Are you looking for a resource to help with your banking software development project? Or are you interested in the rapidly growing banking software industry and looking to invest in a banking software solution?
Look no further, as, in this article, we will be discussing banking software development from end to end.
The global core banking software market is expected to reach $47.37 billion by 2030.
Different types of banking applications, like banking CRM, internet banking, payment software, banking document management software, etc., aim to automate banking business processes and allow users to access banking services from anywhere with convenience.
Let’s see how you can develop banking software and mark your share in the growing market.
Banking Software Development – A Guide
The banking software development process includes the following steps:
Banking Software Ideation
The first step is to decide on the banking service you want to provide through your software product. A good approach is to follow a need-based solution method.
This means you look into the needs of your potential customers and think about what will make their lives easier. You aim to provide a solution to a customer’s problem through your software.
Consider the example where most companies refuse loan issuance to people with low credit history. You could develop a software product that gives loans to such individuals by determining their eligibility from their financial information. AI could enable the software to determine from the users’ data if they truly have the means to pay it back.
Techniques like brainstorming and SWOT analysis help decide the best business product idea by analyzing the strength, weaknesses, opportunities, and challenges with every software concept.
Market Research and Feasibility Analysis
After deciding on your bank software idea, you need to conduct thorough market research. Look into similar software products, their user base, and features, and try to determine what they are missing.
Also, dig into the types of consumers using the app. What are their usage patterns, what do these users like in this particular piece of banking software, and what features are not worth investing in, given the user trends?
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Feasibility Analysis is done in four ways:
- Economical: To help you outline the cost/benefit analysis. This helps you decide if it is economically viable for you to build this banking product.
- Technical: This helps you analyze the technical resources that you need to develop your banking software product.
- Timeline: To help you decide the duration of your financial services software development process. The major development milestones, their completion timelines, etc. You could also further discuss the product development schedule with your software development partner.
- Operational: This helps you figure out the required human resources for maintenance, support, etc.
Online tools, like SogoSurvey, help conduct online surveys and perform user market research using statistical data. Conducting a thorough feasibility analysis helps with the next stage of choosing the right software development partner.
Choose the Software Development Partner
This is a crucial step in the process, as the success of your banking software product depends on a knowledgeable, experienced, and reliable financial software development partner.
For a complex software product like banking software, skip hiring freelance developers. Freelance marketplaces give space to all developers with varied skill sets and development experience.
It is quite a risk to hire developers from such a platform, as poor industry knowledge and technical skills result in frequent product failures and project overruns.
An in-house team of developers would also take time and lots of energy to build. You would go through a time-consuming recruitment and training process for each developer.
Instead, we suggest you opt for a software development company providing financial software development services via vetted and experienced developers and dev teams.
By outsourcing the banking project to a banking software development company, you only have to go through a very brief vetting process, as the company already has done this for you.
A good software development company has excellent product development and communication procedures in place. Most importantly, they should offer you access to a range of skilled developers, each an expert in a particular software development domain.
To make sure you get the right developer, focus your research on reviewing the company’s past projects (especially banking-related projects), case studies, client reviews, technical expertise, development practices, etc.
All you need to do is contact suitable software development companies, discuss the banking software project details with them, review their developers for their banking software development services, and start working with the best-suited remote software development partners.
Read our article on how to measure the developers’ performance should you need help with this.
Next, we discuss the technical skills to look for in banking developers.
Skills required in a banking software developer
The banking software is built using the latest technologies to offer seamless and efficient remote banking services with the best customer experience. You need to partner with developers with the following skills:
- Web app development
Web applications involve two development processes: front-end and back-end.
- Front-end Development
The front-end developers are responsible for implementing the user interface designed by the UI/UX designers.
- Back-end Development
The back-end developers deal with tasks such as functionality, performance, data integration, application security, etc. Java and Python are widely used for building financial products.
Python is a simple-to-use programming language with English language-like syntax. It is gaining traction in building banking products due to its versatility and extensive libraries.
Python is vastly used for financial data analysis, machine learning functionality, automation of various banking processes, etc.
Java is another widely used programming language for building banking systems. It is a structured object-oriented programming language that is secure and reliable and includes out-of-the-box features like runtime constraints and an advanced security manager.
- Mobile app development
The skills you require in your mobile app developers depend on the type of mobile banking application you want to launch. Each mobile device operating system calls for a separate skillset for app development.
- iOS App Development
Native iOS app development skills are required for devices operating on the iOS operating system, such as the iPhone, iPad, etc. iOS developers should be skilled in Swift or Objective-C programming language.
