Cost of Developing a Banking App: All Expenses You Need to Be Aware of
All we usually find online about the cost of developing an app for online banking is that it varies. But that’s not enough when you need to make a budget assessment. That’s why we’ve decided to put together this article with costs based on the projects we’ve recently finished.
This article provides insights into major factors influencing the cost of developing a banking app and gives you an estimated price tag for the specific features of a fintech product.
How the cost of developing an app depends on banking functionality
The number and complexity of features affect the cost of developing an app for banking the most. Take a look at several classic online features provided by most online banks that all users know and expect to have in a banking application:
- Authorization.
- Card information, current balance, and transaction history.
- Secure person-to-person transfers.
- Scheduling payments.
- Paying bills.
- New account or card.
This set of features is enough for a banking minimum viable product (MVP). Launching the app MVP enables you to minimize the cost of building online banking applications.
However, given the pace of industry growth and high competition within the niche, adding extra functionality will help bring your banking solution to the top market positions. Such features are:
- QR code scanning.
- In-app cashback service.
- One-click payment methods (Apple Pay, Google Pay).
- Third-party booking services.
- Splitting bills.
However, the more features you’ll implement, the higher the cost of creating an app for banking will be. We recommend that you start with competitor analysis and the target audience’s research. This way, you will identify what set of functions your product should provide in order to help you fill your market niche and prevent extra development work.
We’ve estimated the costs of each of these features in this article. But before we move on to the specific prices, let’s review the factors that determine the total cost of a new solution.
What determines banking app development cost
To determine the fintech development app estimate cost, you should first take into account the two key aspects — how many hours of work software engineers will need, multiplied by their hourly rates. This is the basis of your total budget expenditures for building a banking solution.
The price of building a banking solution is based on five main factors:
1. Banking software functionality and its complexity
When starting out, delivering the top-priority features in your MVP can cut a banking app development cost significantly compared to shipping a full-scale version right away.
2. Tech stack used for creating bank and finance apps
The budget for releasing mobile banking software depends on the choice of programming languages, libraries, frameworks, and APIs. Banking app experts often use a native approach, employing Swift for iOS and Kotlin for Android.
However, some banking applications demand specific skills and languages that go beyond the conventional stack. Java is also frequently used in fintech due to enhanced security and cross-platform capabilities, while Ruby on Rails is gaining momentum thanks to high storage databases.
It is also possible to cut down the cost of creating an app for online banking by 30–40% through cross-platform development. Our team uses the Flutter cross-platform framework that allows for making robust solutions faster while ensuring native-like performance.
3. Supported platforms and devices
Delivering the product for numerous operating systems and devices may considerably raise an app development budget. Each OS requires a tailored version, increasing complexity and overall expenses. To mitigate the growth of costs, our engineers can write a single codebase for various OSs — for instance, for iOS and Android.
Different screen sizes and resolutions of digital devices lead to additional expenditures due to testing, optimization, and ongoing software maintenance. While broad support extends user reach, it requires careful resource allocation to manage updates and customer experience across platforms effectively.
4. Geography of software engineers
Before you reach out to an IT agency to outsource banking app development services, compare the average salaries of IT experts in various regions. While they charge around $100–150 per hour in the US, a developer’s work hour costs about $20–30 in India. In Eastern Europe, in turn, programmers typically request $25–60 per hour.
Regardless of the price difference, the quality of your fintech solution will still be high if you partner with a trusted banking software development company. In fact, reduced costs of building an app for banking are among the primary IT outsourcing benefits. To choose a reliable IT service vendor, we recommend that you check out vendor portfolios, client testimonials, and ratings on websites like Clutch and GoodFirms.
5. Collaboration model
The cost of developing a banking app differs considerably if you cooperate with in-house specialists or use freelance services. While the latter option tends to cost less, it comes with quality risks.
If you want to make a banking application but lack the necessary expertise, you can boost in-house resources by hiring an IT outsourcing firm. This will also help you cut the cost of building fintech software.
The total costs of online banking app development also cover post-release spendings like customer support and marketing, as well as additional expenses beyond the actual coding activities: requirements analysis, UI/UX design, testing, and deployment.
