How to Develop Mobile-only Bank like Monobank in Ukraine?

Monobank is the first and the most successful neobank in Ukraine, which in a short period of time was able to attract a large number of customers due to its unique approach to banking services and excellent mobile app. In this article we will explore the factors that make Monobank so successful and how you can use this knowledge to create your own app for neobank to attract and retain new customers.

Step 1: Choose a business model

Monobank business model is based on the fact that the company provides all its services only through the mobile app and website, which allows it to reduce the cost of renting and maintaining physical offices. The first Ukrainian neobank offers its clients a wide range of banking services, including account opening, transfers, crediting and investing. The main source of income for the bank are transaction fees (transfers, bill payments, etc.) and interest on loans. In addition, Monobank also receives income from selling financial products and services to its customers, such as insurance, investments, etc.

You can use the following business models in your neobank:

• Fees. The classic business model that is used by most non-banking companies. It involves receiving a commission for every transaction that an unbanked customer performs through the app. It is a very simple and convenient option.


• Friction Fees. This business model is based on the idea that users are willing to pay for convenience and features not available at traditional banks. For example, for providing innovative loan products, investment services, insurance services, access to exclusive offers or discounts from partners, financial advice and more.


• Advertising revenue. A neobank also can earn from advertising, such as in-app advertising, advertising for affiliate (referral) programs, selling data about their clients, etc. This model is used by neobanks with a large audience of users and only as an additional source of income. Besides, these are usually affiliate programs, rather than a simple banner advertisement.


• API as a product. Banks provide an access to their APIs (Application Programming Interfaces) for developers that can use them to create their own applications and services. The bank may charge a fee for using the APIs in the form of a commission on transactions made using those APIs. The neobank may also provide various services or functionality through its APIs for an additional fee, such as access to financial reporting or analytical tools.


• Subscription. The essence of this business model is that users pay a monthly or annual subscription for access to additional services and privileges. For banks such as Monobank, it might mean providing additional features and services in the app, such as an expanded set of financial management tools or the ability to get a personal financial advisor.

Step 2: Hire a development team

Developing a mobile app for a non-bank like Monobank is a complex process that requires professional skills and experience. The development team should have not only excellent technical knowledge, but also understand banking processes, user needs and market trends. Merehead company has already had a great experience in financial applications development and is ready to offer professional help in creating a bank like Monobank.

What Merehead can offer to its clients:

• Experience and expertise. Merehead has more than 8 years of experience in mobile app development and creation up-to-date technically complicated web and mobile platforms. Our team consists of highly skilled professionals with years of experience in developing various solutions in FinTech, Banking, Logistics, Retail Blockchain and other areas.


• Transparency and communication: Merehead team keeps constant communication with clients throughout the entire project, ensuring transparency and openness in all matters related to the development process. This allows clients to be aware of all stages of the work, control budgets and project deadlines, as well as making quick decisions and introducing changes to the project in real time.


• Individual approach. Our company considers the individual needs of each client, developing a unique solution that meets their business goals, requirements and audience needs.


• Quality and reliability. Merehead guarantees the high quality and reliability of the developed product. Our team of professionals deals with each project with full dedication. We use advanced technologies and strictly observe all security and confidentiality standards, which are especially important in the financial sector.


• Cost and deadlines. We provide our services at reasonable prices and also guarantee compliance with project deadlines.

Step 3: Decide the unbanking functions

While developing a mobile app like Monobank, you will need to implement two user roles: the client and the administrator. To implement these two roles in your neobank's mobile app, you need to develop functionality that meets their needs and requirements.

Here are the functions that neobank customers need:

• Registration. A registration and authorization system needs to be developed to create a customer's personal account. Technologies such as OAuth, OpenID Connect or JWT can be used as an authentication mechanism.


• Account opening and closing. The client should be able to open and close accounts in your neobank's mobile app. It is important to provide the ability for selecting account currency and maintaining multiple accounts at the same time.


• Payments and money transfers. The bank customer should also have the ability to make payments and transfers both inside and outside of the app. Payment gateways such as Stripe, Braintree or PayPal can be used for this. It will also be important to add local payment gateways.


• Financial Asset Management. The app should allow the customer to manage their finances, such as viewing account balances, transaction history, setting limits and creating budgets. At the same time, these functions should be implemented as simply and conveniently as possible, so that the user understands immediately what to do and how to do it. To do this, you can use analytics and business intelligence tools such as Power BI, Tableau or Google Analytics.