Swift is popular today for iOS app development for several reasons, such as:
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- It is a modern programming language built by Apple to design and develop iOS apps with safety and speed. The Swift code is easier to read, write and maintain.
- It is easy to learn with an intuitive and clean syntax compared to Objective-C.
- It offers features like optionals, type inference, automatic memory management, etc., which ensure reliability and stability in iOS apps.
Your developers should have experience in using Apple Integrated Development Environment (IDE), Xcode, to build applications efficiently. They should also be familiar with the Apple human interface guidelines required to design an Apple standard banking app.
Some frameworks and libraries that your developers can use to enhance the security, performance, and user experience of banking apps include the following:
- Apple Security frameworks like Keychain Services, Security Transforms, etc., help implement robust security features like secure storage, encryption, and secure network communication.
- Core data framework simplifies tasks like data modeling, database operations, data synchronization, etc., to store and retrieve banking data securely.
- Alamofire networking library offers a high-level interface for creating network requests, handling responses, managing authentication, etc. Your developers can use it to secure your banking app communication via features like SSL pinning, authentication headers, etc.
Your developers should also have expertise in app testing tools like XCTest to build bug-free mobile banking apps and ensure each app feature functions correctly.
- Android App Development
Native Android development skills are required to develop apps for the Android operating system. Programming languages like Java and Kotlin are common for building secure and performance-efficient apps for Android devices.
Google has officially announced support for Kotlin as a preferred language for Android app development, making it popular among the Android developers community. The programming language offers the following features, including some others:
- Kotlin language is designed to be concise, expressive, and readable compared to Java. Moreover, it is also interoperable with Java programming language.
- The modern language offers features like null safety, type inference, lambda expressions, etc., which reduce boilerplate code and make the development process efficient.
- Kotlin has built-in support for coroutines that simplify the handling of asynchronous operations. Your developers can implement coroutines to write maintainable code for database operations, background processing, etc.
Android app developers should be familiar with Android IDE like Android Studio and Android Software development toolkit (SDK) to efficiently develop apps with maximum library support. Some other libraries and tools your developers can use to enhance Android banking apps are as follows:
- Jetpack security for storing and encrypting sensitive banking data on a mobile device. It offers APIs to generate and store cryptographic keys, encryption files, etc.
- Your developers can use the Material Components library for pre-built UI elements, like buttons, text fields, cards, etc., that follow the Material Design guidelines.
- Room library simplifies storage and retrieval of banking app data according to user’s preferences, account details, etc. It provides an abstraction layer over SQLite and makes it easier for developers to work with local databases.
Android app developers should be skilled in testing tools like Espresso to thoroughly test functional and non-functional requirements before app deployment.
- Secure Software development
As Banking software deals with users’ confidential personal and financial data, software security is of primary importance. Your developers should be experts in implementing the latest application security practices for an ideal banking management system.
Your developers should know the latest security threats like Denial of Service, SQL injections, and scripting attacks. They should also know the solutions to prevent them, for instance, data encryption algorithms like DES and RSA.
Multi-factor authentication (MFA) and change of passwords are some basic standards to ensure application-level security, and your app must include them.
Your developers should be familiar with compliance-as-code to ensure that your app code complies with the correct security standards and industry regulations.
Regulatory non-compliance costs businesses nearly 15 million US dollars on average. Compliance-as-code assists businesses with policy definition, code-based configurations, change management, auditability, etc.
- Cloud Computing
Cloud computing services in software development add flexibility and scalability to the software application infrastructure. These include infrastructure, platforms, and software tools, such as storage solutions, development environments, APIs, etc.
The advantage is that businesses no longer need to invest in physical infrastructure beyond a few laptops and a wifi connection. They do not have to spend time and money on resource deployment and maintenance.
- Infrastructure as a Service (IaaS) allows developers to work virtually on their cloud provider infrastructure. For example, AWS offers a virtual server service, Amazon Elastic Compute Cloud (EC2), that allows users to provide and manage virtual machines with complete control over the operating system, networking, and storage configurations.
- Platform as a Service (PaaS) provides operating system services that allow the management of applications and data storage in the cloud. For example, AWS Beanstalk is a fully managed service that streamlines the deployment and management of software applications. It supports several programming languages and IDEs and handles load balancing, application scaling, monitoring, etc.
- Software as a Service (SaaS) platform provides pre-configured software packages to users. Developers do not have to install or manage the software applications themselves. Microsoft Office 365 is one such example of SaaS.
- Latest Technologies
The use of the latest technologies helps build app functionalities that offer the best and most reliable customer experience. Some of the cutting-edge technologies your developers should have expertise in for banking software development include the following:
- Artificial Intelligence
Artificial Intelligence, especially machine learning algorithms, is widely used in financial and banking software to provide a personalized customer experience. Predictive machine learning algorithms learn useful patterns from user data and suggest the best-fit services for individual users.
