Think a luxury car is pricey? Imagine a banking application costing less but transforming your cost-to-income ratio to soar.
Mobile banking isn’t a luxury anymore. It’s a necessity. Like that bridge connecting a city to its suburbs—without it, you’re stuck, missing out while everyone else moves forward.
Don’t you agree?
So, what’s up, and why are American banks lagging on mobile banking while FinTechs like Revolut are booming? How come? Since launching credit cards in the 1950s, the US banks have always been the leaders in the world in card payments.
But now it’s over, we’re behind developing countries like Kenya. Doubts?
Look at what the Federal Reserve Bank of Richmond brought in its report. Kenya’s mobile payment adoption rate is about 75%, while in the U.S., it’s less than 25%.
75% and 25%, what a difference!
Reasons? Many sources state the main things are: payment infrastructure and regulation. Secondary factors are consumer preferences and demographics.
Having been in FinTech software development for 11 years we’re at Itexus and are familiar with the problems and know how to work them out. In this article, we explore many aspects that can either increase or decrease the cost. On top of that, we will share some tips and tricks on how to reduce development costs by 10 to 20%.
Ready to dig in?
How Much Does It Cost To Create Mobile Banking App
The short answer circulating among developers is typically between $30k and $120k. Many factors affect the cost. The most significant are the app’s functionality and the complexity of the processes involved.
The more functionality, the higher cost.
| Mobile app Complexity | Average timeline | Average cost |
| Basic with low level of complexity | 3 – 6 months | $ 30k+ |
| Medium level of complexity | 6-12 months | $ 60k+ |
| Advanced with high level of complexity | 12 – 18 months | $ 120k+ |
Contact us for a free consultation and a one-day estimate for your project
Simple apps have basic functionality with minimal features that allow users to do the following:
- Check their balance
- Order debit, credit, and virtual cards
- Receive notifications on financial transactions
- Calculate interest rates
Medium apps refer to native and cross-platform mobile applications. They have advanced significantly in terms of UI/UX design and functionality. In addition to the simpler apps mentioned above, they include the following features
- To transfer fund.
- Make payment for merchants and services delivered.
- Open and withdraw deposits.
- History transaction overview
- To manage savings and investments.
Advanced apps often use the latest techs, plus AI. They are built from scratch. As a result, the costs of such projects can skyrocket.
- Spending Analysis: Offers insights into spending patterns and categorizes expenses.
- Budgeting Tools: Helps set up budgets and track progress towards financial goals.
- Fraud Alerts: Notifies customers of potentially fraudulent activity on their accounts.
- Support for Financial Questions: Answers general inquiries about banking products and services based on AI.
- Voice and Chat Interaction: Allows interaction through text or voice commands in the mobile app.
- Personalized Insights: Provides tips and recommendations based on users’ financial behavior and goals.
Such type of the advanced banking apps are Erica of Bank of America, Revolut, N26
How do those costs look?
If you’re on board, our rates are 10% to 20% off.
Here is our table of estimated costs for the development of a medium-complexity banking app with basic functionality with stages.
| Stages | Timeline | Estimated Cost |
| Project Review and Analysis | 1 week | $1,000 |
| UI/UX Design | 4-5 weeks | $5,500 |
| App Development | 9 – 10 weeks | $36,500 – $40,000 |
| App testing | Goes along process of development | $5,500 – $6,000 |
| Project management | During the development | $4,000 – $4.500 |
To put it simply, it might take $50k to develop your app with basic features. It will take about 4 months.
Let’s take a look at a couple of banking app developed by us:
White-Label Mobile Banking App
Mobile Banking App for Migrants
Loan Lending App
Mobile Bank Transfer App
If there was a question about where such figures come from, here is the average set of specialists involved in such projects. These are: Project Manager (PM), Business Analyst (BA), UI/UX Designer, Program Architect, Developers, Frontend Developers, Quality Assurance (QA) Engineers, Security Experts, DevOps Engineer
Review of Global Hourly Rates
Having reviewed the estimated costs, we will now provide an overview of the cost of banking app development in various regions:
- in the USA and UK, ranging from $70 to $150 per hour, while rates in other countries are substantially in
- Eastern Europe, the average rate fluctuates from $40 to $80 per hour,
Asia, just over boarder, the rates range from $20 to $40 per hour.
Key Factors Affecting Mobile Banking Application Costs
Needless to say, the more functionality you employ to an app the more technical resource and labor it requires.
Let’s look at each factor in detail.
