Recent reports reveal that the global market size of digital banking will reach 12 trillion USD in 2026. The primary growth drivers comprise a change in customer behavior, an expanding Fintech market, a flourishing eCommerce industry, and favorable government policies.
However, owing to the nature of this segment, cyber security is one of the biggest challenges the digital banking industry encounters.
With online banking on the rise and its share of a vast global market, banking software development is of utmost importance.
This article takes you through the importance, types, and process of custom software development for the banking and finance sector.
Table of Contents
What is Banking Software Development?
The finance industry is undergoing rapid digitization due to the increased reliance on internet-based technologies and mobile devices. Banking and financial institutions are racing to introduce software solutions into business processes. The reasons can be many, from creating a more efficient working infrastructure to a better user experience.
Modern-day customers are unwilling to visit banks and stand in a long queue to pay their bills, withdraw money or engage in transactions. These financial procedures are automated through custom technologies, making the customer's experience fast and simple.
Banking software development is automating banking and financial practices, so staff and users can avail themselves of the services they need anytime, anywhere through online banking platforms.
Technologies like AI, DevOps, and Big Data enable developers to build high-quality custom banking software.
What are the Different Types of Banking Software?
Banking software development encompasses a wide range of software solutions. Institutions might choose to develop one or more of the following software solutions:
Financial Operation & Management Software
These banking solutions offer management tools to assist the bank admin and staff in planning, accounting, budgeting, and transactional procedures.
Banks' document management software helps automate all types of reporting, including incoming and outgoing financial documents, administrative documents, memos, contractual papers, etc. This software helps speed up banking practices while assisting in decision-making, task implementation, and security maintenance.
Administrative Management Software
Administrative software products are management systems for admin tasks such as task assignment, staff attendance, scheduling, etc.
Customer Service Solutions
Customer service solutions include CORE or Centralized Online Real-Time Exchange banking software, offering services to customers at any location through ATMs and branches. Through this technology, all the bank branches connect to a central server so that the processes can be automated and offered to the customers.
The Core banking services include online transactions, mortgage management, credit card issuance, mobile payments, and loan management.
CRM is also another customer service solution. It is a complete application with several modules that help in marketing, customer services, and financial process automation.
What is Ideal Software for Finance?
Before moving on to the process of banking software development, it is imperative to understand how an ideal software for finance should be.
Any digital software you integrate should simplify everyday tasks and automate processes that consume a lot of time. This is particularly relevant for the banking and financial industry, where data processing speed and security play pivotal roles.
So, the ideal banking management system must:
- Enable building the planning and reporting system for effective financial management and bank risk control
- Increase the efficiency of customer service
- Automate the implementation of operations and complex banking transactions
- Broaden the channels of communication with customers
- Improve the accuracy of the assessment of the customer's creditworthiness
- Provide free integration with other software, such as mobile applications, ATMs, POS terminals, etc.
A Guide to Finance Software Development
Let us now consider taking a look at the few steps leading to custom banking software development for financial institutions:
1. Ideating Banking Software
The first step is to decide on the banking service you want to offer through the software product. An ideal approach is to follow a need-based solution method. This implies that you look into the needs of the potential customers and try to identify what will make their lives easier.
The purpose is to create a solution to the customers’ problems through your custom software. There are numerous banking software available, but the aim is to create a unique one that stands out in the market.
For instance, most companies refuse loan issuance to people with low credit history. You can develop a software product or app that provides loans to such individuals by determining their eligibility from their financial information. At the same, the integration of AI technology can evaluate if the customers have the means to pay it back.
SWOT analysis and brainstorming are established techniques for deciding the most-suited business product idea.
2. Conducting Market Research and Feasibility Analysis
Once the banking software is ideated, one must conduct thorough market research. You must look into similar software products, features, and user base and evaluate what’s missing.
In detail, it is also essential to determine the consumer types and categories using the app. Their usage patterns, why they like particular banking software, and what features are not worth investing in are all points of concern.
Feasibility analysis is done in the following four ways:
- Economical – This is to help outline the cost/benefit analysis. This will enable you to decide if it is economically viable to build the banking product. Feasibility analysis is done in the following four ways:
- Technical – This helps analyze the technical resources needed to complete the banking software product.
