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How to Build Neobank App – 8 Simple Steps to Follow

How to Build Neobank App – 8 Simple Steps to Follow

Neobanking app development is becoming more and more important in the financial industry in this day and age of digitalization, when everything and everyone is going online. According to Statista, the US will lead the way with a remarkable US$1.785 trillion in transaction value, propelling the worldwide Neobanking market to an astounding US$6.37 trillion this year.

In other words, the rumors of Neobank coming to an end remain the same. A report predicts that Neobanking will have grown to an incredible $556.66 billion, at 47.2% CAGR in the next three years. These figures provide bank executives with a huge chance to profit from the rising demand for financial products that are easy to use and optimized for mobile devices.

But, what is Neobank and why is it beneficial, how to start Neobank? Let’s dive into this guide that explains Neobank app development.

What is a Neobank and How Does it Differ from a Traditional Bank?

Neobank is a fully online-only financial institution. Without having physical locations, these alternative FinTech businesses interact with customers and offer online financial services.

Neobanks are often independently operating, licensed financial institutions that carry out offline banking operations. Neobanks, however, are occasionally middleman companies that work with traditional financial institutions to offer their services online.

Difference

Neobanks and digital banks are different from each other in terms of how they were founded and operated.

In the digital age, neobanks are born without physical branches or legacy systems.

Conventional banks that have adjusted to the digital environment are known as digital banks.

Although they both seek to offer Internet banking, neobanks go one step further in this regard. It entails creating something wholly novel and cutting-edge in the finance industry rather than merely converting conventional banking services to digital platforms.

Let’s say you want to launch a digital bank or are unsure of how to establish a Neobank. If so, you should be aware that, because they are built from the ground up rather than from the foundation of established financial organisations, Neobanks provide a more inventive approach.

What are the Monetization Models of a Neobank?

Neo banks’ innovative revenue sources and cutting-edge business plans have fundamentally revolutionized the traditional banking industry. Below is a list of the five primary business ideas that nonbanks rely on to generate revenue.

Model-driven by Interchange

Merchants have to pay interchange fees every time a customer uses their card to purchase for this model to function. Neobanks can also profit from referral commissions, cashback incentives, and affiliate marketing. (Chime, for example).

Credit-led Model

Under this approach, neobanks offer a credit card or similar product before offering a bank account. They get fees and interest on the credit they extend to their clients. (Nubank, for instance).

Ecosystem-led Model

Although it may not be the main source of earnings in this approach, the checking account opens up a variety of monetization options. Value-added services including investment possibilities, savings targets, and budgeting tools are ways for neobanks to make money. As an extra source of income, several neobanks also provide monthly subscription services. (For instance, Monzo).

Asset-led Model

This business is centered on providing clients with high-yield savings accounts and making interest on deposits. Certain neobanks prioritize the control of moral and ethical expenditures and allocate client deposits to environmentally or socially conscious initiatives. (For instance, Aspiration).

Product extensions model: Under this strategy, Neobanks provide a wider range of financial goods, including investment accounts, loans, and insurance, by utilizing existing clientele and technological infrastructure. The distinctions across financial spheres are muddled by this concept.

develop a successful Neobank app

Benefits of Neobank App Development Solutions

Neobanking is a truly novel way for companies to interact with tech-savvy consumers who value accessibility above traditional, frequently antiquated banking service providers. This is a chance for companies to expand their reach by providing banking services to underserved populations in the past.

Neobank development enables your company to satisfy the demands of modern customers who want quick, simple, and flexible financial services. These needs are typically not met by traditional banks, which typically have clunky, limited online and mobile capabilities. Still, developing a Neobanking app could help you attract investors to your company and boost the likelihood of lucrative future joint ventures.

How to Build a Neobank App – 8 Easy Steps

It might be challenging but gratifying to start the Neobank development process from the beginning with the help of the best mobile app development services provided by a well-known app development company. The following eight steps will help you construct a successful Neobank application.

Step 1: Identify Target Market

Understand the Fintech market and what are their requirements. Plan accordingly the features and functions that meet the needs of the target market.

Step 2: Understand the Requirements and Needs of the Target Group

Identify the gap between the target audience and what are the needs of a Neobank as your next step. You can add features and functionalities at this stage to enhance user experience and build credibility.

Step 3: Hire Fintech Experts

Hire mobile app developers experts in Fintech development and banking including Neobanking. This is essential to provide satisfaction to the customers and get a successful application for your business.

