The finance world is experiencing a wave of neobanks to fill the gaps traditional banks have left bare. These contemporary banks are exclusively online with no physical locations. They provide multiple banking solutions such as loans, transfers, and necessary payments. They act like traditional banks, save for long queues and rude counter workers.
So, how do you start a bank devoid of all its extensive physical structures in Czech republic? This article explores the intricate process of creating a neobank from its conceptualization to launch. It also unveils the innovations, challenges, and intricacies surrounding a neobank's foundation.
Conception and Planning:
The Genesis of a Neobank
Every decent MSB starts with a clear vision and mission. You can take inspiration from the neobanks on the market to gain direction. With that in mind, here are the steps to take to ensure your neobank fits into the financial space:
● Conduct Thorough Market Research: What are the odds of your neobank succeeding? When you embark on your research, define your intended market. Explore the audience's pain points so you know what to solve. Also, spot the problems your competitors struggle with.
● Define your USP (unique selling point): In the financial market, neobanks are shaking things up. Hence, there are many of them. You must define your selling point to get ahead of the competition and stand out. The best way to go about a selling point is ensuring it aligns with the needs of modern customers.
Regulatory Landscape:
You need a license to launch a neobank that offers financial services. Contrary to just getting a full banking license, the recent regulatory landscape has shifted. As an intending neobank, you can get a PI (payment institution) or EMI (electronic money institution) license. The licenses allow your neobank to handle most banking services.
The EMI license offers access to multiple financial services including creating a crypto IBAN and owning a digital currency. In contrast, a payment institution license allows your neobank to act as a payment service provider enabling digital payment solutions.
If you want all the services traditional banks have, it would be best to get a banking license. But this option is much more challenging to come by. Seek financial advisory about how to navigate digital finance in your region and the necessary licenses it entails.
Architecture and Infrastructure
Building the Digital Backbone:
A proper technical architecture is the digital backbone of neobanks. You need to consider factors like cloud computing. Cloud computing is responsible for hosting your product's infrastructure on remote servers. They help with scalability and flexibility, among other incredible perks.
Your neobank need the help it can get, which include intregrating robust technology stacks and frameworks to guarantee seamless operations. We have helped several neobanks launch from 2017. Moreover, we have a white-label solution and SaaS for launching the neobank together with the required technical support. Undoubtedly, it's crucial to choose the right partner in this journey. And no option is better suited to offer the all-round solution we provide. We ensure your neobank launches as it should!
Security Fortifications
When you opt to provide financial services, security tops the list of things to consider. Digital finance has attracted many skeptics regarding its security. Indeed, digital banking is more prone to attacks than its brick-and-mortar counterpart. Hence, your neobank should incorporate several security measures that ensure a seamless and user-friendly experience.
Use encryption protocols, secure APIs, and real-time threat detection strategies. Putting up a more secure front is vital to safeguard customers' funds and transactions, which boosts the overall integrity of your MSB.
Core Banking System Integration:
Connecting the Dots: API Integration
Your neobank needs a seamless connection with core banking systems, and that's where API comes in. APIs enable your neobank to connect and adequately exchange data with payment processors, financial institutions, or third-party services. Here are the APIs we are connected to and other integrations:
Safeguarding:
● LPB
● Clear.Bank
● Banking Circle
● LHV
● Incore
● RIETMU
Payment Rails:
● OpenPayd
● ClearJunction
● GuavaPay
● Satchel
● Currency Cloud
● Currency One
KYC AML:
● Sumsub
● ComplyAdvantage
● LexisNexis
Payment Methods:
● SEPA
● SEPA instant
● Swift
● Chaps
● Bacs
● Faster payment
Note: We can connect with any API upon request on existing solutions.
Transaction Processing:
Behind every excellent neobank is a well-thought-out transaction processing. Ensure you unravel the intricacies and test its real-time capabilities alongside fraud detection. You also have to consider if you want your neobank to act as a VASP Czech republic or get involved in crypto processing transactions. These questions serve to point you to the right direction.
Moreover, do you intend to make your neobank via for open banking for gambling? This question can steer your technology to better suit gambling payments. Iron out the technical considerations to ensure secure and efficient financial transactions for smooth sailing of your neobank.
User Experience and Interface Design:
Design Thinking in Neobanking:
The user interface can make or utterly destroy your neobank. Opting for neobanking is taking a user-friendly and intuitive approach to the design. Your neobank has to be secure, accessible, and intuitive. Many of the top neobanks on the market incorporate modern-looking interfaces, responsive layouts, UX/UI best practices, and personalized user journeys. And so should you! This way, you stay ahead of the competition as your app is more approachable.
Mobile App Development:
When building a user-friendly neobank, you need the best software engineering approach. Engage software engineers versed in financial technology as they know how to create a feature-rich mobile app. Choosing the right technologies ensures you release a suitable product with features such as seamless navigation and biometric authentication.
You don't have to look far to find the best mobile app development solution provider. Our solution already is on App store, and we can create it for you in under two months!
Launch and Beyond:
Go-Live Strategies:
Once you have integrated a proper workflow with the backing of robust software engineering, the next is to go live. However, before you go live, there are some strategies to note. Consider phased rollout! Phased rollout reduces the risk of failure. It allows your team to closely monitor the progress of the product release and fix challenges in real time. You also need to integrate plausible scalability plans.
Post-Launch Optimization:
Creating an exceptional neobank doesn't end at the launch. Your neobank has to consistently implement optimization strategies and fintech innovations. It must adapt to growing technological trends and address evolving customer demands. Even if your neobank succeeds in its launch, it can be outpaced if it remains stagnant. Use analytic tools to monitor trends and refine your neobank's performance over time.
Conclusion
Building a neobank from scratch is an intricate technical journey from conceptualization to launch. Whether you hope to create a neobank with mobile wallet services or something much more, there are several factors to consider.
Our detailed exploration provides you with valuable insights into the complex technical landscape of creating a neobank, underscoring the meticulous planning and execution involved in bringing a modern financial institution to life. Undoubtedly, it might seem exhausting. But you don't have to sail through alone. That's what we are here to offer. Book a free financial consulting with our experts now and start creating your neobank immediately.
