How To Start A Neobank: 6 Main Steps

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A neobank is a financial institution that only provides services through apps and websites. They don’t have traditional physical stablemates. The startups are convenient for the users and provide a seamless online experience. They have the needed licenses to process transactions and do other banking tasks. Sometimes, they partner with traditional banks to combine their banking infrastructure with the digital convenience of neobank applications.

What you need to know

Freelancers and e-commerce owners require online baking, so catering to their specific needs is important. Develop an app with all the functionalities they need and market it properly.

It is important to note that digital banks are rising in popularity. In the US, 13.7% of people rely on online banking services. This percentage will rise to 20% by 2025.
Users can apply for an account online, which is appealing to tech-savvy individuals. But remember that in Europe users are required to submit ID, residency proof, and employment or school enrollment to create an account.

Product and market discovery

If you want to create a successful neobank app, product and market discovery are crucial steps. Your app must stand out on the market and gain a competitive edge. Don’t forget that you need to develop an app that integrates mobile as well as web functions.

During the discovery phase, you will understand this project’s scope, goals, and limitations.

Create UI/UX Design

A good neobanking app should focus on providing the best user experience. The design team will provide some examples that serve as the ideal base for the interface. To find out what works best for your target audience, analyze the competitors. Start with their solutions and check their reviews to find out more about the common pain points. Create a mind map to plan the following steps and work together with the user experience team.

We can take the Credit Agricole payment kiosks as a great example. The kiosks are meant to ease the queues at the bank offices. With an easy-to-use interface, this app is dedicated to the less tech-savvy users. The solutions are simple and easy to work with, while the system is scalable.

Develop the app

Once you have gathered useful insights, it is time to develop the app. The development team will suggest the possible options. In most cases, JavaScript, Vue.js, and React.js are considered for the web version. On the other hand, Flutter is preferred for mobile apps.

However, choosing the right tools isn’t the only important thing during this phase. You should also consider regulatory compliance. The banking industry is heavily regulated by law, so make sure to understand the rules before developing the functionalities.
And what else do you need to think of? At this point, the development of iOS, Android, and cross-platform apps should be decided. You would want to have the app accessible for every device, but don’t forget this will incur more costs.

Various functionalities should be considered for iOS mobile apps. Machine learning algorithms, Touch ID or Face ID authentication, and integration with Apple Pay are some examples of great apps.

When it comes to Android, make sure to include features such as GPS tracking, real-time synchronization, and integration of third-party payment systems. Cross-platform apps should be also considered, as they are compatible with different platforms. The backend aspect is also important, as we focus on building the app infrastructure, designing business logic, and establishing API communication to allow cross-platform compliance.