If you want to know how much Neobank app development costs. You have come to the right place. Neobanks have transformed the way of traditional banking services. Innovative digital banks that operate solely online by offering streamlined services through user-friendly mobile applications.
As more individuals seek convenient and personalized banking experiences, NeoBanks has quickly gained popularity worldwide.
Moreover, NeobBanks is the future of banking. They are agile, tech-savvy, and relentlessly focused on delivering exceptional user experiences that meet the evolving need of customers.
However embarking on the journey of creating a NeoBank , it’s crucial to understand the associated costs and investment required.
Neobanks are challenging traditional banks by offering a user-centric, digitally-driven banking experience that resonates with the demands of today’s consumers.” – Ron Shevlin, Director of Research at Cornerstone Advisors
According to Gartner, 30% of high-revenue banks will launch BaaS (Banking As a Service), such as NeoBanks, to generate a new income stream by the end of 2024.
For instance, a UK-based Neobank, namely Zopa, has recently raised $93M in its latest round of funding and now has a $1B+ valuation.
As per the latest reports from Grand View Research, the global market for neo-banking was valued at $66.82 billion in 2022 and is expected to witness a CAGR of 54.8% from 2023 to 2030
Going through all of this data, it shows unending opportunities in this segment. So now is the right time to invest in the NeoBank app development.
In this blog, you get to know the cost of building a Neobank and provide valuable insights into the financial aspects of Neobank app development.
What is Neobank App Development?
Neobanks, also known as digital banks or challenger banks, are financial institutions that operate exclusively online without any physical branches. They provide banking services and products primarily through mobile apps or websites. Neobanks are often characterized by their user-friendly interfaces, innovative features, and agility in adapting to customer needs.
Usually, they perform financial transactions and perform banking functions independently.
Now, if you are planning to start fintech app development and consider Neobanks as one of the options. It’s easy to launch a Neobank as it doesn’t require the physical office to get clients. The main focus to create a neo banking apps is that you meet the requirements and needs of the potential customer base.
David Brear, CEO and Co-founder of 11:FS says about Neo Banks-
Neobanks are rewriting the rules of banking, putting the power back in the hands of customers with seamless digital experiences and personalized financial solutions.”
Today, in the USA Neobank account holders are 13.7% of the population and it is expected to reach 20% by the end of 2025.
For opening a Neobank account- All you need is a solid wifi connection, ID, address proof, and proof of employment. Let’s look at some key features of the Neobanks.
Here are some key features and characteristics of Neobanks:
- Digital-First Approach
- Branchless Operations
- Agility and Innovation
- Enhanced User Experience
- Focus on Financial Inclusion
- Partnerships with Traditional Banks
These are the key features that you can include in your Neobank, let’s look at the popular Neobank app in 2023
Popular Neobank Apps In 2023
We know that NeoBank provides better financial services than traditional banks. We have created a list of popular Neobanks that shows you a clear picture of fintech apps.
Here is the list of popular Neobank apps in 2023.
Chime
It is a fintech app that provides banking services free of cost. It is a US-based Neobank that focuses on providing a simple and fee-free banking experience.
Moreover, it offers features like early direct deposit, automatic savings, and a roundup feature that helps users to save money with each transaction. Plus, users can access around 60,000 ATMs for free.
With Chime, you can avail of fee-free overdraft facilities up to $200. The best thing about Chime is it provides automatic saving features. With this feature, users can easily set up automatic transfers to their savings accounts with each paycheck.
| Pros | Cons |
| Personalized notifications, alerts, tutorials, user interface, pricing, and payments | Limited brand and ATM network |
| Fee-free banking | No physical bank branches |
| Early access to direct deposits | No joint accounts |
| Automatic savings feature | Limited cash deposit options |
| Real-time transaction notifications | Limited customer support options |
| Chime credit builder program | No paper checks |
| Overdraft protection with SpotMe feature | Limited international features and services |
Moneylion
It is a fintech company that offers a range of financial products and services to help individuals manage their money and improve their financial well-being.
Moreover, It provides finance, mobile banking, cash advancement, and many more, making it a top loan lending app. It offers personal loans with competitive interest rates and flexible repayment terms. These loans can be used for various purposes such as debt consolidation, home improvement, or unexpected expenses.