If you want to know the time and cost for creating a banking app from scratch
Fill the formKey features of a banking product: time & cost of development
Let’s look at the cost and amount of time necessary for delivering core features of a mobile application for a bank or fintech startup. Values are given for the US market.
1. Signup and login
Users start interacting with banking applications when they register and authorize. Both procedures should be in line with finance industry-specific security standards. For example, a banking solution can provide password/email verification or biometric checks like Touch ID or Face ID, which require careful handling of sensitive personal data.
2. Access to card information
The next thing users expect to see in a banking solution is quick access to everything they want to know: card details, balance, cardholder name, expiration date, and account information.
Additionally, the feature set in a banking application may involve card-related services, such as card re-issuing.
3. Transactions and payments
TTransactions and payments are among the fundamental features of a banking app. Today, users are on a first-name basis with the technology, and they need a way to send and receive money online securely and intuitively.
As a rule, users can confirm transactions either by biometric verification, by an SMS code, or by entering the password. It is worth noting that enabling all these methods will not have raise banking app development costs significantly.
4. In-app transaction history
When building a mobile banking app, it is important to provide users with access to the entire spending history from all the connected accounts. The more detailed the report is, the better the user experience is, and the more customer loyalty you win.
5. Spending analytics
Spending analytics helps users analyze and adjust their financial results with the help of budget categories, customized reports, savings, and goals.
Here, a banking software development team should closely cooperate with UX designers to make functional, descriptive charts and diagrams. The feature complexity can also influence the cost of building an app for banking.
6. Notifications
Notifications are another important feature you should include in a banking application. The product has to automatically send alerts and reminders, for instance, about the bills to be paid, transactions made, or taxes.
You will also be able to inform users about special offers via the app. Additionally, it is crucial to allow online banking customers to manage their notification settings, switching them off if they want. As a result, you will boost user satisfaction and loyalty.
To reduce the cost of developing an app for banking, software engineers can utilize APIs, for example, Firebase.
Approximate time needed: 120 hours
Approximate cost: $12,000-15,000
7. In-app customer support chat
Although adding a chat affects the cost of creating an app for banking, this is something you and your customers really want in the app. In fact, the idea of a digital fintech solution is to replace banks and financial organizations where possible, making services more accessible, automating processes, and cutting operating expenses.
Users should have the ability to ask questions, address the required issues, and receive technical support online. To deliver this feature, you can integrate an AI-powered chatbot or let people communicate with a personal bank manager via the banking app.
App with basic features: cost estimate
Now, let’s calculate the basic cost for developing an app for banking:
If you have a mobile banking MVP in mind,
Talk to usExtra features of a banking app: time & cost of development
Since we’ve estimated the approximate time and cost of building an app for banking with a minimum feature set, let’s review some additional functionality you can add to boost customer engagement and maintain competition.
1. QR code scanning
According to Statista, more than 83% of users in West Europe, the USA, China, and Japan preferred QR codes as a payment method in 2021. Include QR code payments in your list of banking app features to ensure fast and secure payments.
2. In-app cashback service
A cashback service is one of the users’ favorite features, as it lets them get a certain amount of money spent back. Mobile app developers in the banking industry generally set several cashback categories and enable placing returns on a separate account.
Providing a cashback service will increase the cost of creating an app for banking but will definitely improve customer satisfaction and loyalty.
3. One-click payment integration
One-click payment methods such as Apple Pay and Google Pay are taking over the world, so their integration is a key step to high payment conversion and maximum user friendliness.
Although adding this feature influences the cost of building an app for banking, today many customers consider it a must-have in fintech software.
Approximate time needed: 480 hours
Approximate cost: $48,000-72,000
4. Third-party booking services
Third-party booking services enable users to buy tickets, book hotels, and make various reservations online. Delivering this functionality, however, considerably impacts the time and cost of developing an app for booking.
We recommend adding this feature if you have a confirmation that potential users really want it. Another option is to include it in the work scope for the next application version.
Approximate time needed: 480 hours
Approximate cost: $48,000-72,000
5. Splitting bills
Splitting bills is a banking app feature that makes routine transactions more convenient. When you’re having dinner with friends in a restaurant, you don’t need to worry about who’s paying the bill and how much you owe them — everyone knows their share and pays for themselves.