AI-powered chatbots are popular in banking applications to assist customers effectively. Chatbots serve multiple users simultaneously, 24/7, without ever getting tired. AI algorithms help improve chatbot-user interaction through techniques like Natural Language Processing (NLP).
NLP allows chatbots to understand human conversation, sense emotions, and generate human-like accurate responses. Latest NLP tools like ChatGPT are increasingly getting popular for integrating conversational interfaces into apps for enhanced customer support.
For example, Microsoft Bot Framework has several features to build, deploy, and manage chatbots, and a few of these are as follows:
- The multi-channel support for Microsoft Teams, Skype, Slack, etc., allows developers to easily deploy chatbots across these channels.
- The Bot Framework integrates with Language Understanding Intelligent Service (LUIS), which enables developers to develop language models, understand intents, and enhance the chatbot’s ability to understand user queries.
These frameworks offer pre-built libraries for popular ML algorithms and tasks, such as data formatting, training, visualization, etc., allowing your developers to implement ML functionality in the banking software.
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Blockchain technology is in high demand today, particularly for implementing sound security features. Your developers can use blockchain technology in banking software to secure payment procedures, user information records, user account verification, etc.
Plan the Software Development Strategy
After forming your team of developers, it is time to implement your financial software development strategy and workflow.
In the software industry, the most widely used is the Agile methodology. It is the one we recommend. It goes well with companies looking for a speedy and manageable software development process.
An agile product development strategy lets the developers work in small, cross-functional teams to develop software rapidly in iterations. Each iteration builds up the product by enhancing its features per user requirements.
- Scrum offer time-boxed development iterations called sprints. Each sprint is one to four weeks long to complete prioritized development tasks.
- The product backlog consists of user stories, features, and enhancements representing product requirements based on priority.
- At the start of every sprint, the scrum team conducts sprint planning to select items from the product backlog to work on during the sprint.
- The team conducts a daily standup to discuss progress and any blocks the team is facing. The team presents the work done during the sprint review meeting at the end of the sprint and gathers feedback from the product stakeholders.
These and other scrum features encourage transparency, agility, and flexibility during software development. The development team can readily adapt to changing requirements and deliver high-quality software by continuously improving the software product and team performance.
Design and Develop
At this stage, you formally start the design of your software product. Remember that a good UI/UX interface is essential to attract and retain more users. Design an app with the help of UI/UX designers that is easy to use and without unnecessary complexities.
Gradually, you refine and scale up your software product with new features based on user-recommended improvements.
Test and Deploy
Make sure to launch bug-free banking software, as the risk associated with banking products is huge. Conduct thorough testing of the product.
Use QA testing tools to ensure the software product is working as planned. Use software tools like TestRail for software product testing. TestRail offers several features to streamline software testing, such as the following:
- It allows developers to create and manage test cases in a structured manner. Your developers can define test cases, including steps, expected results, and preconditions.
- Test run management enables developers to run a set of tests and track progress. Developers can filter and sort test cases based on various criteria.
- TestRail helps developers define requirements and link them with test cases to ensure adequate test coverage and visibility into the software project.
Once satisfied, deploy the banking solution for the users to start using.
Market the Software Product
Marketing your banking software is essential. In the digital era, commercialization of a software product can be through several channels, such as the following:
- Running Ads:
Run your software product ads by leveraging social media platforms like Instagram, YouTube, Google, etc. Invest in the channel with the maximum conversion rate.
- Press Releases:
- Online Presence:
Invest in an online presence by building your website and linking it to your social media pages. Considering your budget, promote them on online platforms like Google and social media.
Planning to Invest in Banking Software Development?
Banking software development requires extensive planning and technical expertise. Partnering with the right financial software development company is of primary importance if you want to realize your dream of creating a next-level core banking software solution.
Many businesses have trusted DevTeam.Space developers and dev teams to help them build their software products.
DevTeam.Spaces developers are skilled in all the latest technologies and have tons of experience in this industry. Simply let us know your project details, and we will get in touch to discuss how we can help you build a particular banking software.
Some of the latest features gaining popularity in digital banking applications include peer-to-peer (P2P) payments, mobile banking solutions, personalized digital insurance (bancassurance), etc.
The banking software solutions heavily rely on .Net, Python, Ruby, and Java. Oracle is the most used database technology in the banking sector.
The digital era today makes it compulsory for financial businesses to streamline their processes through online banking and administrative management software. All-time accessibility to bank accounts is crucial to gain customer satisfaction.