Co-Founder and CEO Konstant Infosolutions
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Mobile-Only Banking: The Dark Horse in The FinTech

29th Mar 2018
Co-Founder and CEO Konstant Infosolutions
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Mobile phones, since inception, have subsumed a large number of products and services. From alarm clocks and calculators to maps and digital cameras, the palm-sized device boasts of it all. But what’s even more exciting, there are countless more ways it is being used by top-notch companies of the world.

The next in line is your wallet, your credit cards or to be more generalized, all your financial activities. As most of the transaction-intensive services including shopping, bill payments, booking, among others, have gone digital, we have registered a massive spike in cashless transactions over the years.

But as much as the financial behavior of the customers has changed, the financial institutions still rely on the traditional framework- i.e brick-and-mortar branches spread all over the cities with mobile apps deployed merely as an extension. Until a UK-based Atom Bank came forward with an innovative concept of mobile-only bank.  nobody ever thought of dedicating their processes to mobile phones. Once the Atom Bank registered explosive growth, many other banks and financial institutions  realized the potential of the model and followed the suit.

Why mobile-only banks?

Since majority of transactions are done digitally today, it makes little sense for banks to invest heavily in setting up offices in every city, hiring and training employees to handle them, only to have customers who get annoyed at the prospect of visiting a bank, waiting in long queue.

A much more feasible way is to bring onboard a top mobile application development company, carefully analyze the technologies and scalability that goes behind the digitization of banking services and create a fully operational mobile-only bank that each customer can have in their pocket.

Mobile-only bank model

The growth of Atom bank, which we mentioned earlier, was so explosive that at one point, it had to actually decline accepting new customers. So, the question is, what do mobile -nly banks offer that the traditional banks can’t? The answer is simple- more money.

Since mobile-only banks do not have to set up multiple offices, neither they have to employ a large number of banking professionals nor invest in logistics, the money they save can be easily passed on to the customers in the form of higher interests. And if we know anything about banking, it is this- that customers flock wherever money is.

So, that’s about customers. How do you, as a business owner, make money from mobile-only banking?

The first is, of course, the massive investments and operational costs that you save. Second, since it is proven that this model attracts a large number of customers, you can hand out loans to small and medium enterprises to create a consistent channel of revenues. Apart from these, being an online bank comes with many more perks of its own. You can, for example, easily align with eCommerce portals and major points of expenditure to offer better deals to your customers, thereby boosting their sales, offering exclusive discounts to your customers and making money for self in the process.

There are also many other profit-making business models that you can test once you have your banking app up and running.

Yes, mobile-only banks are convenient and offer higher returns. But what if customers do need cash?

Creating a mobile-only bank means that you won’t have to set up any physical entities, which doesn’t suggest that you can’t use the infrastructure of other banks as well. You can, of course, offer them physical cards that they can use at other bank’s ATM to withdraw cash. On the same note, you must ensure that such services come under paid services, to be bought by the customers or available only for premium customers.

Now that it is clear why mobile-only banks are gaining traction and how you can use them for your benefits, let’s take a look at some of the factors that you must keep in mind before starting the venture- features that your mobile app developers must incorporate in your app:

License and regulations- Unlike most of the other enterprises, starting a bank, even a virtual one, requires an elaborate set of government approvals and licenses. Not only are those essential for gaining the trust of your customers, but you must also abide by all such regulations if you wish not to get into legal troubles.

Security- It goes without saying that when you are getting into the banking business, security must be on the top of your list. From deploying sophisticated encryption mechanisms to multiple-factor authentication, use all the tools and technologies to keep your app and related data secure.

UI/UX- Since convenience is one of the main selling points of this banking model, ensure that your app really justifies the hype around it with a flawless interface and intuitive user experience.

So, whether you are an entrepreneur willing to bet big on this upcoming financial revolution or an enterprise looking to diversify your portfolio by entering into this lucrative space, if you have a long-term vision, we have the appropriate infrastructure and expertise to make it happen. Get in touch now to discuss your proposal.

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