Mobile Banking App Development: Trends, Overcoming Challenges and Solutions

According to Statista, global mobile payment get approximately 2.8 billion users worldwide in 2023. As digital payments have become more widespread, the field of mobile banking app development has also evolved to keep pace with the new trends. 

From contactless payments to the integration of artificial intelligence, today’s mobile banking apps offer a wide range of innovative features. In this article, we take a look at the key trends in payment apps in 2024 and offer a solution for streamlining mobile banking app development.

Trends in mobile banking app development

Current market trends

Mobile banking is becoming increasingly popular, with nearly half of U.S. households now using it. This trend is particularly strong among younger generations and those with higher education levels. For example, almost three-quarters of 15- to 24-year-olds use mobile banking, and nearly 48% of college graduates do the same.

A full-fledged platform

Nowadays a mobile banking app should not be just another finance application in the sea of available options. It should serve as a complete solution that meets all the financial needs and requirements of your users.

This means offering a wide range of features such as account management, bill payments, fund transfers, investment options, budgeting tools, and even access to additional financial products and services.

Biometric authentication to use the app

To ensure the security of your financial information and bank balance, the future of mobile banking software development is focused on the increasing use of biometric authentication in mobile applications. 

Instead of logging into the banking app with PINs or passwords, users are expected to use their fingerprints via the smartphone touchpad. However, this also requires fingerprint-compatible devices.

Voice banking allows customers to interact with their mobile banking apps using voice commands. 

However, security concerns have arisen due to a previous incident involving a data breach related to voice banking technology. Read this article to learn why voice cloning technology can be dangerous.

Modern and intuitive UX/UI app design  

According to McKinsey & Company, businesses that prioritize customer experience and design have 10-15% revenue growth over their competitors, which is why it’s important to offer a convenient and user-friendly app.

Nowadays, usability is one of the most important components of iOS or Android banking app development. 

Real-life example

Venmo, a mobile payments app, modernized the look of the app itself, which was a bit outdated and cluttered. The user interface was redesigned, the font was updated and a lot of white space was added to make it look fresh and clean.

Source: Venmo 

Check this article to explore key principles or UX design for financial app development. 

Cardless ATM withdrawal

The concept of contactless interaction with ATMs has emerged as a trend, revolutionizing the traditional use of mobile banking.

Such integration with ATMs facilitates easy and contactless transactions, posing a real challenge to the traditional in-store banking model. The common approach to cardless ATM withdrawals is to use QR codes scanned on mobile devices via the banking app.

Customer personalization based on data

By analyzing a user’s transaction history, financial habits, and preferences, mobile banking apps can provide personalized product recommendations, budgeting insights, and investment options. This not only increases user satisfaction but also builds trust and loyalty.

Real-life example

A great example of personalization in mobile banking app development based on data is Spotify. By analyzing each user’s musical preferences, Spotify compiles a personalized playlist of previously undiscovered tracks that fit the listener’s favorite genres.  In this way, Spotify keeps its users coming back regularly, offering them an ideal platform for continuous music discovery.

Gamification

Gamification for mobile banking app development involves the use of game design techniques in a non-game context to encourage customers to use your app for a long time. For instance, many fintech apps offer rewards (such as money or points) for users who perform certain actions.

Read our article on FinTech app development to explore how to develop a future ready payment application.

Real-life example

Revolut, for example, offers a rewards system where users earn points for making transfers and payments. These points feed into a leaderboard that shows your progress compared to top users and your friends.

Points can be used to enter a weekly draw to win cash prizes ranging from €1 to €10,000, encouraging participation and activity in the app.

The higher the interactivity of your app, the better the user experience and the higher the customer retention. Features such as loyalty programs, cashback, and rewards will further engage users with your banking app.

Future outlook

The future of mobile banking seems promising, and further growth is expected. 72% of U.S. consumers prefer to manage their finances online or through a mobile app, signaling a strong shift toward digital banking solutions. This trend is likely to accelerate as more advanced features and enhanced security measures are implemented in mobile banking apps.

Benefits of mobile banking apps

Benefits for users

Mobile banking apps offer numerous advantages to users, including:

• 24/7 access to banking services
• Convenience of managing finances on-the-go
• Real-time account updates and notifications
• Easier budgeting and expense tracking
• Faster and more secure transactions

Benefits for banks

Banks also reap significant benefits from mobile banking apps:

• Reduced operational costs
• Improved customer engagement and loyalty
• Enhanced data collection for personalized services
• Increased cross-selling opportunities
• Expanded customer base through digital channels

Features of a mobile banking app 

To compete in the rapidly evolving fintech landscape, payment companies need to adapt their functionalities with newer, digitally enabled features that customers now expect as must-haves. Below we highlight the main features for mobile banking app development:

Must-have features:

• Account management: users should be able to view their account balances, transaction history, and account details.
• Fund transfers: the ability to transfer funds between accounts, pay bills, and make peer-to-peer payments is essential.
• Security: Robust security features, including login credentials, encryption, and biometric authentication.
• Bill payment: Users should be able to pay bills, schedule recurring payments, and manage payees easily.
• Customer support: Access to customer support through the app.

Nice-to-have features:

• Budgeting tools: expense tracking, budgeting, and spending analysis.
• Mobile wallet integration: integration with mobile wallets like Apple Pay, Google Pay, or Samsung Pay for contactless payments.
• Multi-currency support: for users who have accounts in multiple currencies.
• Personalization: customizable interfaces and personalized product recommendations based on user data.