6. ATM and office locations
This app feature makes the search of ATMs and bank branches nearby easier. To enable it, mobile banking developers integrate Apple Maps or Google Maps for iOS or Android, respectively.
Approximate time needed: 120 hours
Approximate cost: $12,000-15,000
App’s extra features: cost estimate
Now, let’s have a look at the overall cost of developing extra functionality for a banking application.
Aspects you should consider besides app costs
1. App security
Banking applications store and process large amounts of sensitive data, including card details, transaction data, and personal information. That’s why data security and confidentiality are paramount when it comes to protecting any mobile financial solution.
To ensure your banking app remains secure, you should create a distinct section of the roadmap devoted specifically to security issues. It is also advisable to plan out the budget for additional measures like incorporating recent technologies and proactively monitoring transactions and data.
To prevent headaches down the line, it’s a good practice to implement these protective measures:
- In-app biometric data.
- One-time passwords to confirm user identity.
- Risk-based authentication.
- Password check to avoid too short and simple ones.
- Limited session time.
Implementing security features will affect the cost of developing an app for banking but will protect the app against various threats, for example, hacker attacks. As a result, you will save money and avoid reputational damage.
2. Compliance of a banking app
When estimating the cost of building an app for banking and creating a roadmap, it is important to take compliance issues into account. Fintech solutions have to meet specific standards, for instance, the General Data Protection Regulation (GDPR), the revised Payment Service Directive (PSD2), and the Payment Card Industry Data Security Standard (PCI DSS). Additionally, you should consider local banking regulations.
In order to ensure compliance with the required regulations, you should hire an IT company with expertise in the relevant industry. Software engineers will consult you on the matter and deliver features like role-based access control, data encryption, biometrics, and multi-factor authentication.
3. Fraud protection
By preventing fraud, you will be able to reduce costs later. Regular security audits and updates are essential to mitigate risks. Implementing advanced fraud detection algorithms and real-time monitoring systems is crucial to protect online banking users from fraudulent activities such as unauthorized transactions, identity theft, and phishing scams.
When estimating the cost of developing an app for banking, consider including AI-driven fraud detection solutions and transaction monitoring tools in the financial plan. These will help safeguard user accounts and data, bringing security to the most progressive level.
4. Scalability and maintenance
As the customer base and user activities are growing, banking app scalability becomes critical. Furthermore, it is critical to enable ease of product extension since rolling out new features leads to increased audience satisfaction and low churn.
Hence, software engineers need to design solution architecture to accommodate growth and frequent updates seamlessly. For this purpose, IT experts can choose, for instance, a microservices architecture. Laying out the foundation for scalability from scratch, you will manage to save banking app development costs in the future.
Furthermore, regular upgrades ensure that a banking product remains secure, compliant, and compatible with evolving technologies and user expectations.
5. App performance
In today’s competitive environment, users expect a banking app to be fast, responsive, and reliable. This way, performance is vital to success. To create a performant banking solution, a software development team should implement efficient coding practices, minimize loading times, and leverage caching mechanisms.
On top of that, quality assurance engineers need to test performance under various conditions (for example, network fluctuations and high traffic). Thanks to this, you will make sure a banking application behaves as intended even under peak usage.
By making everything right in terms of performance from the beginning, you will manage to save app costs in the future, as IT experts won’t have to fix arising issues and introduce optimizations.
Cutting-edge fintech expertise at your service
Our team is dedicated to delivering the best mobile banking apps based on user-specific needs, objectives, and pain points. Among other fintech products, we’ve released a new smart banking app in Flutter, which our client then took in-house for development and maintenance.
By building a fintech product with the Flutter cross-platform framework, our software engineers successfully improved the time to market, lowered banking app development costs, and enabled easier solution management by the client. In fact, this robust solution became the first banking application on Flutter in Europe and the second one worldwide.
Our project delivery team was able to put the old backend and the new frontend together by integrating a middleware server, ensure seamless user migration from the old banking application to the new one, polish the design, and lay the ground for further evolution.
If you want to estimate the cost of creating an app for banking in your case, fill out the form below: tell us about your idea and get a free consultation from our IT experts.
