All the expenses you need to know


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internet banking
(© Worawut – stock.adobe.com)

The number of people transacting online all over the world has increased in recent years. Brick and mortar bank offices are slowly becoming a thing of the past as most financial transactions are done online. This shift to mobile banking has elevated the fintech industry due to the rise of multi-functional applications that make the niche competitive.

The development of mobile banking applications has become popular in recent days. To build one from scratch, the first thing you need to do is assess the costs. We will look at different factors that influence the cost of developing a banking app and calculate the expense of developing a fintech app.

What is a banking application?

It is a simple mobile application that allows customers to access their bank details and perform transactions directly from their mobile devices. The range of functionality of a banking application depends on the banking institution and the functionality of the application.

Here are some classic features that you will get from mobile banking apps:

  • Payment planning
  • Authorisation
  • Pay bills
  • View card information, transaction history and current balance.
  • Opening a new account and ordering a new card
  • Initiate secure person-to-person transfers

These are the basic features of a mobile banking app. However, with the rapid transformation and competition in the industry, additional features will enhance your application’s position in the market. These include:

  • Cash back service
  • QR code scanning
  • Reservation of third-party services
  • Integration of one-click payment methods (Google Pay, Apple Pay)
  • Split bills (allows groups to share their bill when they have dinner or drinks together)

What affects the cost of developing a banking application?

Total application costs also include post-release costs such as marketing, customer support, and other expenses unrelated to actual development (design, testing, analysis, and management).

The cost of developing a banking application depends on four main factors. They understand:

  • The complexity of the application. The number of features and their complexity can affect development costs to some extent. If you start by developing an MVP, you will part with half the price of a product to scale.
  • Technology stack used in the development of banking and financial applications. The choice of APIs, programming languages, and libraries also affects the cost of developing a banking application. Some apps require particular programming languages ​​and skills that replace a classic approach, although most app developers opt for native languages ​​(Kotlin for Android and Swift for iOS). For example, most developers prefer Java in financial technology because of the cross-platform capabilities and improved security. Ruby on Rails is also picking up due to its high storage database.
  • Location of the development team. Another determining factor is the geolocation of the development team. A perfect example is how developers in the US charge around $ 100 to $ 150 per hour, while you can pay $ 20 to £ 30 per hour if you outsource development services to India.
  • Type of cooperation. There is a big difference between the cost of hiring an in-house team and hiring independent services. The cost of independent services is relatively lower, but there are many risks to the quality of the code.

Main characteristics of a banking application: Time and costs

Let’s take a detailed look at the costs and time required to build the basic functionality of a banking app.

Connection (authorization)

Registration and authorization are the starting point for any request. These procedures must meet the necessary security standards (2FA, passwords and other biometric controls)

  • Approximate time required: 480 hours
  • Approximate cost: $ 48,000 to $ 72,000

Access to card details

Users of the banking app need access to all of their essential information such as balance, card numbers, account details, payment system, and their name. This functionality may also include card related services, such as card reissue.

  • Approximate time required: 240 hours
  • Approximate development cost: $ 24,000 to $ 36,000

Transactions and payments

Sending and receiving money should be intuitive, secure and easy. Users must confirm transactions either by SMS code, biometric verification, or by entering their password.

  • Approximate time required: 480 hours
  • Approximate development cost: $ 48,000 to $ 72,000

Transaction history

Users of the banking app should also have access to their spending history from their linked bank accounts. The report should be detailed for a better user experience.

  • Approximate time required: 240 hours
  • Approximate development cost: $ 24,000 to $ 36,000

Expense analysis

This feature is still included in most banking apps to help users assess their financial behavior and set new financial goals. The functionality always includes custom reports, budget categories, and savings goals.

  • Approximate time needed: 240 hours
  • Approximate development cost: $ 24,000 to $ 36,000

Notifications

Notifications are essential in mobile banking apps, as they alert users to transactions, special offers, and required authorization.

  • Approximate time required: 120 hours
  • Approximate development cost: $ 12,000 to $ 15,000

Customer support with an in-app chat function

Must be available 24/7 to quickly help users resolve issues. It is best to use a combination of voices or chatbots, which will take care of handling typical requests. While living and trained specialists will solve atypical problems and tasks.

  • Approximate time required: 480 hours
  • Approximate development costs: $ 48,000 to $ 72,000

In summary

The total time required for the overall development of the banking application is 2,280 hours and the total costs range from $ 228,000 to $ 342,000.

Additional Features of a Banking Application: Time and Costs

We have reviewed the time and costs of developing a basic mobile banking app. Now let’s see what additional features you can add.

QR code scanning

Over 27% of banking app users in the US and UK prefer to use a QR code as a method of payment. This is according to Statista’s findings. Including this functionality in the development of your banking application guarantees fast and secure payments.

  • Approximate time required: 120 hours
  • Approximate development cost: $ 12,000 to $ 15,000

Cash back service

This is one of the best features among the different users. This feature allows them to recover a certain amount of money spent. The developers define several categories of cashback and also allow placing returns on a different account.

  • Approximate time required: 240 hours
  • Approximate development cost: $ 24,000 to $ 36,000

One-click payment methods integration (Apple Pay, Google Pay)

Integrating

Google Pay and Apple Pay are essential for high payment conversion and better usability, especially now that one-click payment methods have taken over.

  • Approximate time required: 480 hours
  • Approximate development costs: $ 48,000 to $ 72,000

Blocking third-party services

This is another effective feature that is usually part of the development of mobile banking apps. It is generally intended to improve the application. Adding this feature allows users to book hotels, purchase tickets and more without leaving the app.

  • Approximate development time: 480 hours
  • Approximate development cost: $ 48,000 to $ 72,000

Split invoices

It is a feature that makes routine transactions very convenient. You don’t have to worry about paying off your debts when dining out or having drinks with friends in hotels or restaurants. Everyone will take their share.

  • Approximate time needed: 480 hours
  • Approximate development cost: $ 48,000 to $ 72,000

ATM and office locations

This feature makes it easy for banking app users to find bank branches and ATMs that are closest to them. Developers usually integrate Google Maps and other GPS tracking features like Apple Maps for iOS or Android to enable this functionality.

  • Approximate development time: 120 hours
  • Approximate development cost: $ 12,000 to $ 15,000

In summary

The total time required to develop additional functionality for a banking application is 1,920 hours and the total costs range from $ 192,000 to $ 282,000.

Security fees

Increasing the level of security should be a priority when developing a banking application. You should reserve a separate section in your app development workbench for future banking app security issues. Another element that you should pay attention to during the development process is the use of the latest technology to ensure the security of the data and transactions stored in the application. Here are some steps that will help you to strengthen the security of the banking application.

  • Risk-based authentication
  • Use of biometric data
  • Limited session duration
  • One-time passwords for confirming user identity
  • Password verification implementation (to avoid situations that are too short and simple)

You should understand that the price of various security features differs depending on the integration and development time required and the type of technology used in a solid feature.

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