Neobank is an evolving alternative to the brick-and-mortar bank, which serves as a convenient and reliable partner for any app-based financial operation. The contemporary community prefers using neobanks due to their usability and tech features, like monetization models and auto-saving money wallets. Nevertheless, there is always an element of anxiety when it comes to creating a neobank from scratch, considering difficulties in understanding the overall app development process.
Consider a neobank launch guided by competence, inventiveness, and a dedication to safety. Agilie’s team understands security as a core component of the enduring principles for the reliability and integrity of our client’s platform. Plunge into Agilie’s development process to build a secure, transparent, and trustworthy neobank.
Learn about the ways to scale your neobank application development.
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The neobanking development process includes a detailed discovery phase, the development phase from the stage of an MVP to a full-fledged platform, rigorous testing and deployment process for a seamless launch of the product.
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Understanding the full development process allows clients to make informed choices and realize the complexities involved, spotting opportunities for growth and contributing to a successful market launch and operation.
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Agilie’s priority areas are scalability, innovation, security, and user-centric approach.
Neobanks Market Overview
Neobanking presents an essential alternative to the traditional bank, considering its ease in functionality, time economy, and digital-only operability. Neobanking services are in demand, due to their potential in entering new markets like SME lending and investment services. According to Statista, the transaction value of neobank app development and launch can reach $2.80tn by 2028.
Resource: https://www.statista.com/outlook/dmo/fintech/neobanking/worldwide
Agilie’s neobanking development process ensures a comprehensive, secure, and efficient rollout of digital banking solutions. Our methodical approach helps in launching a neobank that meets current market demands and adapts to future changes and innovations in the financial sector. Let's discover Agilie’s neobank development process.
Must-Have Neobank Characteristics
Developing a neobank from scratch is quite a challenging task, concerning the multiple operational possibilities it has to provide. Here are the following must-have features required to start a neobank.
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Account opening. The possibility of opening an account is a must for the neobank application, as it provides the client with opportunities to manage their financial operations online. The additional neobank’s pro point is the combination of virtual and plastic credit or debit cards.
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The standard financial operations. To define and build the neobank’s efficiency in usability, the application has to ensure basic payment abilities. The client has to be able to pay their bills, as well as perform financial transactions.
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Security. Security of the client’s data, financial operations, and funds is a must for any neobank. The 3D security protocol can benefit for securing client’s transactions. 2FA authentication can protect the client’s data when logging in. Compliance with PCI-DSS security standards enhances the card's protection, especially if the neobank operates Visa and MasterCard.
Learn more about robust security protocols in the fintech industry.
Unique Neobank App Features
Client-Centric Mobile Banking App
Building your own neobank platform requires taking into consideration client-centricity and usability of the service. Access to online accounts represents neobank’s competitive advantage against its traditional counterpart. Advanced image processing recognizes and verifies customer data, which is time-saving for identity validation and the start of the online activity. Peer-to-peer (P2P) and Account-to-Account (A2A) models are attached to the user’s phone/account numbers or emails, making it easy to transfer funds.
24/7 Assistance
Unlike the brick-and-mortar bank, which has its set hours of operations, neobank promotes around-the-clock tech assistance. Applying AI-powered algorithms benefits neobank to solve clients' issues. Chatbots assist in clarifying account balances and transaction status. If the AI-powered chatbot cannot provide solutions to the issue or fulfill the request, they connect the customer with the live agent.
Automated Budgeting Tools
An effective neobank app provides users with budgeting abilities like custom budgeting templates and automated rules for savings. Custom budgeting implies financial management, as the user can check their budget distribution for subscriptions, transactions, and expenditures. Customized templates like dining and bills can help the client rearrange their input within the top priority expenditures.
Automated saving rules represent a convenient opportunity for the client to generate an extra ‘savings’ income when receiving the transaction, salary, or making purchases. A small piece of income will automatically transfer to the savings ‘pocket,’ underlining the benefit of neobank virtual/real cards.
Agilie’s Steps in Building a Neobank Application
Step 1: Discovery Phase
Launching neobank from scratch is time-consuming and requires attention to details to execute the highest quality of the application. There are three key steps of creating a neobank: discovery phase, development phase, and delivery phase.
