If your business or idea exists in the FinTech space, you’re likely asking yourself, “how much does it cost to develop a banking app?” Internet banking and mobile banking apps have fundamentally transformed the way we handle and transact money. Today, all major banks and financial institutions have mobile apps that offer consumers access to their bank accounts. Mobile payments have also gotten very popular with consumers lately too, and there have been a number of different mobile banking apps developed around this service.
The most popular mobile apps are helpful and provide a valuable service, or they are entertaining. Banking applications are popular with users because they provide a valuable, reliable, and, most importantly, fast way for them to access their money, make payments, and track their finances. There is a lot of opportunity for innovation in the FinTech sector. Consumers today want to have more access to their finances and more knowledge about financial terms and services. How much does it cost to develop a banking app? The most accurate answer is it depends on your mobile banking app. Development cost will vary based on what your banking application needs to do and what regulations it needs to follow.
What is a Banking App?
When someone uses the term banking application, the first thing that will likely come to mind is the mobile banking apps from major banks like Chase, Capital One, or Bank of America. The mobile banking solutions offered by banks, credit unions, and other financial institutions represent one type of mobile banking app. These apps allow users to access their bank accounts, deposit money, transfer money between personal accounts, send money transfers to other bank accounts, and much more. These mobile banking apps hold and transact money. This will be an important distinction to make later on when we look more closely at development costs.
Mobile banking apps like the ones offered by credit unions and banks are not the only apps that get labeled as banking applications. There are other mobile payment apps that make receiving and sending money easy. These apps allow users to send money to friends or family directly from their bank accounts and deposit money into their bank accounts as well. Popular mobile payment apps include apps like Venmo, PayPal, and CashApp. These apps can make splitting bill payments simple and fast. Peer-to-peer mobile payment apps have gotten very popular with users. These mobile apps do not hold money; they act as a passageway for money to flow between banks.
There are other types of FinTech apps that could also be labeled as banking applications. These apps offer users tools to take control of their finances and big data to help them make better budgeting decisions. Expense tracking apps provide consumers with financial knowledge and data about their spending habits and money flow. These mobile apps sync with bank accounts to get accurate data, but they do not hold money or handle money in any way for users. Popular examples of these apps include Expensify, Mint, and Personal Capital. More people want to take control of their finances, and these mobile banking apps help them analyze their spending habits, plan for retirement, and more.
Banking App Development Cost
We’ve taken a look at several different apps that could be labeled mobile banking apps. Each of these three distinct types of app deals with bank accounts, but not all of them conduct Internet banking or mobile payments. The type of mobile banking app you choose to develop will greatly affect how much it costs.
If you want to develop a mobile banking app, like the ones offered by financial institutions like Chase or Capital One, that transacts and holds consumer money in bank accounts, it will cost you at least 250,000 USD to develop. Realistically, this type of mobile banking app will likely cost more than 500,000 USD to develop and could easily cost more than one million dollars.
The reason this type of mobile banking app is so expensive to develop is that you not only need to create a great User Experience and User Interface, but you also need to comply with a number of different regulatory bodies and requirements. In the United States, for example, your banking application would need to be compliant with all of the following federal regulators:
- Federal Reserve
- Federal Deposit Insurance Corporation (FDIC)
- Office of the Comptroller of the Currency (OCC)
- Consumer Financial Protection Bureau (CFPB)
- Financial Stability Oversight Council (FSOC)
In addition to these federal regulators, there will also be individual state regulations that must be met and accounted for too. If you are developing a mobile banking app that holds and transacts consumer money, there will be a number of regulatory guidelines you need to follow no matter what country you intend to operate in. These costs do not even take into account the annual cost of maintenance and security, which we will look at in more depth later.
Maybe your banking app doesn’t need to hold money, but you’d like your mobile app to allow users to send money to one another from their bank accounts. Mobile payment apps have fewer regulatory issues to contend with, and they will have fewer features like check scanning. Still, developing a mobile payment application will likely cost upwards of 250,000 USD and could even cost more than 500,000 USD depending on the User Interface and specific features of the app.
The development costs remain high for mobile payment apps because money is still being sent between users, bank accounts need to be accessed and integrated, and federal and local regulations still need to be met.
Expense Tracking Apps
Your app doesn’t necessarily have to be an expense tracking app; this is just an example of a mobile banking app that doesn’t have to send or hold money. If you do not need to send money between users or hold money in user accounts, you can seriously reduce the banking app development cost. The specific costs will depend on the complexity of your app, but you will likely save yourself hundreds of thousands of USD in development costs if you don’t need to actually send or hold money. Your banking application could be created for less than 100,000 USD depending on the design and features of the app.
What is the Cost of Maintenance?
Maintenance and security are major concerns in the banking sector. FinTech apps require ongoing maintenance to ensure that there are no major bugs or security issues that will affect the user’s money or bank account information. If your mobile banking app is sending, receiving, or holding money for users, your annual maintenance costs will easily be six-figures. Depending on the size of your user base, the complexity of your application, and the amount of information you have access to, your annual maintenance costs will vary.
Maintenance costs are expensive because ensuring a quality, safe, reliable User Experience is one of the most important aspects of a mobile banking application. If customer data is compromised in any serious manner, your entire business could be ruined. That is why FinTech companies invest heavily in preventative maintenance measures to ensure their app and users are secure.
Is it More Cost-Effective to Hire a Development Partner or Internal Staff?
For FinTech startups and small businesses, it will be far more cost-effective to hire a development partner to help you develop a mobile banking app. Salary costs for just a couple of internal developers would quickly surpass the initial banking app development costs we went over earlier in the piece. Over time as your business grows and your mobile banking app becomes more popular, it may make more financial sense to internalize some or all of the development positions. Even after your business gets large enough to hire internal development staff, you may find that partnering with a development partner is still in your best interests to access state of the art tools, industry expertise, and sound advice.
Until your mobile banking app gets big enough to require full-time internal development staff, partnering with a development company will help you reduce costs, access a team of skilled developers, and gain valuable industry insight and experience.
Final Thoughts on the Cost of Mobile Banking App Development
The costs of developing a mobile banking app can be quite high due to the complexity of legal regulations and app features. You might have seen the estimated costs of development and got discouraged. What you need to ask yourself is, “does my app require money to be held or sent?” Can some form of your app idea work without needing to send or hold the user’s money?
If you can start your banking app idea without user money being sent or held, you can get to market a lot quicker and a lot cheaper. There is a lot of space in the FinTech sector to innovate and create mobile apps that help consumers take control of their finances. Just because you don’t start with payment features initially does not mean that you cannot add them later when your brand and app become more established in the marketplace.
Speak with an app development partner to help you work through your idea. They can help you determine what your core service is, how to get it to market quickly in a cost-effective manner, and how you can set yourself up for future growth and success.
Internet banking will only become more prevalent as technology advances. Even major financial institutions like Capital One are moving away from brick and mortar branches in favor of Internet banking. Mobile banking apps come in many shapes and sizes, and the development costs vary accordingly.