Neobank Transformation: Enhancing Compliance and Security

The client is a leading specialist digital challenger bank based in the UK. They offer faster, smarter, simpler banking services for entrepreneurs, independent businesses, and consumers that power the UK economy. For nearly two decades, they have been providing easier ways for millions of customers to pay, bank, and borrow funds through the user-friendly digital platform. The client had a mobile app that was designed for small business owners. They needed to implement and support Open Banking, an API-driven platform that links financial services through Open Banking and is mandatory for financial institutions.

The client, a leading specialist digital challenger bank based in the UK, was faced with the challenge of redesigning and rebuilding their mobile banking application. The goal was to provide a more convenient way for their customers, primarily small businesses, entrepreneurs, and consumers, to interact with their platform. Additionally, they needed to implement Open Banking, a mandatory requirement from the UK financial institution. Prior to this, the client had outsourced the development of its mobile app to other vendors. However, they needed a strong team that would take over the development completely and implement new features to improve the functionality for both the client and its customers.

N-iX, an engineering team, extended the client’s testing and backend development capabilities. They built the solution almost from scratch, completed Open Banking implementation, and introduced other features. The team was responsible for implementing Open Banking, introducing a set of regulations that aim at more innovative and highly secure online and mobile payments as well as better consumer protection. They developed Android and iOS native apps, with a focus on security measures such as 24-hour fraud monitoring, secure face and biometric ID, ability to block cards from the app or online, and instant app notifications when money leaves the account. The team also implemented Strong Customer Authentication (SCA) and introduced push notifications. They used the Identity Guard for two-factor authentication and implemented 3DS 2.0, a fraud detection tool.

• Working closely with the client, N-iX improved the backend, fully developed and supported native Android and iOS apps with over 50K daily active users. They developed an automation testing framework from scratch to accelerate time-to-market. Successful implementation of Open Banking allowed the client to become a fully-fledged digital bank. They added many new features, for instance, cashback and deposits. Also, they added various analytics that enable users to quickly comprehend data and draw actionable insights that would otherwise go unnoticed. The N-iX team drove the technology implementations to comply with the revised Payment Services Directive (PSD2) for EU countries.

• 70-80% of daily active users — over 50K — are mobile app users

• In a recent study on risk-based authentication, with 3DS2, 95% of transactions will be low risk, requiring no additional customer verification

• Typically, less than 5% of transactions will require additional customer verification