Feature Complexity: The breadth and depth of features and services, such as core banking functions versus advanced investment tools, directly influence the development effort and associated costs. To put it simply, a savings account feature will be less costly than an integrated wealth management tool.
Functionality: Adding features like fund transfers and chatbots increases costs. More features need more coding and testing.
Platform Type: Making separate apps for iOS and Android is costly. Using a tool like Flutter is cheaper, as it targets both platforms at once.
UI/UX Design: Creating an attractive, easy-to-use interface needs skilled designers, raising costs. A good user experience keeps customers.
Incorporating Technologies: Using AI and machine learning in apps requires special skills. This raises costs. These technologies enhance personalization and fraud detection.
Backend & Frontend: Using Flutter for both backend and frontend saves time and money. It’s cheaper than using different tools.
Data Management: Securely managing customer data is costly. This includes server costs and maintenance. It’s vital for compliance and trust.
Banking Regulation Compliance: Meeting regulations like GDPR and AML requires extra work. This includes testing and documentation, raising costs.
Security Measures: Strong security, like encryption and multi-factor authentication, increases development time and costs. It’s crucial for preventing breaches and keeping customer trust.
Hidden Costs in Banking App Development
Now that we reviewed the factors it makes sense to delve into something very important that can affect your project. It’s about hidden costs.
Mobile banking app maintenance
In fact, launching an app is just the beginning. While all apps require maintenance and support, banking apps, in particular, need it even more. Maintenance costs can reach up to 50% of the total development cost in the first year and around 25% in subsequent years. Maintenance includes, but is not limited to:
- Fixing errors
- Updating platforms
- Developing new functionalities
- Addressing user requests and feedback
- API maintenance
Service Subscription
Depending on its functionality, an app may require additional subscriptions for third-party services, such as:
- Email delivery
- SMS delivery
- Push notifications
- Chatbot services
Infrastructure Maintenance
The complexity of a project and the volume of data an app employs can significantly increase infrastructure maintenance costs, including:
- Hosting
- Servers
- Data and image storage
Marketing
Needless to say, marketing is crucial. Without the promotion of a product, there are no sales. This cost can be limitless.
How to reduce mobile banking app Development Cost
Indeed, those invisible aspects can be unpleasant. However, there are hints that can help reduce costs, and we have collected insights from our experience that everyone can employ while developing an app.
Cross-platform Mobile App Development
One of the main factors affecting the cost of mobile app development is the number of platforms used. Instead of utilizing native apps for both iOS and Android, your developers can use a cross-platform framework like React Native. This approach allows for a single codebase for both iOS and Android, consequently enabling you to work with one team instead of two.
MVP Development
MVP — minimum viable product — it’s initial version of your app. An MVP can help you gather valuable user feedback before your entire budget goes to a product that doesn’t meet customer expectations. Instead of spending a lot of money and find that some features are out of interest for users, MVP allows to determine it on the early stage that lead to reducton of cost.
Validate capabilities
MVP helps to test the core features of the app and its scalability without a large investment of capital.
Risks and challenges of building a banking application
Given the specialized nature of the banking industry, it is extremely sensitive to financial data and regulatory requirements. This leads to numerous risks and challenges when building a banking application:
1. Security and Compliance Risks:
– Protecting sensitive customer data from breaches and fraudulent activities is critical. Additionally, ensuring compliance with regulations such as GDPR and PCI DSS can complicate development.
2. User Trust and Experience:
– Gaining user trust is paramount, as security incidents can erode confidence. Moreover, the application must be intuitive and user-friendly to prevent high abandonment rates.
3. Integration and Data Management:
– Integrating with legacy systems and third-party services can pose challenges, while maintaining data accuracy, consistency, and privacy remains crucial for user satisfaction.
4. Performance and Scalability:
– The app must handle high traffic, especially during peak times, and be scalable to accommodate growing user bases without sacrificing performance.
5. Cost and Development Delays:
– Initial development costs can exceed estimates, and unforeseen complexities may lead to delays, necessitating careful budget management and efficient project planning.
Conclusion
Oh, I know what you’re thinking: So, what is the right budget for a mobile banking app?
You need to figure out the budget for a mobile app at a specific moment. Apps are always changing. New bells and whistles keep getting added. This changes the bottom line. So, what it costs today might not be the same tomorrow.
The article gives rough numbers just to give you an idea.
I dare you to contact us to get a cost estimate for a specific app or according to a list of features.
However, the main issue is not the cost of the app, but how to improve the financial performance.
Let’s transform your bank’s performance together!