Digitalization and COVID-19 have altered the financial landscape significantly making fintech solutions an absolute must for financial services. Fintech was initially considered as the technology that was applied to the back-end systems of financial institutions.
Fast forward to 2022, it lets you manage everything on your smartphone from helping you pay for your food to managing insurance and trade stocks. It allows you to lead your financial lives successfully without feeling the need to visit brick-and-mortar establishments.
The appetite for Fintech apps has grown to such an extent that they are now an integral aspect of financial management. User experience has been a key factor driving this growth. The use of online and mobile banking has increased worldwide with Asia leading the way.
Thai e-wallet TrueMoney grew tremendously during the pandemic and has been one of the most downloaded free Android apps in the country. Along with Japan’s LINE Pay, it is predicted to grow by over 200 percent between 2020 and 2025.
On the other hand, India is outpacing the world with digital payments rising from $61bn in FY16 to their current value of $300 bn. The Unified Payments Interface (UPI) has witnessed a surge of 103 percent in transaction values in 2021 as compared to the previous year.
While those like Paytm expand the scope of their offerings with prepaid mobile recharge services, gold trading, and bill payments, the battle for market share continues to get fiercer with contenders like Google Pay, PhonePe, and WhatsApp.
Mobile apps are now the preferred touchpoint
Fintech mobile apps are seeing an increase in installations, session times, and retention rates with the rise in innovation and offerings. Some of the top fintech apps to consider include MoneyLion, Robinhood, Chime, Nubank, Mint, Revoult, Coinbase, N26, Finch, and Tellus.
Modern apps are now facilitating diverse functions and use cases such as lending, blockchain/crypto, insurance, regtech, payments, investments, trading, money transfer, wealth management, and mortgage. Fintech apps can benefit your business in a big way.
Some of the top benefits include:
- Greater reach – You can reach a wider audience and keep them updated with the latest information.
- Improved functionality – You can add features to improve your business and empower customers.
- Unparalleled convenience – Customers can use apps on the go and are more likely to explore new services.
- Enhanced operational efficiency – You can streamline operations by integrating software to offer lower prices and greater value to customers. This can make your business more efficient and increase revenue along the way.
Korea’s super app Kakao has given its users a robust mobile-only bank platform combining marketplaces and banking functionality. In just 24 hours of opening, it had managed to garner 300,000 subscribers thanks to its user-friendly and effective marketing strategies.
Key things to remember to turn your app endeavor into a success story
While building the perfect FinTech app, it is important to remember a few things that would ultimately determine the success of your app.
- Security is paramount
While every financial transaction is based on trust and reliability, the app is expected to be secure at all times. It needs to adhere to legal regulations and compliance practices. Consumer data needs to be protected and customers should be offered complete peace of mind.
Fintech is vulnerable to cyberattacks since it involves sensitive financial data. It is, therefore, crucial to add the required security layers and test the app thoroughly to ensure that the coding is foolproof.
Precisely why PayTouch leverages biometrics as a security measure allowing payments with fingerprint detection. Customers do not require cards or PINs, and can easily track all their transactions online.
Blockchain-based systems are now becoming popular due to their ability to deter attacks and make apps unbreachable. According to a PwC report, more than 50% of technology leaders believe artificial intelligence will drive change while 40% of organizations are looking up to blockchain to transform the way financial services are delivered. We believe both these technologies play a crucial role in keeping threats at bay.
- Everybody wants a Super App
Every consumer expects ‘One app to do it all’. One app, one sign-in are fast becoming the norm. Modern users want to do multiple things including buying gold, booking tickets, and managing investments. Precisely why Bank of America is all set to launch an all-in-one app to attract new customers, bolster its digital ecosystem, and improve customer service.
Considering that 1 in 5 adults in the United States invested in stocks or mutual funds between October and December 2021, the easy-to-use app is expected to reduce the pain points for customers ensuring a seamless digital experience.
An all-in-one experience can undoubtedly be enticing but super apps have thrived only in a few markets. A super app is touted as the Holy Grail of the digital economy, and those like PayTM and Flipkart are making a beeline to claim a bigger market share with a diversified portfolio. And yet they lack the dazzle to impress consumers.
