How to start a Neobank app in 6 easy steps

Building a neobank app is at the heart of launching any digital banking experience today. From onboarding users to handling transactions in real time, the app is your main touchpoin with customers.
But behind every smooth, secure, and scalable neobank app is a clear development strategy. In this article, we’ll show you 6 essential steps to go from idea to launch, and help you build a digital banking app that meets morden expectations.

6 steps to build a neobank in 2025

It takes about 3 to 12+ months to build a neobank app from scratch, or rather its MVP version. The application development alone already accounts for 1600 hours, not to mention the time you need to acquire banking licenses and perform other activities. With that said, let’s go over the 6 steps you need to follow to build a neobank from start to finish.

Step 1: Research the neobanking landscape and identify your niche

Time frame: ~3 weeks

Rushing to build a neobank app without a strong understanding of the market often leads to poor product-market fit and wasted resources. That’s why your first step should always be a deep dive into your target audience and the broader digital banking landscape.

The goal of this initial analysis is to find your niche. It’s all about identifying the unique value you can offer that resonates with specific customer profiles. Here’s how to find areas where your neobank will have the most impact:  

• Start by segmenting the market into smaller groups. For example, low-income users may need easy account setup and no-fee services, while SMEs and freelancers value features like automated invoicing or cash flow tracking. Pinpoint the specific pain points and habits of each segment.
• Then, study the competition. Are existing neobank apps truly solving those pain points? If not, that’s your opportunity. Find gaps or frustrations and ask: what can we do better or differently?
• You want to offer what no one else can do or do better. It can be an advanced technology solution, a focus on ethical banking, or an excellent customer experience. However, make sure the USP aligns with what the demographic needs.   
• Finally, don’t forget to check regulatory constraints early on. Ensure your concept can comply with requirements such as GDPR, AML, or eKYC. You don’t want to design a brilliant app only to find it’s not legally viable.

The world’s most successful neobanks follow the exact 4-step analysis. Let’s take a look at Chime. By identifying underserved Gen Z and millennial users dissatisfied with traditional banks, they built a no-fee, mobile-first neobank that quickly scaled to over 22 million users. That level of clarity in audience and offering is what sets market leaders apart.

Pro tip: Leverage tools to make market research easier. Use Google Trends and Statista to gain insights into neobanking demand, trending financial topics, and growth projections. For competitor analysis, go with CB Insights. Direct customer research through surveys and focus groups, alongside social media listening tools like Brand Watch or Hootsuite, can reveal underserved pain points of existing neobanks. 

Step 2: Develop a business plan 

Time frame: 3 – 6 weeks 

Do you know that only 5% of neobanks manage to reach breakeven, not to mention turning a profit? That’s because your idea is only as good as how you build a business around it. Without a strategic way to monetize, most neobanks will go under in a few years.  

Here are 3 proven business models for neobank apps:

• Freemium: This model offers basic banking services for free to attract users, then monetize through paid premium features. Choose this model if your neobank targets younger demographics or customer bases who prefer free features. Revolut follows this strategy and only charges for novelty features such as travel insurance, higher foreign exchange limits, and exclusive cards. 
• Subscription–based: Neobanks can charge monthly or yearly fees for their services. Choose the subscription model if your neobank offers a suite of services, or targets users who prefer predictable costs. N26 offers tiered subscription plans. Users can pay more to upgrade their tiers, unlocking additional benefits, such as insurance packages and priority support. 
• Interchange fees: You can charge users a fee for transactions made with their debit or credit cards. The merchant’s bank pays this fee to your neobank for processing the transaction. However, for this model to work, you’ll need to have a strong connection with card networks and payment processors like Chime. They charge $2.5 for each out-of-network ATM withdrawal.

Unfortunately, having a sound business model won’t automatically launch your neobank. You’ll need a substantial upfront investment or capital to ignite it. For example, the UK requires at least $6.4 million in capital to kick-start a bank.

