How to start NEO Bank in UK

February 19, 2025

Brick and mortar, paperwork and long queues are not the vision of tomorrow in the banking industry. Yes you read that right! Technological advancements have made many big changes in the 21st century, digitizing everything, and banking services are no exception. Several enthusiasts from UK has adapted this as their business strategy and enjoying a profitable growth. 

Like the rise the online payment solutions that changed the way people manage their transactions, the Innovative approach Neobank is making its stronghold in the industry. The market has started toi grow at a compound annual growth rate of 47.1% from 2024 to 2033, out of which the current market size value is $262.36 billion. 

This testimony shows that Neo Banking market size is proliferating and showing no signs of slowing down. Thus, you can expect to generate incredible profits by developing a Nebank. 

Curious to know how to start a Neobank? 

This post has all the answers to your queries. Below, we have discussed everything, from developing a neobank from scratch, and Neo bank development cost to Neobank business model. Keep reading! 

What Is A Neobank

Neobank is a financial organization that operates entirely online, without needing any physical banks.  Usually, neobanks are licensed financial organizations that conduct financial transactions and perform offline bank functions independently. 

Key Drivers of Neobank Solutions 

Since you are aware with what the neo-banking solution is, let’s find out the key drivers for this banking requirement: 

• Technological Advancements: AI, ML, and Open Banking APIs enhance security, automate tasks, and personalize services. Neobanks focus on user experience, making digital banking faster, smarter, and more efficient.

• Changing Consumer Preferences: Users want seamless banking, like online shopping. Neobanks offer 24/7 access, instant updates, and easy navigation—eliminating queues and outdated systems, ensuring everything happens instantly on mobile.

• Cost Efficiency: Without branches, neobanks save costs, offering lower fees and better rates. Digital processes replace paperwork, reducing expenses while maintaining smooth, reliable customer service.

Features Integration in NEO bank 

To incorporate efficiency in a Neo bank app development, it is important to know the audience’s interest well. Several features are famed for effortlessly attracting a huge audience base. Explore some of them: 

Key features To include developing a neobank from scratch

• Onboarding: Guide users through the app step by step, helping them explore features, complete transactions, and manage their accounts with ease. A simple and quick setup encourages users to stay and explore further.
• Know-Your-Customer (KYC) System: Verify users to keep accounts secure and prevent fraud. A reliable KYC process builds trust and ensures only genuine users access financial services.
• Personal Account Management: Give users full control over their accounts. Let them update personal details, change settings, and manage security preferences without hassle.
• Customer Support: Ensure users can reach support anytime they need help. AI chatbot-integrated In-app messaging makes it easy to connect with representatives for quick problem resolution.
• Card Issuing: Allow users to get physical or virtual cards instantly. Let them choose a suitable provider and manage card settings directly from the app.
• Transaction History: Show users a clear breakdown of their spending. Allow them to track payments, check balances, and review past transactions anytime.
• Payment Templates: Speed up transactions with pre-set payment details. Users can save templates for recurring payments and complete transfers in seconds.
• Notifications & Reminders: Keep users informed about account activity, payments, and important updates. Alerts ensure they never miss a transaction or deadline.

Advanced Features to Stand Out

• Cashback: Reward users with a small percentage of their purchases. Different categories can have different cashback rates, encouraging spending within the app.
• Changeable CVV2: Protect card details by letting users update their CVV2 code regularly. This adds an extra layer of security if a device is lost.
• Referral System: Let users earn rewards for inviting friends and family. This encourages growth and keeps existing users engaged.
• Accumulating System: Help users save money for specific goals. A set amount automatically moves from checking to savings, building funds over time.
• Stocks: Let users buy and sell shares directly from the app. A simple interface makes stock trading accessible to everyone.
• Cryptocurrencies: Allow users to store, send, and receive digital currencies like Bitcoin and Ethereum. Secure storage and easy transactions make crypto management effortless.
• Budgeting: Help users set spending limits for essentials like groceries, bills, and entertainment. A well-organized budget ensures better financial control. 

A Step-By-Step Approach to Developing a neobank from scratch

If you plan to launch your NEO banking platform, go step by step for a smooth venture. Explore the steps mentioned below: 

Market Research & Planning

Before jumping into development, take a step back and understand the market. Study customer needs, analyze competitors, and identify gaps your neobank can fill.  Set clear goals, decide on core features, and map out a timeline. A well-thought-out strategy saves time and avoids unnecessary costs. The more you know about the market, the better you can shape your app to attract users.

Security Compliance

Banking apps deal with sensitive financial data, so security must be airtight. Follow all banking regulations, get the necessary licenses, follow data protection laws, and set up fraud detection. 

Strong encryption and authentication methods keep hackers out while giving users confidence in your platform. Without proper safeguards, even the most well-designed app can lose users overnight. High-end security makes people trust your neobank. 

Hire the Right Development Company

The team behind your app makes all the difference. Look for a company with experience in banking technology, security, and compliance. Review their past projects, check client feedback, and see if they understand your vision. 

A skilled team builds an app that runs smoothly, scales well, and keeps users engaged. Don’t rush this step—choosing the wrong developers can lead to delays, poor functionality, and security flaws. The right partnership sets the foundation for a solid, long-lasting neobank.

Integrate User-Centric Features

A neobank isn’t just about handling money—it should make banking easier. Features like instant payments, budgeting tools, spending insights, and personalized financial advice keep users engaged. Consider adding savings goals, cashback rewards, and virtual cards to make the experience more rewarding. 

Focus on what real people need rather than adding unnecessary extras. The right features encourage users to rely on your app for everyday banking instead of seeing it as just another account.