Furthermore, it has a reward program called, “Lion’s Share” that allows users to earn cashback rewards on their everyday spending. These rewards can be used to offset fees, redeem gift cards or invest in their MoneyLion investment accounts.
| Pros | Cons |
| No overdraft, insufficient funds, or foreign transaction fees | A small amount of loan is not valuable |
| 55000+ Fee free ATMs nationwide | No dedicated financial planner or advisor |
| Lending a loan is easy | Some investment options may have high fees |
| Cryptocurrency features & prizes are available | Limited availability outside of the US |
| An integrated financial service platform | Limited branch and ATM network |
| Customizable investment portfolios | Limited customer support options |
Current
When you want to enhance your management skill, Current is the option to go. It is aimed at making saving, spending, and money management better. The banking partner is a member of FDIC- Choice Financial Group.
Moreover, it offers basic and premium plans for different age groups. With Current users can set their kid accounts and set their budgeting limits. Plus, other features include high saving interests, early paychecks and reward like cash backs and points, privacy controls, etc.
| Pros | Cons |
| Offer backend supervision | The premium cost is higher |
| No monthly fee | Poor customer support |
| Shopping at participating stores can give rewards | The documentation and verification process is complex & overwhelming |
| Easy finance tracking makes money management seamless | One kid account management becomes pricy |
Revolut
It provides a digital banking platform that aims to offer a range of convenient financial services. Revolut apps allow users to manage their money, exchange currencies, make payments access additional features.
Moreover, it provides real-time currency exchange at competitive rates and users can convert funds between different currencies conveniently.
Plus, it has features that help you with splitting bills and requesting payments. Its additional features offer budgeting tools, spending analytics, cryptocurrency trading, and insurance options.
| Pros | Cons |
| Convenience mobile banking | Limited customer support |
| Easily manage multi-currency accounts | Freeze account for temporary reasons |
| Competitive exchange rates | Transaction limitations on amounts and currency exchange |
| Fast money transfers to other Revolut users | Limited offline functionality |
| Easily track your budget with budgeting tools | Limited physical branch access |
Monzo
Lastly, Monzo is a digital bank that provides a range of banking services through its mobile app. It is quite famous among users because of its user-friendly interface.
Moreover, it provides a full-fledged current account with a debit card. It allows you to receive payments, make purchases and withdraw cash from ATMs. With every transaction, you will receive a notification and give you immediate updates on your account activity.
The best thing about Monzo is it allows fee-free spending abroad up to certain limits making it convenient for international travelers.
| Pros | Cons |
| It offers a user-friendly interface | Limited branch access |
| Sends real-time notification | Gives you limited savings options |
| Spending insights and budgeting tools | Limited cash deposit options |
| Fee-free foreign spending | Provides limited customer support |
| It has a straightforward fee structure | Limited product offerings |
Feature To Include NeoBank App
When you start Neobank app development it provides benefits for users and businesses. If you want to create an e-wallet app, include these features in your application.
Secure transactions and data storage
When you build ewallet application, the first thing that comes to mind is financial security. The application must protect user data from fraudsters, potential hacks, and data leakage.
Now, the question arises, how to secure customer-stored information?
Technology evolution has made security easy as well as vulnerable. With the increase in cyber-attacks, Neobanks can be highly secured by using biometric verification and data encryption.
Blockchain development has paved the way for high security in the fintech segment.
Opening an account
Neobanks getting a card is essential for Neobanks. It is the main product of financial apps. By opening an account, the user interacts with financial flows, that receive and withdraw money.
With current Neobank you cannot open a virtual account but also receive a plastic credit or debit card. More than 4 million people in the US are using these cards.
Basic financial operations
When it comes to basic financial operations, the most common are money transactions, payment of bills, and taxes.
With this, you can add currency conversions and additional banking products, such as savings accounts or investment accounts.
Push notifications
Whether it’s a P2P payment app, push notifications are a necessary feature of fintech apps. They are great tools to inform users about credit or debit cards and other actions with their accounts.
With these features, users can receive messages from Neobank itself about offers and the latest news.