Raising that amount of capital can be really tough if you don’t know how to pitch to investors. 

Prepare a compelling pitch grounded in solid market research. Highlight your competitive advantages, potential market size, and growth projections to excite investors. Also, look beyond traditional venture capital and angel investors. Crowdfunding platforms are great alternatives, especially since we’re talking about digital-savvy investors. 

Pro tip: Mix multiple revenue streams. For instance, combine a freemium approach with lending services if your user base spans both value-driven younger demographics and SMEs needing financial products. The key is to always provide what your users need. 

Step 3: Obtaining a banking license 

Time frame: 3 – 12+ months 

You can’t launch a neobank app without a license, or at least, access to one. But now all licenses are equal, and choosing the right type can save you time, moeny, and legal headaches. Here are four common options:

1. Use a BaaS provider

The fastest and most flexible route for startups. BaaS providers give you white-label infrastructure and handle regulatory compliance, letting you offer licensed financial services without owning a license yourself. 

2. Payment institution license (PI)

This is the “lite” version of the EMI license. It allows financial institutions to carry a variety of payment services by card, mobile app, transfer, or direct debit. The PI can also support cash withdrawals, account deposits, and foreign exchange transactions. As a PI, you cannot issue long-term credit or accept customers’ deposit checks.

Applying for a PI license only takes around 3 – 12 months and $450,000 in minimum capital.

3. Electronic money institution license (EMI) 

For neobanks with less robust suites of services, an Electronic Money Institution License is a better fit. It allows digital payment services and the issuance of electronic money. However, an EMI cannot issue credit and must use a partner bank to handle customers’ funds.

The application process for EMI licenses is also shorter (6 – 12 months) and less expensive. To be eligible as an EMI, your neobank needs at least $3 million in capital.

4. Full banking license or credit

This is the most comprehensive license. It allows a financial institution to carry all the services of a “traditional bank”, such as accepting deposits and issuing credit cards. If you plan to build an independent neobank, you must have a full bank license to operate legally.

Applying for a full banking license can take up to 18 months and cost up to $300,000. Typically, to be recognized as a functional bank, you must possess a minimum of $10 million to $20 million, to ensure financial stability and absorb potential losses. You must also promise to uphold regulations about anti-money laundering (AML), customer due diligence procedures, and data protection.

Pro tip: To move fast, start with BaaS or EMI. REserve full bankning licenses for when you’ve scaled, secured funding, and are ready to go independent.

Step 4: Design & Build your neobank platform 

Time frame: 4 – 8 months 

This is where your idea becomes a tangible product. A reliable, scalable platform is essential to process user transactions securely, deliver a smooth customer experience, and meet regulatory expectations.

Here are the key components to build:

• The core banking system: The platform should run basic banking features seamlessly. Make sure it can perform essential functions like managing accounts, processing transactions, and maintaining customer records without hiccups. Don’t skim on security measures.  
• Mobile app: This is the primary touchpoint where customers interact with your services. The app should be seamless and intuitive. Include modern features such as real-time notifications and biometric authentication.  
• APIs: If your system integrates with existing infrastructure, also pay attention to APIs. These are crucial for connecting with third-party services and facilitating open banking. Also include support for card processing and back-office tools.  

For the development team, you have three options: assemble an in-house team, outsource to a partner, or pick up white-label neobank solutions. In-house development offers complete control over the project but demands significant investments. Outsourcing grants access to a wider talent pool but may pose challenges in communication. Meanwhile, pre-built white-label platforms allow for rapid deployment at the cost of less customizable frameworks.

If you want to launch a Neobank quickly white still keeping it customizable, feel free to talk to us. We use customizable white-label solutions to make it happen and are pretty sure you will have fully functional neobank platform.  

Step 5: Test your neobank app thoroughly

Time frame: 4 – 6 weeks  

Before launching, make sure your neobank app is secure, stable, and compliant. As a financial product, even small issues can lead to major risks or loss of trust.

