Post Image
According to Wikipedia, a neobank is a type of direct bank that operates exclusively online without traditional physical branch networks. The term “challenger bank” was first used in the UK to refer to several FinTech banking startups that emerged in the wake of the 2007–2009 financial crisis. There are mainly four neobanks in Nigeria. They are Kuda, Opay, VBank, and Wise.
Read more about Fintech
Techcrunch published an overview of neobanks stating that a FinTech giant is an expensive thing to do. Our experience shows that the price can be somewhere between  ₦145,425,000 ($350,000) to ₦241,087,206.26 ($580,000) to start serving customers with primary features. In this article, you shall learn four key things that can help you create a standard neobank.

Step 1: Make A Neobank Platform Basis

The first step toward developing a neobank is, to begin with, the back-end technology. At the core of an operational neobank is API (application programming interface), after which you need a card processing application and several back-office tools. API enables you to connect your software to other services, like authentication modules or payment gateway. A neobank card processing app regulates transactions and other operations with credit or debit cards. On the other hand, the back-office tools help manage your neobank platform. Finally, the core of your service provider must be simple to update in real-time due to rapid changes in the market. Should you miss on trends, your platform will be negatively affected.

Step 2: Invest Heavily In Frontend Development

Neobank is strictly a digital-only bank, hence your application interface is your only point of contact with customers. Building a custom-made interface must be perfect to create a complete banking experience for your users. Aside from having all the necessary features that facilitate a smooth banking experience, your interface must be top-notch and compelling enough to create the best user experience. Creating a functional and attractive UX/UX is the very essence of a digital-only banking platform. There are basic features that every neobank should provide that include: accounts, credit/debit cards, payments, transactions history, budgeting, investing options, child accounts, notifications, and a chatbot (help for users).
Sign up for the Connect Nigeria daily newsletter

Step 3: Incorporate Your Neobank Security 

Security is another important core of a neobank. It is the only way to earn users’ trust. To build very vibrant security, you must approach it from 3 sides:
  • Built-in security. This will require a multi-layer security system that is incorporated with custom-built solutions and tools from trusted vendors. For instance, some bots can seriously help in protecting from fraud, hacking, and data theft.
  • Machine learning (ML) security alarms. With the help of ML technology, neobanks can receive early warning signs that point to dangerous trends and moments. ML uses available data to study patterns and inform your security team who can then take preventive measures that will avoid security problems. 
  • Users authentication. Building a neobank app requires you to develop a set of authentication tools that enables protection from standard threats like password theft, for example – by using video calls to verify identity.

Step 4: Testing 

Register to attend the Connect Nigeria Business Mixer
This is the final stage of developing a digital-only financial platform. It requires the following testing approach:
  • unit-testing: This indicates the performance of all the usings of your app.
  • integration testing: This is when you test if your neobank platform perfectly integrates with other IT solutions) 
  • security testing: This is when you test the credibility of your firewalls.  There are cases where developers attempt to hack into their apps to check the credibility of their security system.
  • user experience testing: This is when you double-check the convenience of your app’s UI/UX. This includes the level of loading speed, navigation, visual appeal, logic appeal, and instinctive appeal.
  • Repeat testing.
Featured Image Source: Financial IT
Got a suggestion? Contact us: editor@connectnigeria.com      
You might also like:
This article was first published on 12th May 2022 and updated on May 16th, 2022 at 2:11 pm

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

Comments (80)

80 thoughts on “4 Steps On How To Start And Grow A Neobank”

Leave a Reply

Your email address will not be published. Required fields are marked *