Idea Validation
All great neobanks are the products of unique and far-fetched ideas. Knowing the validation at the very beginning is quite important. Our team conducts the necessary analysis, which ensures that the idea of the neobank revolves around the gap in the financial market and the competition stays within the new entity. Through focus groups, market research, competitor analysis, and industry insights, we carefully assess the core values of the idea, uncover any existing challenges, and determine what differentiates the product from other similar products. The first validation stage of development determines the scope of work and all processes needed.
Requirements Gathering
This step is crucial for understanding the specific needs of the target users and the regulatory landscape the future neobank will navigate. Our team draws from a wealth of experience in FinTech and collaborates closely with stakeholders to identify both functional and non-functional requirements. This cooperation ensures that the final product is user-centric and compliant with global and local financial regulations, embodying a balance between innovation and adherence to standards.
Wireframe Design
Once our experts have a vivid picture of the project, they draw a wireframe to show the user flow and app layout. The wireframing at Agilie is beyond the drawing of the screens; it is about preparing an intuitive space for the users' journey. The blueprints for the neobank carefully place everything to ensure better user interaction and satisfaction. The visual prototype lets us iterate and improve the concept without writing any code. This method is time-saving and cost-effective in terms of the development process.
Architecture Concept Building
The architecture building phase is a crucial element of developing a neobank when Agilie’s developers craft an architecture that facilitates scalability and reliable and secure services. This includes:
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cloud environment,
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API-first designs,
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data security and compliance layer,
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data management, and analysis,
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scalability, and fault tolerance.
Estimation
Our estimation process is thorough and transparent, considering all variables to provide a realistic projection of the neobank development process. This step sets the stage for a smooth execution, aligning expectations and resources for the development ahead.
During the discovery phase, we validate ideas, gather requirements, design wireframes, build scalable architecture, and provide accurate estimations to ensure the project sets up for success and marks the beginning of a transformative journey in the digital banking sector.
Step 2: Development Phase
MVP Building or Proof of Concept (PoC)
The transition from conceptualization to tangible realization begins with the MVP (Minimum Viable Product) or PoC (Proof of Concept) phase. This step is optional but very important as it brings the neobank idea to life in a scaled-down form initially. The purpose of developing an MVP or PoC is multifold:
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to validate the core banking functionalities,
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to gauge user engagement and feedback,
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to test the value proposition.
This phase allows us to implement and test key functionalities, such as user registration, account management, basic transaction processing, and compliance checks, ensuring these components operate seamlessly and securely.
Agilie is your reliable development partner, who sets the foundation for a scalable, robust neobank platform tailored to meet and exceed the expectations of today’s digital-first customers.
Full-featured Platform
Our development process for building a full-featured platform is comprehensive, encompassing the integration of sophisticated financial tools and services such as
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multi-currency accounts,
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real-time transaction processing,
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personalized financial insights,
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advanced security measures,
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regulatory compliance management.
We emphasize the need for an intuitive user interface (UI) and smooth user experience (UX) to make the platform robust, accessible, and interesting for the users.
Our dev team employs the latest FinTech innovations, such as:
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Implementing blockchain to achieve better security and a more transparent process.
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AI in the framework of personalized banking services.
We adopt agile development methodology because we can iterate and deploy new features rapidly responding to market changes and customer needs.
Find out more about our fintech development process.
Step 3: Delivery Phase
Testing
The Delivery Phase includes the thorough testing process to ensure reliability, security, and performance with Agilie's rigorous approach, which prepares the platform for secure market entry.
Our testing strategy incorporates:
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Functional Testing: It ensures that every feature runs according to the specs and the unit requirements at the exploration stage, which guarantees a smooth flow of every banking operation.
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Security Testing: This involves vulnerability scan, penetration testing, and compliance checks, which meet global standards like PCI DSS, GDPR, and local standards, making the customers' data protected and platform secured.
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Performance Testing: We test its performance in peak loads and maintain its reliability under various conditions.