• Notifications and alerts. Your mobile app also has to notify the customer about all events related to their accounts and transactions, such as account deposits, debits, currency exchange rate changes, approaching loan repayment dates, etc. You can use technologies such as Firebase Cloud Messaging or Amazon Simple Notification Service.


• Expense control (tracker). Features that allow customers to control how much they spend and where they spend it are incredibly popular. It would be a good idea to think about how to build an expense tracker using animations and graphics. This will help track spending and take your platform to the next level.


• Investment services and products. As a neobank, you will likely provide clients the opportunity to invest their savings in a variety of financial instruments such as stocks, bonds and funds as well as cryptocurrencies.


• Credit services and products. In your app, you can offer customers credit products with different terms and rates, which can be calculated based on an analysis of customer financial history data.


• Account Splitting. The bill splitting feature allows you to split bills and determine their value to the nearest cent. This is one of the recent "hits" of the fintech industry, brought to us by the rise of unbanking and the general trend of "online only" services and collaboration options. It became extremely popular with users during the pandemic and since then, it hasn't lost its effectiveness among end users.


• Speech recognition. Business owners often think about how to make a banking app that will get more attention from customers. Voice recognition is a very fashionable trend among top-notch software solutions. This tool allows people to perform many transactions without using their hands. Adding voice recognition to your banking app can help you to gain a great competitive advantage.


• Service support. Your app has to provide 24/7 customer service support, for example, through a chat or phone line. Technologies such as Twilio, Zendesk or LiveChat can be used for this.


• API integration. The app can integrate with other financial services such as payment gateways, bank APIs, payment systems, cards, social networks and more to enhance your neo-banking experience. This can help to improve the user experience and provide customers with a wider range of services. Third-party APIs such as ChatGPT, Google Maps, OpenWeatherMap, or LinkedIn can be used for this purpose.


• Cashback service. When developing a platform, consider different cashback options, such as choosing a reward category (grocery kits, cafes or restaurants, travel, car maintenance, etc.) or a higher percentage of cashback tied to spending amounts. Alternatively, you can create a banking app cashback system as part of a loyalty program, where the consumer receives a higher percentage of rewards after a certain amount of time using your platform.


• Chatbots. When starting to develop an app for your neobanking, remember that you can easily solve a number of your customers' problems with an online banking app equipped with a chatbot. Chatbots can solve problems around the clock and offer easy and quick access to bank services.

Here are the functions a neobank administrator needs:

• User Management. Allows administrators to manage customer accounts, block or delete them and also change their rights.


• Notification Management. A feature that allows administrators to customize notifications sent to clients, as well as to create and send their own messages.


• Product and Service Management. It allows administrators to configure appropriate settings and manage products and services provided by neobank, like loans, debit and credit cards, deposits, etc.


• Manage security settings. In this menu, administrators can configure security settings for the application, for example, limiting access to certain features or setting up two-factor authentication.


• Manage customer support. Here you can manage customer support by answering questions and resolving user issues via the built-in feedback system.


• Analytics and reporting. Allows administrators to view analytical data and create reports on application performance, as well as user behavior and other aspects of application usage.


• Transaction management. Here you can view and manage transactions, including fraud checking, objection handling, etc.


• Marketing management. Functions responsible for managing marketing campaigns and promoting the app by setting up advertising campaigns, creating promo codes or promotions, etc.


• Account Management. It allows you to view and manage customer accounts, including blocking or unblocking accounts, changing limits, etc.

Step 4: Design the platform architecture

To create a platform architecture similar to Monobank, first of all you need to determine the functionality and performance requirements of your application and take into account that your application's functionality can be extended in the future. In this case it's better to use microservice architecture, because it allows to divide non-banking system into separate components, each of them performing its own function and having its own API. This will make the application more scalable and flexible because each component can be developed and scaled independently from the others.



Here are the steps that can help in developing a microservice architecture for a neobank mobile application such as Monobank:

• Platform selection. You have to determine which platform the app will be developed for - iOS, Android, or both. This can affect the architecture of the app and the use of technology.


• Selection of the architectural pattern. It is necessary to choose the optimal architectural pattern for the application, taking into account its features and performance requirements. For example, Model-View-Controller (MVC), Model-View-Presenter (MVP), Model-View-ViewModel (MVVM) or Clean Architecture.


• Partitioning the application into modules. The modular partitioning of the application simplifies application support and expansion, allows more efficient management of dependencies and implements the principle of sole responsibility.


