How to Create a Digital Banking Platform

For some people, fintech is associated just with digital banking software providers as well as payment systems. Yet actually, it consists of all technology innovations for financial tasks. At the same time, banks invest in developing applications and also platforms for managing clients and relife their interaction with banks.

This article will certainly focus on building a digital banking platform and overview basic steps in developing it. We will identify when to make your system, what benefits you will have, and the features you need to include in the software application solution.

What Is a Digital Banking Platform

Mobile banking applications have become a fundamental part of our everyday life. Based on the Allied Market Research, more than 75% of Americans made use of mobile bank applications to examine their balance as well as manage bank accounts.

Lots of banking functions became customary for everyone, but they did not exist a couple of years back. For example, we can split the costs or send money to our friend using just a contact number or payout there with an Apple Watch. It has become a part of our reality, and also it means that fintech companies will invest an increasing amount of money in enhancing banking apps and also boosting customer satisfaction. Furthermore, online banking is growing quickly, and by the end of 2022, 88% of banking transfers will certainly be finished with mobile phones.

A digital banking platform is an instrument for offering banking services online. The primary goal of such systems is to manage customers’ online circles, since banks used to have various core banking systems for numerous products, and all the customers’ information was duplicated in those systems. That is why it became essential for financial institutions to build a separate system to manage clients’ data. Online banking systems are based on automation principles as well as online services.

Several types of digital platforms are the most famous on the financial globe:

  • megabank API toolkits
  • market systems
  • analytical platforms
  • business banking platforms
  • integration systems.

Furthermore, all the IT solutions for banking institutions are concentrated on attracting clients and searching for the best option to drive and enhance interaction with customers.

When You Should To Establish Your Own Digital Banking Platform

The following move is to identify when you should focus on your solution for managing the customers’ information and also help them to utilize banking solutions on the internet efficiently.

As we just pointed out, the expanding statistics of mobile banking users require fintech companies to concentrate on the most recent digital trends. It became essential for each banking institution to establish an innovative instrument for basic essential needs. You can determine that your bank or business needs to construct its platform only after creating a digital banking strategy and also comprehending exactly how it can enhance the banking institution’s work.

 You need to start operating to establish your product if you find that it will certainly address your organization’s issues as well as assist you in accomplishing the goals much more efficiently.

Main Functions of The Banking Platform

The Fintech industry is one of the most affected by digital trends of the last few years. To start with, it opens new methods for financial operations, shields the data, as well as supplies the most effective services to the clients. At the same time, there are a set of functions that became essential for digital banking applications. Next, we will describe these features for the effective launch of the banking platform.

  • Payments. Your customers want to pay for everything from their smartphone. For programmers, it implies that you need to integrate the system with every feasible payment system that will allow customers to pay for day-to-day costs, send money, or even pay credits with just a few mouse clicks.
  • Balance and transaction administration. The first thing your clients will certainly see opening the app is the balance of the bank account as well as the history of operations. Your clients need to have the possibility of inspecting the balance 24/7.
  • Push notification alert. The clients should get a notice regarding every change in their banking accounts. It enables them not to miss any kind of payment or transaction.
  • Verification. It is necessary for mobile banking to add customers and shield the data and also guarantee secure login into the account. You can include Face-ID or fingertips verification. Likewise, it can be a two-step authorization with sending out the safety code.
  • Activity tracking. Practically every banking platform includes a cost monitoring tool that enables customers to analyze their spending and make precise money planning for the future. This attribute should be easy to use and also easy to navigate.
  • Card and transaction management. Banking platform customers need to have the ability to block the card or alter the PIN code with an application. The asses to those procedures have to be easy to locate, as in some cases, it can be vital.
  • Support. This is an important part of communication with customers. Preferably, you need to make sure that clients can get permission from the digital banking services 24/7.

Those features are standard for practically every electronic banking application nowadays. At the same time, some innovative features can make your system extra competitive.

  • Take cash without a card. Some applications allow you to withdraw money with an application.
  • Accessibility to other banking institution products. It can be a loan or insurance supplied by the same bank. Clients of the applications can have unique access to those products.
  • Unique signals. You can create an option to turn on customized customer alerts. For example, some clients wish to be notified that the balance is low or when to pay regular month-to-month payments.
  • Cashback. Each time your customers use a mobile application to buy, they can get a cashback into the card or special bonuses depending on the quantity of money they spend.

Advantages And Challenges When Creating A Digital Banking Platform

Launching a digital banking platform will benefit your customers as well as positively influence business. A lot of banks establish digital platforms to enhance the level of service they supply and to obtain more clients. Likewise, there are a couple of pros of the systems we recommend paying attention to while creating a banking product.

Raising clients’ base. There are 130 million mobile banking clients in Europe as well as greater than 50 million in the United States. Bank customers appreciate utilizing new technology that makes all their bank procedures much easier. Every user of your application is an extra contact in your banking institution base that you can use in the future to promote brand-new products.

Getting a brand-new communication channel. The banking application is a unique and also progressive channel for communication with customers as well as promoting brand-new products. You can send them special notices or show new banking institution services in the client dashboard.

Making use of data for analytics. Everyone who installed the application became a resource of data for the analytical department of your establishment. This information helps to supply an individualized customer experience, determine the system’s weak points, as well as much better comprehend the clients.

