Explained: How to Create a Secure Mobile Banking App

Mobile banking is on the rise now, in line with the forecasts of the previous years. Mobile banking solutions deliver quicker, convenient, and personalized services, which is exactly why increasingly more companies are thinking about launching mobile banking apps. Having said that, the number of data breaches and security issues is increasing as well, so safety and data protection should be a top priority in mobile banking app development.

Below, we will review the main features of modern mobile apps for banking, and outline a plan for developing a secure mobile banking app. But first, let’s explore the advantages of software solutions for mobile banking. Read on to learn more!

Why you should start building solutions for mobile banking

The financial sector was fast to embrace digital transformation. Bankers understand the value of digitization and its capability to radically transform the users’ banking experiences. Moreover, the majority of today’s workforce, the millennials, would rather use a mobile app than visit a brick-and-mortar institution for submitting a loan application or conducting a money transfer.

As per Allied Marketing Research, the amount of mobile banking earnings worldwide is set to reach USD 1,824 million by 2026. Due to the pandemic crisis and the accelerating digital transformation movement, the digitization of financial services could take up an even faster pace.

Other surveys indicate as much as 91% of customers prefer opening an app to a physical visit, which means mobile banking app development has great potential.

The key players on a mobile banking scene fall into two major categories: the newly emerged digital banks, and market incumbents: established banks that are introducing mobile software to complement their traditional services.

Advantages of building mobile apps for banking

Mobile banking is becoming mainstream: clearly, it is not a fleeting trend. Apart from staying competitive, the other pros of mobile app development for businesses include the following:

  • Extended pool of users. With a total number of smartphone users predicted to surpass 7 billion in 2021, mobile banking is set to become an extremely lucrative segment. Currently, there are over 130 million and 75 million people using mobile banking in the US and the EU respectively. Obviously, this number will increase as the digitization expands.
  • Great ROI potential. Building custom apps for mobile banking is expensive, but it also guarantees robust returns on investments. Not only does the growing number of users account for the overall profitability of building apps for banks, but also the cost reduction that it helps to achieve. With companies no longer required to open physical offices and hire personnel, the digitization of banking services can immensely prove to be financially effective.
  • Excellent source of user-related data. A mobile banking app is a treasure trove of miscellaneous data that businesses can use to get insights into customer behavior, improve existing features and introduce new services. Otherwise, banks would have to invest in running customer surveys or think of alternative ways to measure feedback. Fintech tools offer them access to all the user stats and behavior patterns they need to propel their business goals.
  • New marketing channels. A mobile banking app is an additional medium for advertising new features and services. Through UI notifications, ads can be delivered in a subtle, non-intrusive way. Apart from your company announcements, you can also display the in-app ads of your partners and affiliates.

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Mobile banking app features

Here’s an overview of features you should introduce, if you’re wondering how to build a mobile banking app:

Basic features

Every app delivers a different experience, yet there are features, which are an absolute must for all mobile banking apps, regardless of their specifics.

Mobile banking security protection

In the finance sector, security comes first. Use means like two-way authentication and encryption technology to ensure safety, also, ensure that your app’s servers are securely protected. Additionally, you may go for more advanced data-protection methods like biometrics.

Basic operations and transactions

The basic features of a banking app include

  • paying bills,
  • checking balances,
  • transferring funds,
  • viewing transaction histories, and
  • making deposits.

Data on each transaction should be presented in a clear and attractive format.

Custom alerts

Notifications are, generally, welcome and even necessary, but can become irritating, if sent too often. Allowing customers to decide which notifications they prefer to receive and how often will help you create the ultimate user experience.

Offline mode

Enabling your solution to operate in an offline mode can be highly relevant  – especially for people with poor or unstable internet access. Making your app work in different environments is now a golden standard for banking app development.

Geo-location

Integrating your app with geo-location services can help your customers find an ATM or bank office in the vicinity. Suggesting the offices and services of your partners and affiliates close to the user’s area of residence is also an excellent idea.

24/7 support

Last but not least, your banking app should enable users to quickly contact customer support, if necessary. Some users prefer talking to chatbots, some to human assistants. You may leverage both approaches interchangeably, for example – having a chatbot answer simple questions, and forwarding complex queries to human assistants.

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Extra features

To gain a pool of loyal users, your application has to stand out. If you intend to create a unique mobile banking service, consider adding some extra features, such as the following.

Personalized finance management

People will surely appreciate some valuable advice on how they could manage their finances. Adding savings and budgeting tips to your mobile banking app can be a great idea. Offering personalized financial advice will add value to your banking solution.

Additional options

Consider including investment analysis and insurance tips into the functionality of your banking solution, in order to extend your range of features. This may also help you attract a pool of finance savvy users and extend your customer base.

Integration with wearables

The trend towards building software for wearables is on the rise now, so you may just as well make some features accessible through a smartwatch. Sending custom notifications directly to the user’s smartwatch screen can be a perfect way to enhance your app.

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How to create a secure mobile banking app

Mobile banking app security is paramount. In fact, mobile banking security issues are exactly why many customers may refrain from using mobile apps for banking: because of security concerns, they feel they can’t trust their highly sensitive data to servers and devices vulnerable to hacker attacks.

Below is our guide to building a secure banking app that will combine reliability with ease of use.