• API and database definition. It is necessary to define, how the interaction between the client application and the server will happen and also to choose the database for storing the information about clients, their accounts and transactions.


• Selection of technologies. It is also necessary to choose the technologies to be used in the development of the application, considering the performance and functionality requirements and the specifics of the chosen platform and architectural pattern. For example, Swift can be used for iOS development and Kotlin for Android.

Step 5: Develop the UX/UI design

User interface is an important aspect of any mobile app, including a non-bank app. A user-friendly and attractive app design helps to attract new users, retain existing users and increase the app's credibility. In addition, an effective design also increases the likelihood of returning visits and improves the overall reputation of the app, which in turn leads to increased profits.

Developing an effective design occurs as follows:

1. Market research. Analyzing competitors, researching user requirements and requests. This will help to understand what features and functions should be included in the app and how they should be implemented.


2. Creation of user scenarios. A team of UX/UI designers identifies user needs and develops scenarios which meet those needs in the best possible way. We end up with full-fledged user scenarios which describe how the customers will interact with the app in different situations.


3. Information architecture design. Creation of a structure and organization of the content which allows an effective navigation through the application. This implies defining the main sections, functions and content of the application, as well as developing diagrams and schemes which help to visualize the structure of the application. We get intuitive navigation that provides a quick access to the necessary functions.


4. Testing and finalizing prototypes. Testing the prototypes on real users in order to get feedback and identify any problems in the UX/UI design. This step involves several iterations, each including testing, analyzing the results and making changes.


5. Final design development. The designer uses all the results of the previous steps to create an attractive and effective app design. He determines the color scheme, typography, icons, animations and images to create a unique style and brand feel


6. Documentation Development. Preparing documentation for developers, (including specifications, use cases and design guidelines).

Step 6: Take care of neobank security

Developing a security system is one of the most important steps when creating a mobile app for a non-bank like Monobank. This is due to the fact that banks process money transfers and provide financial services, as well as store and process sensitive user data, such as logins, passwords, bank account details and more. Therefore, it is important to secure and protect this data from unauthorized access.

• Hack Protection: Code obfuscation, application whitelisting, file integrity checks, multifactor authentication and other methods are used to protect the application against hacking and prevent unauthorized access to user data.


• Data encryption: SSL (Secure Sockets Layer), TLS (Transport Layer Security), AES (Advanced Encryption Standard), RSA (Rivest-Shamir-Adleman), SHA (Secure Hash Algorithm) and other encryption algorithms are used to protect data transmitted through the application and stored on the server.


• User authentication: password, biometric data (fingerprint, face scan, voice recognition), SMS codes and other methods are used to authenticate the user before granting access to the application and its functions.


• Application and server authentication: Digital certificates, application integrity verification, HTTPS protocol and other methods are used to verify that the application and server are genuine and have not been compromised or tampered with.


• Malware protection: anti-virus, intrusion detection mechanisms, application whitelisting and other methods are used to protect the application from malicious programs such as viruses, Trojans and other types of malware.


• Access rights restriction: User rights separation, role management, audience and other methods are used to restrict user access rights to application functions and data according to their roles and tasks.


• Security monitoring: Event log analysis, alert systems, attack detection mechanisms, and other methods are used to monitor application security and quickly respond to possible security threats.

Step 7: Write the backend and frontend code

Backend. In a mobile application like Monobank, the backend is responsible for processing and storing user data, authorizing and authenticating users, processing transactions and performing business logic related to banking operations.

• Server operating system: Linux, Windows Server.


• Web server: Apache, Nginx or other web server for HTTP requests.


• Programming language: Java, Python, Node.js


• Framework: Spring, Django, Express.js.


• Databases: MySQL, PostgreSQL, Oracle.


• Caching solution: Redis, Memcached.


• Protocols: HTTP, HTTPS, TCP/IP, SMTP.


• Architectural style: RESTful, SOAP.


• Security: SSL, TLS, OAuth.

Frontend. In a neobank application, the frontend is responsible for interacting with the user and displaying the application interface. Specifically, the frontend provides the user interface, handles user actions, displays information on the screen, transmits data to and receives data from the backend. Thus, the frontend is responsible for providing a user-friendly and efficient user experience.

Step 8: Test the created product

Testing is also an important aspect in the development of all banking applications where the security and reliability are critical for the success of the project. It identifies bugs and defects in the application, improves its quality and also ensures its safety and reliability. It includes functional, integration, load and system testing, as well as security and compliance testing.