Step 4: Create a Neobank App

Your developers will design and create the front-end, backend, and UI/UX of your Neobank app at this stage of the development process. The essential features—user verification, fast signup, investment, transaction history, etc.-will be put into place.

Step 5: Create Backend and Core Infrastructure

For a Neobank to conduct all of its operations, a strong backend infrastructure is required. To integrate payment gateways with your Neobank app, a card processing software for debit and credit card transactions, and back-office tools for day-to-day management, you must set up APIs.

Step 6: Security and Compliance

Ensuring the data and confidentiality of the customers is the top priority of any bank. You need to have a strong security system in place to protect the users’ data. Understand the cost and build an MVP to get the idea of the final cost varied on different security methods.

Step 7: Run a Neobank App Test

You must thoroughly test your Neobank app before releasing it.

You can find and address any bugs in your app and make sure it is safe and secure by testing it using real-world use cases.

Step 8: Launch the App

Once the app is launched, keep collecting data and user feedback so that it may be improved over time through iterations. This continuous process makes it possible to improve performance, refine features, and make sure the app changes to meet the needs of the market and customers as they change.

You may like this: Fintech in Wealth Management

Key Features of a Successful Neobank App

Key Features of a Successful Neobank App

Developing a fintech application entails incorporating the essential components that meet the contemporary demands of today’s tech-savvy customers. Product marketers and mid-level managers ought to concentrate on the following essential features to make their Neobank app stand out:

Strong Security Protocols

One special feature offered by the Neobank app is biometric authentication together with real-time transaction alerts and safe encryption. Additionally, this is still the only method for protecting customer financial information from cyber threats.

Real-time Alerts

Consumers are used to receiving automatic financial updates. Keeping users informed and sustaining user engagement can be achieved by providing them with real-time notifications about transactions, balance changes, and any fraud attempts.

Tailored Financial Perspectives

Because AI is integrated into the app’s banking functionality, it evaluates user data and offers guidance on personal finance, saving, and spending, all of which enhance the user experience with banking.

Automated Tools for Savings

The app’s automated saves, round-up investment features, and goal-setting tools are essential; they may support users in taking charge of their finances and developing sound financial practices.

Seamless Payment Solutions

The app is indispensable to users and satisfies their everyday financial needs because it offers peer-to-peer, contactless, and quick transfer options.

24/7 Customer Support

Make sure that customers may contact you at any time, and that you can respond to their questions and handle their problems as soon as possible by utilizing live chat and AI bots for customer service.

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Core Features for Neobanking Applications

When designing a Neobanking app, focus on secure authentication, intuitive interfaces, robust account management, and simple payments.

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How CMARIX Can Help You Dominate the Digital Banking Landscape?

The problems of competing with Fintech companies and adjusting to changing consumer demands are constants for traditional financial institutions. Neobank APIs, on the other hand, can quickly increase their market share because they are not constrained by substantial labor and capital costs. Recognizing these changes and creating your Neobank as a business owner can improve your chances of surviving. Achieving success in the digital sphere will not only help your company but also give customers more options.

We at CMARIX can provide you with the following choices:

  • Creating an MVP (Minimal Viable Product) to test the Neobanking solution under real-world settings while developing a Neobank from the ground up.
  • Reorganizing software modernization services to accommodate current e-banking solutions.
  • Upgrading certain aspects of your Neobank functionality to improve your Neobank app.

The price of developing a Neobank app can range from approximately $45000 to $90000 USD, based on several variables like functionality, tech stack, and hourly development costs, etc. So, the secret to your company’s success is to work with a specialized financial software development company like CMARIX, which can assist you in leveraging current trends and market requirements at a cost that is optimized.

Customers and merchants can now interact through the next-generation digital marketplace, which also provides the former with an inexpensive financing alternative. The software might record more than three lakh transactions in a single day.

Finding pertinent solutions to market requirements & user expectations is crucial to launching a successful digital finance app. Reach out to CMARIX developers to discuss your ideas for finance software development services.

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Written by Atman Rathod

Atman Rathod is the Founding Director at CMARIX InfoTech, a leading web and mobile app development company with 17+ years of experience. Having travelled to 38+ countries globally and provided more than $40m USD of software services, he is actively working with Startups, SMEs and Corporations utilizing technology to provide business transformation.

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