- Timeline – This helps decide the timeframe of the finance software development process, including IT compliance, major developmental milestones, completion timelines, and so on.
- Operational – This helps determine the required human resources, software configuration management, maintenance, product usability, and support.
A thorough feasibility analysis helps in the next and final stage of choosing the right software development partner.
3. Choosing the Right Software Development Partner
This is a critical step in the process as the success of the banking software depends on a knowledgeable, reliable, and experienced software development company.
For a complex software product, a hybrid company offering software development services using outsourced developers and teams is a good choice.
A good company will have excellent product development and communication procedures in place. Most importantly, they will offer your company access to a range of skilled developers, each an expert in a particular programming domain.
Best Banking Software Development Agencies to Hire in 2022
1. Astha IT
- Location: 9 Shiddheswari Road, Dhaka, 1217, Bangladesh
- Average Hourly Rate: $25
- Expertise: Software Development, Blockchain Development
Astha IT is a software development company that specializes in building massively scalable systems. Founded in 2008, they help governments, large-scale enterprises and startups build successful products that users love. Their clients are spread across four continents and belong to many different industries.
They are one of the very few companies in their country to have built a massively scalable Application Platform as a Service (aPaaS), powered by a set of distributedly running microservices on the cloud, that allows customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app.
- Location: Marienplatz 1/3, Graz, 8020, Austria
- Average Hourly Rate: $150
- Expertise: Banking Software Development, Educational App Development, Digital Design, Mobile App Development
Parkside is a premium engineering and design partner for custom software development.
Their clients trust Parkside's expert teams to design, enhance and scale digital products and transform legacy platforms into market-leading solutions.
They combine software development, UX/UI design, product development and technology consulting in unprecedented ways to deliver better software faster. Some of the services they offer include User Experience & Design, Research & testing, Visual Design, Custom Software Development and Digital Branding.
- Location: Zagrebačka ul. 1, Osijek, 31000, Croatia
- Average Hourly Rate: $60
- Expertise: Branding, Software Development, Machine Learning, Software Testing...
Barrage's most significant focus is on creating high-quality digital products based on an exceptional user experience and customized software solutions, followed by innovative design, recognizable brand identity, and adequate customer support.
Experience with all relevant programs, software frameworks, and tools makes them specialists in business intelligence, backend and frontend development, blockchain, customer relations, and data center development.
The highest priority of their business is the high quality of each delivered product, exceptional user experience, and innovative design that accompanies a recognizable brand identity and effective customer service.
- Location: 1021 Isquare Corporate Park, Opp Sukan Mall, Science City, Ahmedabad, 380060, India
- Average Hourly Rate: $30
- Expertise: Software Development, PHP Development, WordPress Development, Magento Development...
Krishang Technolab is a web applications, eCommerce, custom software development, digital marketing, and mobile app development company that helps in different industry domains such as Retail, Transportation & Supply Chain, Financial Services, Real estate, Healthcare, etc.
In 7+ years, they have grown to serve more than 300+ global customers across the United States, Canada, United Kingdom, Germany, Switzerland, Netherlands, Middle East, Australia, New Zealand, etc. Their clients range from early-stage enterprises to Fortune 500 companies.
Krishang listens to its clients' ideas and creates custom software solutions from the ground up, designed especially for a specific business.
- Location: 2803 Philadelphia Pike, Suite B 191, Claymont, Delaware 19703, United States
- Average Hourly Rate: $50/hr
- Expertise: Mobile App Development, Website Development, Software Development IT.
Helping Fortune 500 companies sort through complex issues, Binmile Technologies ensures their clients reach their full software potential.
Binmile Technologie's combinative expertise in things like custom software development, mobile app development, experience design and quality assurance assure your business’ success in creating forward-thinking software.
Binmile Technologies has been recognized as one of the leading software development agencies offering affordable, expert services and has gained much industry recognition. Since opening its doors in 2017, Binmile Technologies has been bestowed with awards such as Top Software Development Companies for Banking Sector, Top 30 Custom Software Development Companies, Top Software Development Company in Indonesia and Top Software Testing Company.
Banking Software Development Takeaways
Banking software development needs extensive planning and technical expertise. That is why partnering with the right fintech software development company is crucial if you want to create a next-level banking software solution.