Advanced features:

• Investment management: investment tracking, trading, and portfolio management within the app.
• Cryptocurrency integration: the ability to buy, sell, and manage cryptocurrencies within the app.
• Open banking APIs: Integrating with third-party financial services for a broader financial overview.
• Voice and chatbot banking: advanced AI-driven features for voice-controlled banking and chatbots for customer support.
• Real-time payments: integration with real-time payment systems for instant fund transfers.
• IoT integration: connectivity with Internet of Things devices to provide real-time financial updates.
• Crypto wallets: With the rising popularity of cryptocurrencies, some mobile banking apps now include integrated crypto wallets. This allows users to buy, sell, and store digital currencies in addition to managing their traditional bank accounts.
• AI-driven chatbots: These chatbots offer instant customer support, answer queries, and can even provide financial advice. They improve user experience and reduce the workload on human customer service representatives.

Read our comprehensive guide to P2P payment app development to explore how to create a mobile payment app that stands out.

Mobile banking app development process by steps

Step 1: Project planning and research

The team establishes clear project goals, identifies the target audience, and outlines the project scope. It is also important to conduct a competitive analysis and review industry regulations.

Step 2: Design and prototyping

During the design and prototyping phase, a lot of attention is paid to the design of the user interface of the mobile banking app. This includes the creation of wireframes and mockups that serve as blueprints for the layout and design of the app.

Step 3: UI/UX design

In the UI/UX design phase, the released prototypes serve as the basis for designing the visual identity and user experience of the mobile banking app. This phase is crucial for developing smartphone banking apps that not only meet functional requirements but also have an intuitive and user-centric interface.

Explore our latest article on digital payments to examines common payment methods, trends and technologies.

Step 4: Development

During the development phase, both the front-end and back-end components of the mobile banking app are crafted. The process includes core features development like account management, fund transfers, and security measures.

Step 5: Testing

This step includes functional testing, performance testing, and security testing. The technical team must test the app on different devices, operating systems, and screen sizes to ensure compatibility. They must also address any bugs or issues that arise during testing.

Step 6: Security assessment

The main objective of this step is to identify and eliminate potential vulnerabilities and ensure the protection of user data. This process includes the implementation of encryption, secure APIs and robust authentication mechanisms to strengthen the app’s security infrastructure. 

Step 7: Deployment

In the deployment phase, the mobile banking app is ready for distribution and reaches its target group via platforms such as the Apple App Store  for iOS apps and the Google Play Store for Android banking apps.

This step ensures that the app meets customers needs and provides a seamless experience for users.

Streamlining mobile banking app development with pre-developed solution

Banking software development is a complex and time-consuming task, involving many steps from design and development to testing, security, and compliance. 

That’s why developing a mobile banking application from scratch requires significant resources and can be quite daunting. However, pre-developed solutions can significantly speed up this process, saving your time and resources. 

SDK.finance provides a pre-developed FinTech Platform for mobile banking app development. With our software, you get a ready backend with a robust API layer – for faster launch and effective scaling. The system not only speeds up the development and deployment, but also helps you cut down on the team resources and costs of developing a digital payment app.

SDK.finance mobile banking app features:

• Accounts storing any currency/assets
• Bank payments
• Borderless transfers
• Popular payments
• Spendings visualization
• Currency exchange

Thanks to its adaptability and flexibility, our mobile banking platform is suitable for various industries and business types, from e-commerce and telecom to the gaming industry.

Key challenges of developing a mobile banking app

Regulatory compliance challenges

The financial sector is subject to a complex and constantly evolving regulatory landscape. Navigating through various national and international regulations, such as GDPR, PSD2, and KYC/AML requirements, requires careful consideration and expertise. In this article you can find more information about payment regulations. 

Security protocols and data protection

Both iOS and Android banking app development requires not only a deep understanding of financial regulations, but also robust security. Implementation of state-of-the-art encryption mechanisms to protect sensitive user data during transmission and storage. Robust encryption protocols, such as SSL/TLS, protect data from unauthorized access.

Cyber threat prevention includes continuous monitoring, penetration testing and the use of security best practices to reduce the risk of data breaches, hacking and other cyber attacks.

User experience and interface design

Designing an intuitive and user-friendly interface is crucial to increase user engagement and satisfaction. Users should be able to easily navigate the app, access key features and complete transactions with minimal effort. 

The app should also adapt to different platforms and offer a consistent experience so that users have the same range of functions and convenience regardless of the device used.

Integration of diverse financial services

The integration of a wide range of banking services, including transfers, bill payments, and account management, consolidates your app into a comprehensive, feature-rich platform. 

In addition, the seamless integration of third-party services such as payment gateways, investment platforms, and insurance providers offers users advanced functionality, increasing the value of your mobile banking application.

The SDK.finance partner ecosystem consists of world-class providers, including Marqeta for card issuance and digital identity solutions, Corefy for streamlined payment gateways, Mastercard Gateway for efficient payment processing, and Currencycloud for comprehensive foreign exchange services, among others.

Scalability

A scalable application can handle increased data volume, user traffic, and transaction requirements without compromising performance or security. 

SDK.finance provides a highly scalable banking foundation that can grow with you and handle the increased transaction volume without hiccups. Whether you process ten, ten thousand, or ten million transactions per day, our Platform can cover it. 

Now, let’s embark on a tour of SDK.finance’s demo, where we’ll witness firsthand how this platform empowers developers to build powerful mobile payment and digital wallet apps faster, ushering in a new era of financial innovation and accessibility: