Building a Neobank from Scratch

The rise of neobanks has fundamentally reshaped how people interact with financial services. Customers now expect seamless digital onboarding, instant payments, transparent fees, and sleek mobile-first experiences. But building a neobank from scratch isn’t just about designing an app with a modern UI. At the heart of every successful digital bank is a robust core banking engine and an API-first platform that powers everything from account creation to real-time compliance checks. 

In this article, we’ll walk through the essential layers that define a neobank’s technology stack and the challenges fintech builders must solve to deliver scalable, compliant, and customer-centric platforms. 

Core Banking Foundations 

For a neobank, the core banking system is the brain of the operation. It handles deposits, withdrawals, transfers, lending, and interest calculations. Unlike traditional banks, which often rely on legacy mainframes, neobanks typically adopt cloud-native, modular cores. 

Key traits of a modern neobank core include: 

Real-time processing: Customers expect transactions to reflect instantly. Batch processing is no longer an option. 

Configurability: Product managers must be able to roll out new account types, fees, or interest models without weeks of vendor changes. 

Regulatory alignment: Cores must support AML (Anti-Money Laundering), KYC (Know Your Customer), and transaction monitoring requirements natively. 

API-First Platforms 

If the core is the brain, APIs are the nervous system. An API-first approach ensures that every product feature—from opening an account to connecting to a payment rail—can be accessed and extended via well-documented interfaces. 

API-first design brings three critical advantages: 

Speed of Innovation – Neobanks can integrate third-party services like fraud detection, credit scoring, or FX rates quickly without rewriting their backend. 

Scalability – API gateways and rate limiting make it possible to serve millions of requests per second while maintaining security and reliability. 

Developer Ecosystem – Public APIs let fintechs foster ecosystems of partners and developers who can build value-added services on top of the bank’s infrastructure. 

With regulatory frameworks like PSD2 in the EU and Open Banking in the UK, API-first isn’t just best practice—it’s mandatory. 

Building the Modular Layers 

A neobank’s platform is essentially a stack of modular service layers: 

Account & Ledger Services. Manage balances, reconciliations, and transactions. 

Identity & KYC. Integrate onboarding flows with eKYC vendors for seamless customer acquisition. 

Payments & Cards. Enable real-time payments, card issuing, and network connections. 

Compliance & Risk. Provide automated AML checks, fraud detection, and reporting. 

Analytics & Personalization. Deliver customer insights and smart financial recommendations. 

Each of these layers communicates via APIs and is often built as microservices for flexibility and resilience. 

Scaling Challenges 

Launching a neobank is not without its hurdles: 

Regulatory Approval: Obtaining a banking license or partnering with licensed banks requires significant compliance investment. 

Security: APIs expand the attack surface. Implementing OAuth2.0, encrypted service mesh, and zero-trust principles is non-negotiable. 

Performance: Payment spikes (e.g., salary days) demand robust scaling strategies like auto-scaling clusters, failover routing, and circuit breakers. 

Customer Trust: Uptime, transparency, and support are as crucial as flashy features. 

Developer Perspective 

From a developer’s lens, building a neobank feels like assembling Lego blocks with enterprise-grade constraints. The architecture must be modular yet auditable, fast but compliant, innovative while stable. CI/CD pipelines must integrate compliance checks, and QA must verify not just functionality but also regulatory auditability. 

Here’s a simplified example of how an account creation API might look in a neobank’s platform: 

 1 // Example: Account creation endpoint 
 2 POST /api/v1/accounts 
 3  
 4 Request body: 
 5 { 
 6   "customerId": "12345", 
 7   "accountType": "savings", 
 8   "currency": "EUR" 
 9 } 
10  
11 Response: 
12 { 
13   "accountId": "98765", 
14   "status": "ACTIVE", 
15   "createdAt": "2025-09-03T10:15:00Z" 
16 } 
17  

This endpoint would trigger multiple workflows in the background: verifying identity, creating ledger entries, and setting up monitoring hooks—all abstracted behind a clean API. 

Orchestration at its Finest

Building a neobank from scratch requires more than just code. It’s a careful orchestration of compliant core systems, API-first architectures, modular integrations, and relentless focus on user trust. For fintech architects and developers, the challenge is to design stacks that are not only functional today but adaptable for the next decade of financial innovation. 

At OceanoBe, we’ve partnered with fintech teams and scale-ups to design and implement precisely these kinds of platforms—modular, API-first, and regulatory-ready. The future of banking is composable, and it starts with the right foundations.