Common misconceptions in mobile banking app development
There’s quite a lot of ground to cover, and it may seem like a one-off task at first. What’s not visible are the underlying costs for maintenance, regulations, and transfer fees.
‘Users only see a 'Transfer' button that moves money in seconds,’ says Linardas Saldukas, Head of Strategy Consulting at Baltic Amadeus. ‘They don't see the licences, SEPA routing, fraud-screening engines and dozens of regulatory rules that sit behind it. Yet if the process feels slow or clumsy, they'll leave for a competitor in a heartbeat.’
1. ‘A banking app is just another mobile app.’
In reality, the goal is narrow: check a balance, approve a payment. Every additional tap costs users patience, and compliance layers – PSD2 (Open Banking), GDPR, AML/KYC, DORA – add both complexity and liability. Non-compliance can wipe out a meaningful share of annual revenue.
2. ‘The big spend ends at launch.’
Operating system updates, new regulatory guidance and evolving cyber threats demand continuous improvement. PCI-DSS certification alone can add €15,000–€50,000 a year, depending on transaction volumes.
At the same time, advances in automation, artificial intelligence, and compliance readiness are making it easier and more cost-effective to manage operational and regulatory requirements.
‘A fintech application should be viewed as a living product rather than a project with a finish line. Organisations that adopt this mindset early can make more informed investment decisions, maintain greater cost predictability, and achieve more sustainable growth,’ notes Simas Simanauskas.
3. ‘Transfers are almost free for the provider.’
Only part of the cost is in the provider's control. Mandatory fees – clearing-house charges, scheme-participation costs, risk checks – still apply. The German Bundesbank, for instance, charges €0.0017–0.0069 per SEPA entry before any internal costs are factored in.
What's beyond the price tag
For an app that costs €150,000 to build, organisations should budget an additional €22,500–€37,500 a year just to stay safe and compliant. Security and regulatory demands typically add 20–40 per cent to the initial development budget.
‘These amounts strike many as unexpectedly large, because the market is still dominated by the belief that digital banking is simply an app with a good user experience. In reality, just to keep the app running securely and meeting the required standards, an additional 15–25 percent of the initial amount must be invested every year. And that's every year, for as long as the product stays on the market,’ says L. Saldukas.
Ongoing investment extends far beyond software maintenance. Financial institutions must keep their infrastructure resilient, perform regular security testing, continuously update systems, manage evolving cyber risks, and maintain compliance with industry standards such as PCI DSS. Total operating costs are also influenced by the broader payments ecosystem, including customer identity verification (KYC), payment processing infrastructure, and interbank settlement services.
As customer numbers and transaction volumes grow, fixed technology, infrastructure, and compliance costs can be spread across a larger operational base, reducing the cost of each individual transaction.
‘The payments business is fundamentally a volume business. The more transactions an institution processes, the lower the unit cost per transaction becomes, regardless of whether it builds its own infrastructure or sources payment capabilities from external partners. Pricing is therefore not arbitrary. It reflects how efficiently an organisation manages scale, risk, and infrastructure,’ says S. Simanauskas.
For financial institutions, this means that competitive advantage is often determined less by the amount invested in technology and more by how effectively operations are managed. Investments in automation, modern infrastructure, and streamlined compliance processes can significantly reduce long-term operating costs while enabling organisations to offer more attractive services and pricing to their customers.
Room for new entrants
While new entrants are no longer competing with traditional banks but rather with fintech leaders that have set exceptionally high standards for digital experiences, success increasingly belongs to companies that can combine intuitive user experiences with robust operational processes and a scalable technology foundation from day one. These organisations typically:
- Target a narrow niche where they can excel.
- Leverage proven infrastructure rather than reinventing it.
- Release updates monthly, matching the cadence set by global fintech leaders.
Trying to build everything from scratch at once, including the core infrastructure, payment capabilities, compliance framework, and user experience, often proves to be a costly and time-consuming strategy. As a result, the most successful newcomers tend to focus their resources on delivering a compelling customer proposition while relying on trusted technology partners to provide the underlying foundation needed to scale efficiently.
‘The question is no longer 'whether it's possible to enter the market,' but rather 'with what infrastructure and strategy to do so.' Players who correctly understand where to compete and where to rely on partners still have a real opportunity to grow – even in a market where the bar keeps rising,’ summarises Simas Simanauskas, Chief Commercial Officer at ConnectPay.
Baltic Amadeus and ConnectPay collaboration
To help clients overcome these challenges even faster, we have teamed up with ConnectPay, one of the EU's fastest-growing Electronic Money Institutions. Baltic Amadeus supplies its white-label FinCell and software-engineering expertise, while ConnectPay provides the fully licensed payment rails, AML/KYC engine and Banking-as-a-Service stack.
Together they deliver a turnkey solution that lets banks, credit unions and fintech start-ups roll out compliant, feature-rich mobile banking in a fraction of the usual time and cost.
Whether you're building a banking app from scratch or modernising an existing one, working with an experienced mobile app development company like Baltic Amadeus can help control costs while meeting PSD2, DORA and AML/KYC requirements from day one. Get in touch to scope your project.