Choose the Right Business Model

How will your neobank make money? Some apps earn through transaction fees, while others offer premium subscriptions or lending services. Study what works in the industry and decide on a revenue model that aligns with your target users. 

Keep costs fair and transparent—hidden fees drive customers away. A clear, well-structured model keeps your app profitable without frustrating users. The right approach turns your neobank into a long-term business rather than a short-lived experiment.

Choose UX Designs

Looks matter, but function comes first. A well-designed app guides users effortlessly, reducing frustration and confusion. The best UX feels natural—buttons are where people expect them to be, and actions take only a few taps. Colors, fonts, and animations should enhance the experience, not distract from it. 

Run tests to see how users navigate the app and adjust based on feedback. If the interface feels intuitive, people will trust it with their finances and keep coming back.

Secure Your Solution

Strong security keeps users safe and protects your business from fraud. Multi-factor authentication, real-time fraud alerts, and secure login methods stop unauthorized access. Encryption keeps transactions private, while AI-powered security tools detect suspicious activities. 

The stronger your security, the more users will trust your app. Financial data is sensitive, and one breach can ruin a neobank’s reputation overnight. Stay ahead of cyber threats to keep accounts secure and maintain a trustworthy platform.

Test & Deploy the Neobanking Platform

Before launching, test every part of the app to catch issues before users do. Check transaction speed, fix bugs, and make sure security features work under pressure. Run beta tests with real users to get feedback and fine-tune the experience. 

A smooth launch builds trust and attracts more signups. Once the app is live, keep improving it based on user behavior. A neobank isn’t a one-time project—it grows with its users, and regular updates keep it fresh and competitive.

Regular updates & maintenance

Launching your neobank is just the beginning—continuous updates keep it relevant and competitive. Regular maintenance fixes bugs, enhances security, and improves user experience. Monitor user feedback to introduce new features that meet evolving needs. Stay ahead of regulatory changes to ensure compliance. A well-maintained app builds long-term trust and user loyalty.

Neo Bank Development Cost

Developing a neo bank from scratch can range between $30000 to $3,00000, depending on factors-to-factors. The type of platform you choose, the integration types, and how technologically advanced your Neobank is all impact the overall price range of the online banking software development. 

In case you want to know more about investment needed in the project, consult with proficient development companies to get accurate insights and bring your vision to life!

Note: This table will give you a general idea of the banking software development phases. 

Development Phase	Estimated Cost (in $)
Requirement Analysis & Planning	5k – 10k
UI/UX Design	7k – 15k
Backend Development	20k – 50k
Frontend Development	15k – 30k
Database Design & Integration	10k – 20k
Feature Implementation	30k – 60k
Testing & Quality Assurance	8k – 15k
Deployment	5k – 10k
Maintenance & Updates	5k – 15k per year

How Do Neobanks Make Money

Neobank applications use different ways to earn money. Choosing the right approach depends on your goals and target users. Each model has its strengths and works best under specific conditions. Explore how do neobanks make money and strategically build your own.

Transaction-Based Revenue Model

Neobanks earn money through fees every time users make purchases through the app. This works best for businesses with a large customer base because more transactions mean more revenue. Keeping fees reasonable encourages users to stay active, while rewards and cashback programs can boost spending.

Credit-Based Revenue Model

Neobanks bring in money by giving customers access to credit cards and personal loans. Competitive interest rates and flexible repayment plans attract users who need quick and easy credit. A strong credit system builds customer trust and keeps them engaged over time, turning one-time borrowers into long-term users.

Interchange Fees Revenue Model

Neobanks get a share of fees whenever users make payments with their debit cards. Payment networks like Visa or Mastercard charge merchants a small fee per transaction, and neobanks earn a portion of it. As digital payments grow, this model keeps revenue flowing without charging customers directly.

Subscription-Based Revenue Model

Some neobanks charge users a fixed monthly or yearly fee for premium services. These plans often include benefits like higher transaction limits, better customer support, or exclusive financial tools. A subscription model ensures steady income while giving users extra value, which keeps them engaged and less likely to switch to competitors.

Partnership and Integration Revenue Model

Neobanks can increase earnings by working with financial companies to bring in additional services. Insurance, investment tools, and business loans can all add to the app’s value while generating extra revenue. This model works well for neobanks looking to expand without spending heavily on new features.

Let Richestsoft drive your Neo banking services

Finding the right expertise while startiung a Fintech business via Neo solution is critical, and finding the banking software development company is tough.  What comes to your mind when you hear about the best mobile app developers? A long list of names that leave you unsure?

Let’s be real—if your app doesn’t work the way you expected, every dollar spent on development goes to waste. That’s why choosing the right mobile app development company matters more than anything. RichestSoft builds apps that help businesses stand out in the market.

We take our clients’ concerns seriously and set ourselves apart with solutions that bring real results. Our team works with a clear focus on business growth and seamless integration with global trends. Here’s why businesses trust us:

• Our dedicated developers bring fresh ideas and top-tier execution that set our services apart.
• We follow a structured approach that keeps projects on track and delivers strong results.
• Our Android app developers work closely with clients, offering flexible ways to bring their ideas to life.
• Businesses looking to grow their teams can count on us to connect them with skilled professionals who match their needs.
• Our developers follow strict guidelines to ensure apps function smoothly and meet industry standards.

Conclusion 

In all, we hope you are all aware with how to start a Neo bank in UK. Remember, its not a one day process, it requires— patience, time, and right expertise. And we are the professionals that will bring your banking vision to a sustainable business deal. 

At RichestSoft, we offer cutting-edge technology and expert teams to create innovative digital banking solutions tailored to your needs. Partner with us to leverage advanced technologies like AI, ML, and Open Banking APIs for a seamless and personalized customer experience. Get in touch and revolutionize your banking services.