Step 1: Conduct market research

Put simply: you need insights into the recent market trends to build an excellent product. Seeing the big picture may help you create a solution that is both timely and relevant. For example, some of the biggest mobile banking trends for 2021 include:

  • biometric authentication, 
  • using voice tech to process payments, 
  • cardless cash withdrawals, 
  • personalization, 
  • ML and chatbots, and 
  • using big data for fraud prevention. 

Keeping abreast of the emerging trends will help you become aware of how people manage their finances, and make your app ready for the upcoming technology shifts.

Step 2: Target audience analysis

Your next step will include identifying the type of people that will be using your banking app. Understanding their income and demographics will ensure that your solution caters to their needs.

The more you know about your audience, the better – detailed insights into their preferences will help you introduce exclusive app features and stand out against competition. Different audiences will also prefer different marketing channels, so knowing your customers will also help you in promoting your app.

Step 3: Competitor research

At this point, you are ready to identify competitors that target the same market segments. Studying their offerings, features, marketing and communication channels will help you come up with a better mobile app idea. The key is to find out what your competitors may be overlooking, and offering your audience exactly what they are missing.

fintech-market

For example, as of 2021, the best mobile banking solutions are:

Bank of America

Bank of America is an established bank with its app rightfully among the leaders in the digital banking segment. The app has impressive security protection – it instantly notifies you about any transaction that looks suspicious and leaves it up to you to approve or decline it during 60 days. Additional features like local cash-back opportunities and brokerage account integration are also included.

Ally Bank

Ally Bank is digital only and has no physical representation. Yet, its namesake app has everything you can possibly expect from a mobile banking app, including a secure fingertip login. A full array of traditional services, plus integration with Zelle for money transfer are some of the features that help Ally Bank build and retain a solid user base. On top of that, Ally Bank enables customers to monitor stock market trends directly from their app.

Wells Fargo

Wells Fargo is a banking sector incumbent that has been there ever since 1998. Wells Fargo banking app boasts a wealth of features and enables customers’ access to a range of company services – from a balance check to personalized financial planning.

The company has arguably the largest ATM network in the United States. Its banking app is widely known for such a fancy feature as a text input: you can actually use the old-fashioned text commands along with the novel face and touch authentication.

Step 4: Focus on regulations and compliance

Banking is a highly regulated segment in most countries, so you have to make sure your app is fully compliant with laws and regulations of countries and/or states it will be operating in. For example, if your app operates in the EU, ensure its compliance with regulations like GDPR, SEPA, PCI DSS and PSD2. Compliance can be vital for your business in general, so focus on meeting the regulatory standards before you start building your app.

Step 5: Ensure security

Needless to say, your solution should provide excellent security. Mobile banking apps security issues could be a major turn off for prospective users for obvious reasons: if they have to trust their credit card numbers and other classified information to a banking app, they have to be sure it’s adequately protected.  Introduce features that will help ensure the security of your app:

  • multi-factor authentication;
  • advanced encryption technologies;
  • behavioral analytics; and 
  • real-time alerts about any activity that takes place in users’ accounts

 Also, make sure your app can easily incorporate all changes and new rules from the central banks.

secure-banking-app

Step 6: Build attractive UX/UI

User experience matters – in fact, an attractive user interface may be exactly the reason why users will choose your app over others.

Build UX/UI with focus on the latest trends:

  • AI-based voice assistants: this combination of two recent trends – virtual assistant and touchless interactions will enhance your app usability.
  • Easy authorization: the use of biometrics will help your app recognize users instantly, without requiring them to enter a password. Still, critical functions like changing credit limits and large sums transactions shall require more complex authentication procedures.
  • Effortless account management: fast and convenient tracking and management of any account activity through a sleek modern interface.

Step 7: Enhance your app with integrations

Integrating third-party services and solutions is an attractive feature that will help your app stand out. Zelle, for example, helps customers transfer money to any other banks used by their counterparts. Services like Docusign, help users create digital contracts and agreements and sign them directly from an application interface.

Step 8: Create and test a prototype

The next important step in your app development cycle is creating and testing a prototype. Your goal at this point is to attract investments and test your idea with the target audience. Be ready to listen to feedback, and to incorporate the necessary changes before you actually start building the final version of your app.

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Final thoughts

With the global mobile banking market share growing at a CAGR of 12,2%, the prospects for mobile banking solutions development look brighter than ever. The competition is fierce, though, since many startups are willing to explore this market segment.

On top of that, building a mobile banking app that would meet all the regulatory and security requirements can be challenging because of the level of effort and expertise it involves. Establishing a partnership with a reliable app development provider is key to building a fintech solution with excellent usability and security-protection.

Looking for an experienced development partner to help you build a solution for mobile banking? Schedule a free consultation with fintech development experts at Eastern Peak!

Frequently Asked Questions

What is a mobile banking app?

Mobile banking app is software offered by a financial company, providing customers with remote access to core banking services: transaction monitoring, money transfer, balance checking, digital payments, etc.

How much does it cost to develop a banking app?

Your expenses will vary depending on features you want to include. It’s best to start with the Product discovery phase to determine the development cost, and the complete feature set.

How to secure a mobile banking app?

Use the latest data protection methods such as data encryption, biometric authentication, and user behavior analytics. Ensure regulatory compliance and keep abreast of the latest data protection technologies to introduce timely updates.

Do I need to build a banking app for iOS, Android, or both?

Both, but consider the customer niche you want to target and choose an OS based on their preferences.

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