spent over $80M on building 606 different mobile banking apps – that’s roughly $132.000 for one app.
Whooping number, right?
However, here we are talking about companies that hire top local IT talents with six-figure salaries or outsource development to extravagant-class agencies.
The best way to identify the final costs of your app is to talk to some mobile banking app developers and base the final price on a number of user-stories your app should solve (1-2 sentence scenarios for each feature).
You should get a relatively fair price with the median costs ranging between $40.000 and $60.000 with a mid-sized experienced agency like Alty.
Alternatively, you can determine the project cost by matching developers’ salaries to the amount of hours needed to complete the project:
Image from Finextra mobile banking survey.
Considering that your team will work around 40-45 hours per week on your project for 26 weeks, multiply that number by the average hourly rate in the region:
- US – $100-150
- UK – $70-$120
- Eastern Europe – $35-50
- India – $25-$35
- Australia – $100-$120
- South America – $43-$55
You should end up having with an approximate budget number for your project and from you can learn how to choose the right mobile app development company from this guide.
Obviously, for a precise project cost, you should speak with the developers directly. Alty team would be happy to help you with that. Scroll down to the contact form to reach out to us!