At the same time, you should think about some difficulties that every financial institution and the team will have during the design procedure.

Provide information security. Safety and security concerns became the most crucial in the case of operating the banking information. There are numerous risks in using the mobile application for banking operations, but the DevOps goal is to shield the customers from emerging hazards. You need to ensure money protection. In the case of protection, it is required to concentrate on the network architecture and also the selection of cloud information storage. In many cases, you can utilize the transport layer safety and security (TLS) procedure for clients’ authentication.

Know your customer. The KYC concept is basic for protecting against terrorism funding, money laundry, or corruption scheme. The KYC process needs to determine your clients as well as guarantee proof of identity (POI) and Proof of Address (POA). It can be additional documents (ID, military ID, passport, student ID, and so on). Customers need to send the documents the bank requires. Adhering to the KYC law is crucial for every banking application, as it is a part of anti-money-laundering legislation.

Follow regulation. There are a lot of other guidelines you need to follow in developing a digital banking platform. It can be basic guidelines for all the countries or some regional laws. For instance, GDPR protects individual information in the EU, PSD2 for protecting payments across the EU and EEA, CCPA to improve privacy rights, and also clients’ protection for California, the USA, and others. It would assist if you researched what law you will need to follow with your platform.

Ensure payment blocking. You also should ensure that all suspicious deals can be blocked to secure users’ money. At the same time, it’s vital to unblock those deals in a short time, in case it was an error.

After evaluating all the obstacles of building digital banking applications, you can focus on development.

Creating a Digital Banking Platform: Detailed Guide

Banking software creation is a complex procedure, but it can be separated into a couple of key phrases. Each stage has its actions. Next, we will certainly share our best step-by-step technique to create a successful mobile banking solution.

The main phases are:

  • pre-development
  • prototype building
  • system coding
  • platform launching

Pre-Development Phase

Step # 1. Make research. It is just one of the vital parts of banking software development. First, you need to define the business goals you are going to solve with a new product. Next, you need to focus on a target audience, determine their demands and discomforts. You should learn from the competitors, evaluate their deals, and also discover the best tech stack for your application. Market research will consist of lots of indexes that will help you to produce a strategy for launching the application.

 Step # 2. Make a plan. After you examine the information from the research, you should focus on your purposes as well as produce a useful and comprehensive development plan. It will be the key document and a business model for your team.

Prototype Building Phase

Step # 3. Produce UI/UX design as well as the prototype. After defining the app’s concept, you can start working with a future app interface UI design. It’s important to understand the navigation, functions, tech stack, and fintech specific of the product before beginning design. This prototype will certainly illustrate the logic and architecture of the platform.

After creating a prototype, you can check it with a target audience and also fix the application’s weaknesses. Additionally, you will certainly attempt the design and also improve its usability based on customers’ behavior.

 Action # 4. Ensure application safety. This is the moment to introduce the DevSecOps team to guarantee that the platform will be protected and also secure. Expert teams know about the most common hazards in the fintech market from their experience. It would help focus on safety procedures in the prototype building phase, influencing the future coding process.

The goal of this action is to shield the application and the client’s information in the future. There are some necessary suggestions for this step:

  • utilize information encryption algorithms,
  • enables confirmation of transactions by generated codes,
  • use two-factor authentication.

Action # 5. Select a tech stack. The stack will certainly depend on the objectives you should attain. The following vital step is to pick what technical tools you will certainly use to create the platform.

System Coding Phase

Step # 6. Coding the digital banking platform. The most significant action in the whole process. The process of frontend, backend development, data integration, and others are comparable for the same kinds of applications. The success of this phase will depend on the team you will choose to collaborate with. Best of all, to work with studios that provide an entire spectrum of services, not only testing or coding the product. Ideally, to have a team with experience in producing banking software. Building MVP will certainly stanch this coding work a lot.

Action # 7. Integrate the platform with third-party solutions. The software you are going to lunch should be quickly integrated with other solutions the bank uses. It can be a banking institution website, human resources software, or a banking program you need to work with an application. Ensure that the brand-new platform will function properly with integration.

Platform Launching Stage

Action # 8. Release the platform. The last stage starts with launching your product and also sharing it with your customers. It is vital to recognize how to support the platform and optimize it for the before searching-systems. Moreover, you should inform the globe about the advantages of your product, and also the best way is to introduce an advertising campaign. It will certainly be better to work with a company that currently has experience in advertising banking applications, as this industry can have several restrictions as well as peculiarities.

 Step # 9. Enhance and update the system. There is the last step in this process to monitor the product and also to improve it. It is vital to get responses from customers and also make necessary modifications that they need. This is the fundamental concept of reliable communication with clients. Do not forget about improving the application after the launch as well as learning client experience after operating the platform.

Conclusion

As we mentioned in the article, it is vital to start with research and also specify the strategic goals for your financial company. Those standard actions will ensure that you are going in the appropriate direction in creating your digital banking platform. After you have the whole picture and also the structure of the future application, you can begin working with DevOps, DevSecOps, and also other teams. The entire process is quite challenging as well as can take a very long time. We advise you to start working with IT firms that ensure the whole spectrum of services as well as manage all the fintech software development phases.

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