During the Covid-19 pandemic, the number of fintech transactions went through the roof thanks to digital payment solutions like e-wallets and credit card management apps. Today, tech-savvy smartphone users, especially millennials, have become dependent on mobile payment apps for all their bill payments and merchant payments.
However, fintech app users have become dissatisfied with digital financial products and services. According to a study, fintech apps retain only 16% of their users annually compared to higher retention rates for banking apps (57%) and insurance apps (32%). It means 84% of the users are likely to uninstall the fintech app by the end of the year. Let’s understand why fintech app abandonment rates are high and how fintech providers can eliminate them.
The Case of the Fintech Paradox
The fintech paradox is when the upward trend in the fintech industry is met with many users quitting applications without completing the intended tasks. Fintech providers gained trust as it became imminent to go from lengthy brick-and-mortar processes to handy and simple digital procedures. However, the lack of human touch and information, coupled with the complicated onboarding process, has made customers unwilling to spend time on fintech apps.
Other Reasons Driving Away Fintech App Users
- The growing number of cybersecurity attacks makes customers hyper-vigilant and reluctant about the amount of information requested by payment solutions and other fintech apps.
- Many customers leaving fintech apps during the onboarding process state complicated UI design, poor user experience, and overtly strict procedures to be the reason.
- For some apps, app connectivity and sync are only tested with high-speed Wi-Fi connections. However, not all app users will get high-speed connectivity everywhere, and the app won’t function properly under a flaky internet connection. An application stuck on bill payments or merchant payments gateway will lead to app abandonment.
- Besides, limited payment options, extensive onboarding processes, customer distrust of products, and hidden charges contribute to increased drop-off rates.
How can Fintech Providers Reduce App Abandonment Rates?
Know your Target Customer Segments
Customers expect their smartphone applications to meet their needs with personalized offerings. Thus, the first step toward retaining app users should be to know the target audience inside and out. Fintech providers can use client profiling, research data, and behavioral analysis to segment users.
It allows providers to focus on customers likely to convert rather than wasting resources on users who aren’t ready to transact. In addition, as customer demands grow, fintech providers can offer personalized products to move the prospect down the funnel more effectively.
Make AML & KYC User-friendly
AML (Anti Money Laundering) and KYC (Know Your Customer) are mandatory compliance procedures required by law to mitigate risks of financial crimes. Unfortunately, many traditional finance brands still use outdated means to verify customer data instead of leveraging the latest technology to ensure minimal hassle for app users.
Fintech providers must deploy the right technology to do this verification and ensure that this process is presented to customers as user-friendly as possible. For example, providers can integrate AI-based systems to automate verification workflow to reduce required documents and human error.
Create a Perfect Onboarding User Experience
Here are some top practices to make the onboarding process simple and intuitive:
- Lessen down the number of fields required to complete the sign-up process. Give multiple registration options, e.g., sign in with Google.
- Get to the eureka-effect (Aha! moment) as soon as possible by educating users about app offers and benefits.
- Send gentle reminders with attractive push notifications urging users to register if they have not already.
- Reach new users through various digital touchpoints, encouraging them to act by highlighting key features and showing how to add money to their wallets.
Spur App Engagement with Gamification
Implementing gaming elements and experiences in non-gaming apps is a trendsetting strategy for driving engagement. For example, fintech app developers can add badges, progress bars, point systems, leaderboards, and challenges to gamify separate grunt tasks and keep users motivated to work towards a clear goal.
Developers can implement the ‘hook model’ that involves an endless cycle of trigger, action, rewards, and continuous investment. Incentivizing the desired behavior is a subtle and clever way to gamify fintech apps. For example, users can earn points by completing challenges and redeeming them for movie tickets.
Personalized Notifications
Fintech providers can utilize customer data to issue personalized push notifications and in-app notifications. In addition, customer data can help fintech apps to target the right user at the right time by recommending the right service or offering.
For example, a fintech app reminds users to save money when their spending habits are not aligned with their budget. App developers can combine these reminders with in-app notifications to ensure users apply coupons while making merchant and bill payments.
Smartly Crack User Retention with Versatile Fintech Solutions
After the wave of digital payment solutions, the next wave of disruption is fueled by innovative fintech apps that go beyond wallets and investments. Although the future of finance is digital, just the digitalization of financial services will no longer be sufficient to retain fintech app users. Instead, fintech providers must put their users first to create an engaging app that benefits them at every stage of the customer lifecycle.
Panamax’s versatile digital banking platform delivers various fintech solutions to help you roll out fintech apps encompassing unique state-of-the-art features.
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