Key areas to test:

• Functionality: Test key user flows like registration, transfers, withdrawals
• Security: Run penetration tests, verify 2FA, and ensure sensitive data is encrypted.
• Compliance: Check alignment with GDPR, AML, KYC, and display all required legal infor
• Performance: Simulate high user loads and monitor reponse time and system stability
• User testing (UAT): Involve real users to identify pain points in UX or onboarding.

Pro tip: Consider a soft launch or beta release to validate real-world performance before going public.

Step 6: Launch and scale your neobank  

Time frame: 1 month+ 

Once your system has ticked all the boxes, it’s time to release it! How successful the launch is will decide how well your neobank is received and set the stage for future growth.  

To ensure a smooth deployment, be sure to check the following:  

• Pre-launch: Before D-Day, test everything. You don’t want any features failing at launch. Gather as much attention as possible and build anticipation. Run teaser campaigns, countdowns, and targeted advertisements to attract potential audiences.  
• Launch Execution: Your launch event should highlight the unique features and benefits of your neobank. Utilize media coverage, social media, and digital marketing to maximize visibility. Offer exclusive benefits for sign-up at launch to attract initial users.  

However, launching the neobank is just half of the story. Post release, shift your focus on monitoring the platform’s performance and scale. Your neobank should be able to support increased traffic and requests as it grows. Excellent customer service is also important. It can act as a source of feedback that helps you evaluate and upgrade your offerings.  

Another key point is to always look for opportunities for expansion. Globalization greatly increases your potential customer base, but it’s hard to get it right. Entering a new market means re-exploring customer preferences, the legal landscape, and local competitors. Each country/region is different, so you have to do your diligence to find an entry strategy.  

Take Revolut for example. Instead of offering banking services themselves in the US, Revolut partners with local banks, operating as a BaaS provider rather than a full-fledged neobank. In Singapore, Revolut tailored its offerings to meet the needs of Southeast Asian users. It opens new multi-currency accounts and SME banking services to enhance liquidity management and cross-border transactions.

Pro tip: Numbers don’t lie. As a neobank, you will collect a lot of data as your operations expand. Leverage it to find insights into your customers’ preferences and their needs. These can power the growth of your business.  

How much does it cost to start a neobank app?

The cost of building a neobank app typically ranges from $80,000 to $700,000, depending on its complexity and the features you want to include. Here’s a breakdown based on different complexity levels:

Complexity	Features	Estimated cost (USD)
Basic (MVP)	– User registration & KYC – Check balance & transactions – Basic mobile UI – Admin dashboard	$80,000 – $150,000
Medium	– All MVP features – Budgeting tools & analytics – Push notifications – Virtual card support – API integrations	$150,000 – $300,000
Advanced	– All Medium features – Multi-currency wallets – AI-based insights – Crypto wallet support – Premium UI/UX – Cross-border payments	$300,000 – $700,000+

Note: These figures refer to the app and platform only, they don’t include banking license costs. If you plan to operate under your own license, that will add significant cost and time.

It’s time to launch a Neobank

We hope this blog helps you understand what it takes to start a neobank. Chances are, you now have even more questions than when you started reading this blog – and that’s completely normal.  This journey requires constant learning, asking the right questions, and finding the best solutions. 

Here’s one of our case studies of how we helped our client build a scalable Neobank platform.   

If you’re ready to take the next step, you can book a call with us. Our team is here to help you turn your vision into a functional digital bank.

Wrapping up

That concludes our guide on how to start a neobank in 2025. We hope the 6-step instruction above has inspired confidence in navigating this new iteration of digital banking.  

All in all, building a neobank now is promising, but not easy. It requires careful planning, a deep understanding of market needs, and a strategic approach to technology and regulatory compliance. However, with the right dedication and a little help, you can transform users’ banking experiences and shape the future of neobanks.