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Usability Testing: This enables us to practice UI/UX to produce an interface that is simple, exciting, and adaptable to varying devices and platforms.
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Compatibility Testing: The platform of the neobank is subjected to interoperability tests to guarantee the smooth functioning of the platform on different browsers, operating systems, and devices to ensure a consistent experience for the customer.
Deploying
We carry out the launch of the neobank platform with care and planning to make a seamless transition to live operations. Our deployment strategy encompasses:
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Staged Rollouts: We analyze risks by publishing a controlled group of people at first and after successful trials, it launches and monitors performance in the real world to make any adjustments.
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Monitoring and Support: We are responsible for our services, and we care about our clients. Here we act as ongoing monitors and supporters beyond the launch, providing the best platform operational practices and resolving issues promptly, having a round-the-clock support team for high availability and reliability.
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Feedback Loop Integration: This helps in identifying areas of improvement to ensure the platform grows accordingly to meet user expectations and meet competitive market demands.
Agilie’s Delivery Phase provides correct preparation for a neobank to succeed and compete with digital banks in the market by ensuring stable operations, security of the system, and user-oriented performance.
Discover our cases, Agilie's approach, challenges, and solutions of success stories.
Challenges for Neobank App Development
Regulatory Challenges
Building your own neobank from scratch might be difficult, especially for startups. The dynamics in governmental regulations require neobank-specialized organizations to adjust to the legal requirements. For instance, if the company does not comply with the data protection laws, the neobank will lose public trust in it because of the risks of data leakage.
Customer Trust & Security
The additional security challenge relates to the safety of client’s transactions. Security divides into hacker attack prevention and tech bug elimination. The evolving nature of cyber attacks makes it easy for intruders to circumvent authentication measures and steal personal data. Another element of security is tech effectiveness. Automatic double-spending, disruptions in the transaction or payment processes, and scalability dilemmas can undermine the user’s trust in the bank’s effectiveness, motivating them to prefer the competitor’s app.
UX Design
Page-load speed, user-friendly design, inclusivity, interface, and cross-platform practical functionality ensure customer memorization and brand loyalty of your neobank. The engine rankings can drop if one or a few of the presented elements are weak in presentation and operation.
Cost Considerations
Building a neobank’s precise cost depends on the size of the project, the features added, the sector it serves, and the regulatory framework in which the bank starts operations. Here are some general cost ranges for different components of the development process:
1. Technology Infrastructure Development and App Development
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Basic Version: The costs of a simple neobank app with basic features may be in the range of $100,000–$500,000.
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Advanced Version: A more sophisticated app with a broad range of features, such as integrations with various payment systems and significant security measures, can take between $500,000 and $2M or even higher.
2. Licensing and Compliance
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Minor Markets: Licensing and compliance costs in smaller or less regulated markets range between $50,000 and $200,000.
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Major Markets: In a highly regulated market like the U.S. or the EU, such costs can soar above several millions because of the complexity of the regulatory framework.
3. Security Measures
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Set up of security and ongoing monitoring and evaluation will consume $100,000 to $500,000 for the initial cost, while the disbursement would depend on the level of security and monitoring desired.
4. Marketing and Customer Acquisition
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The first round of marketing campaigns can cost about $200,000 to over $1M, depending on the range and types of channels utilized. This is the core to gain visibility and catch users.
5. Operational and Administrative Costs
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These amount from $100,000 yearly for minor operations but can reach $1M for bigger teams and offices, especially as the neobank grows in size.
6. Customer Support Infrastructure
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Establishing customer support can range from $50,000 to $300,000, depending on the complexity of the system and the expected number of customer interactions.
Final Thoughts
Agilie offers a holistic and transparent neobank development process, which considers innovations, security, and user experience. The process comprises the first Discovery Phase, then the Development Phase, and eventually the Delivery Phase.
Our fintech development skills and adherence to security, scalability, and user satisfaction make us a reliable fintech partner for neobanks. Our approach is to create a product through the partnership that stands for innovation, growth, and success. With Agilie, clients can develop a reliable, scalable, and winning neobank that matches the market requirements and sets new standards for banking in the digital space.