How To Create A Neobank App?
If you want to mobile banking app development, ask your team of developers to create an application by keeping the banking system design in mind.
Creating a Neobank app is complex to build as it requires high-security features. Here are the necessary steps for creating the Neobank app:
Define project requirements
Before starting the NeoBank app development, you have to define your project requirement. You can do this by questioning –What better services your Neo banks are providing to your user than competitors?
Market research
Now conduct thorough market research to understand your target audience, competitors, and market trends. Start by identifying the needs and pain points of potential users to shape your Neobank app features and value proposition.
Choose tech stack
Select a suitable tech stack for your Neobank app. Consider factors like stability, security, and compatibility with desired features.
Design frontend & backend
Design the UI and UX of your Neobank app’s front end. Create visually appealing and intuitive designs that align with your brand identity.
Simultaneously, develop the backend infrastructure, including servers, databases, and APIs to handle user data and transactions securely.
Integrate payment banking services
Now integrate payment gateways and banking APIs into your Neobank app to enable essential functionalities like account linking, transaction processing, and balance updates.
Testing
Now, conduct testing of your Neobank app to ensure functionality, usability, and security. Perform unit testing, integration testing, and user acceptance testing to identify and resolve any bugs and issues.
Deployment
Prepare your Neobank app for deployment to the respective app stores. Also, follow the guidelines provided by the app stores, package your app correctly, and submit it for review.
Once, approved, your Neobank app will be available for download by users.
How much does Neobank App Development Cost?
The cost of Neobank app development can vary significantly depending on several factors such as the complexity of features, platform compatibility, design requirements, and development time.
It’s difficult to give the exact price without specific project details, but here’s the general breakdown of the cost based on the different stages of app development:
Planning and design
This phase involves gathering requirements, creating wireframes, and designing the user interface (UI) and user experience (UX). The cost can range from $5,000 to $20,000 or more, depending on the complexity of the design and the expertise of the design team.
Backend Development
Building the server-side infrastructure, and APIs, and integrating with third-party services can vary in cost. A ballpark estimate could be anywhere between $20,000 and $100,000, depending on the complexity and integration requirements.
Mobile App Development
Developing the Neobank app for both iOS and Android platforms can range from $30,000 to $150,000 or more, depending on the number of features, complexity, and the development team’s rates.
Security and Compliance
Implementing robust security measures, encryption, and compliance with regulatory standards will involve additional costs. Depending on the requirements, this can range from $10,000 to $50,000 or more.
Quality Assurance and Testing
Testing the app for bugs, performance, and usability can typically range from $10,000 to $30,000, depending on the scope and depth of testing required.
Maintenance and Updates
After the initial development, ongoing maintenance, updates, and support are necessary. It’s essential to allocate a budget for regular updates, bug fixes, and feature enhancements, which can be around 20-30% of the initial development cost per year.
Conclusion
Hopefully, this blog help you in starting your Neobank app development. If you are planning to set up a fintech business you can read our blog and start with your cryptocurren cy app development.
But before you invest in fintech app development, it is essential to start MVP app development. This will give an idea regarding your app requirements and needs. If you want to know more about NeoBanks feel free to contact us.
FAQ
The cost to start a neobank varies depending on factors like services offered, regulatory requirements, technology infrastructure, and compliance. Estimates range from hundreds of thousands to several million dollars.
Creating a neobank app involves steps like defining your business model, obtaining necessary licenses, developing technology platforms, hiring a team, and ensuring regulatory compliance.
Building a neobank from scratch requires market research, obtaining licenses, designing infrastructure, developing software, establishing partnerships, and complying with regulations. Costs vary based on complexity, but can range from hundreds of thousands to millions of dollars.
The cost of building an app depends on its complexity, features, platforms, development time, and resources. It can range from several thousand to several hundred thousand dollars. Consulting with developers or agencies can provide more accurate cost estimates.
Niketan Sharma is the CTO of Nimble AppGenie, a prominent website and mobile app development company in the USA that is delivering excellence with a commitment to boosting business growth & maximizing customer satisfaction. He is a highly motivated individual who helps SMEs and startups grow in this dynamic market with the latest technology and innovation.
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