Consumers prefer choice over brand loyalty and are willing to explore and compare before buying anything. Besides, companies are trying to build use cases beyond their primary domain of expertise instead of collaborating with others. Precisely why PayTM couldn’t carve its niche in eCommerce and Ola Cabs ended up dropping Foodpanda soon after acquiring it.
Not to forget UberEats which burned a whopping $3 billion only to give away its food delivery business to Zomato later. Rather than capitalizing on individual strengths, these companies are fragmenting the market.
Companies will have to work towards fostering partnerships and ecosystems. They will have to invest time in opportunity mapping and conduct an exhaustive study of the competitive landscape. The focus should be on developing the customer value proposition to ensure high user stickiness. A robust data analytics engine can help provide the necessary insights to get started.
- A frictionless customer experience should be the ultimate goal
A simple and easily navigable UX (user experience) / UI (user interface) is what is needed to ensure convenience and a frictionless customer experience. Intuitive, UX-driven payments are the need of the hour and streamlined navigation is the hook on which they rest.
Thailand’s Piggipo allows users to have their own financial advisor to help with budgeting and handling myriad other things. It allows subscribers to manage multiple cards via a single interface, track their spending, and schedule payments. It also allows them to set spending limits and check their credit card statement in real-time.
System performance is critical to delivering the perfect customer experience. Time is of the essence when it comes to use cases like payments processing. App developers must optimize system performance keeping the end-to-end impact in mind. They need to adopt agile methodologies like Scrum and Kanban to ensure rapid iterations, minimize risks, and enhance business value.
- Everything has to be customer-centric
Gojek understands this well and offers more than 20 services in diverse areas including transport, food delivery, and logistics. HUMANS.uz, on the other hand, offers a fintech service, mobile phone cellular services, and an online payment system along with a cashback for top-ups, savings, transfers, purchases, and bill payments.
Data analytics makes it easier to understand your consumers. Data insights can improve operational processes and transactional data can be used to offer better customer experiences.
For instance, you can use the data to risk-assess loan applications and offer them loans just when they need them. While traditional banks are still struggling to make sense of siloed data and get a good view of their customers, you can step up and serve your consumers with meaningful solutions.
Although every endeavor should keep the ‘customer’ at its core, other factors like time-to-market, scalability, and maintenance should not be overlooked.
- You must provide a solution to a market problem
According to the State of Finance App Marketing report, Asia & Pacific region has over 1230 fintech apps. In 2020, marketers had spent US$ 244 million to get new users taking the number of paid installations to 600 million. It’s easy to get lost in the crowd unless you pick a specific problem and address it effectively. Only then would you be able to have a competitive advantage and a greater market share.
That’s exactly what Square Inc. did. McKelvey (one of the founders of Square Inc.) was unable to process a sales transaction worth $2000 in 2009 since he didn’t accept credit card payments. The transaction costs made credit card processing extremely expensive for small businesses back then.
He teamed up with Jack Dorsey to create a hardware prototype that would solve this problem for smaller retailers and individuals. It was a square card reader that was sent to users for free to connect through the audio jack of mobile devices and facilitate payments. Square charged a nominal fee of 2.6% along with an additional transaction fee of 10 cents and the company was soon making humongous profits.
Interestingly, Square Inc. became a fintech success story even before fintech was born. The company attributes its success to the low transaction fees and the $0 fixed cost for card purchase. But none of this would have happened had the founders failed to see the advantage and the opportunity in payment processing.
The right technology partner could be your first step to fintech app success
It takes an experienced partner to understand the intricacies of fintech. The best-laid plans and the biggest ventures can fail too if they lack proper research and strategy.
A classic case in point is the fall of N26 that had announced its US operations amidst great fanfare in 2019.
With America’s oldest and most celebrated bank Axos as its banking partner, the Berlin-based fintech promised an unparalleled digital banking experience to its customers. Yet, it recently announced its decision to close its US operations.
So, what went wrong?
Despite claiming to be for everyone, it was for no one since it lacked a definite market niche. There was no feature differentiation and challenger banks were already offering what they could. In a strong regulatory environment, it is important to define your customer and differentiate the customer experience.
In contrast, Chime and Varo were very clear about who they were catering to – low to middle-income consumers – irrespective of whether they spent their whole time on their smartphones or not.