By Mike Rhodes, CEO and Founder of ConsultMyApp
The Covid-19 pandemic has caused unprecedented disruption for many businesses, however, the fintech market has remained steadfast in its growth. In fact, 2021 has become the golden age for fintech IPOs. For example, RobinHood Markets Inc debuted with one of the largest recorded listings for a fintech company – valued at $32 billion on July 29th 2021.
With the global fintech market predicted to reach a value of £380 billion by 2030, this boom is showing no signs of slowing.
Whilst the fintech market has become one of the fastest-growing sectors of our economy, established banking institutions now find themselves in hot water. If they are to truly rival new market players like Revolut or Tide, they must innovate their digital offering. Yet, despite their efforts, traditional banks are failing at the in-app experience and still struggling to create true differentiation in an increasingly saturated market. Instead, fintech companies continue to outperform them, providing a ‘one-stop-shop’ for customers’ financial needs.
So, how have fintechs rapidly gained market authority in a typically ‘closed shop’ sector?
The Digital Transition
The past 18-months have triggered a rapid acceleration of the shift online. For example, digital banking has seen a significant increase in uptake, with 73% of British consumers now embracing e-banking offerings.
As lockdown and social distancing restrictions hindered in-person sales and services, customers increasingly turned to fintech’s as a more convenient and efficient way to manage their finances. This digital transition is now set to continue to transform the financial services sector as the world re-evaluates traditional forms of banking and the personal finance revolution continues to gain traction.
Customer Acquisition Strategies
Amid this backdrop, fintech companies have remained at the forefront of consumers’ minds and developed a strong and sustained customer base.
Whilst traditional banks remain focused on marketing campaigns that drive individual downloads, fintechs have set themselves apart with effective user acquisition strategies, centred around a simple onboarding processes. Industry leaders have acknowledged that a more streamlined sign up process makes it easier to acquire new users through paid channels.
As a result, fintechs continue to achieve high levels of uptake by appealing to new users with their account activation and login mechanics which require only the most relevant information. In contrast, traditional banks have failed to acknowledge that onboarding and overloading do not need to go hand in hand. Simplicity is key here and until established banks accept this narrative, new market players will continue to outperform them in the digital space.
Effective App Store Optimization
Another contributor to the success of fintechs lies in their App Store Optimization strategy (ASO) which remains at the forefront of the agenda. In fact, for Tide (https://www.tide.co/), the UK’s leading business financial platform, ASO and Apple Search Ad (ASA) strategies proved to be crucial in driving new business account signups.
ConsultMyApp worked strategically with Tide to improve all elements of ASO, whilst ensuring it was fully synchronized with their Apple Search Ad campaigns. This resulted in Tide’s organic install volumes rising by 140 per cent over just three months, demonstrating how valuable these tactics can be.
By concentrating on ASO, fintech companies improve traffic from organic searches and increase overall conversation rates to boost the efficacy of their paid channels. In a saturated market, ASO is quite simply a must to ensure a company can compete against the competition and sustain market momentum.
Customer Retention Strategies
Fintechs have also acknowledged the value in establishing a comprehensive user retention strategy. These apps prioritise the user experience to remain competitive and retain customers. They ensure that from the very first moment an individual logs into the app, their experience is slick and convenient – and this includes communication pathways. These new market players are extremely self-aware when it comes to their communication strategy – knowing how much communication is too much.
Findings suggest that push notifications can in fact double the 30, 60 and 90-day retention of customers, but they should be handled with caution. If executed poorly, push notifications can become intrusive and force users to abandon the app altogether. Yet, fintechs seem to be getting the balance right – targeting the right people at the right time and with the right information.
Fintech companies are currently leaps and bounds ahead of established banking institutions when it comes to producing personalised content. By utilising in-app and external data, fintechs have been able to adapt and innovate the user experience according to specific preferences and interests. By pairing app and message personalisation with dynamic content, fintechs are able to connect with users propelling them into a different league when it comes to customer engagement.
Looking Ahead
The fintech market has accelerated from strength to strength over the past 18 months and, with investment into the market on an upward trajectory, this sector is only set to shatter more records.
Ultimately, traditional institutions cannot afford to ignore the new wave of digital banking that has rapidly gained market authority. Instead, they must embrace the value of investing in ASO and the key marketing strategies needed to build awareness, improve the customer experience and develop a competitive edge, if they are to compete with leading fintechs’ offerings.
