Mike Rhodes, CEO and Founder of ConsultMyApp, discusses how the fintech market has become one of the fastest-growing sectors of our economy and how these relatively new market players continue to outperform traditional banks in the digital space
Despite the trials and tribulations facing many businesses during the COVID-19 pandemic, the fintech market has remained resilient throughout. In fact, 2021 has become a signature year for fintech IPOs. For example, RobinHood Markets Inc debuted with one of the largest recorded listings for a fintech company – valued at an impressive US$32bN on July 29th 2021.
With a further 15 fintechs predicted to IPO this year, and the global fintech market forecasted to reach a value of £380bn by 2030, it looks as though this sector is only set to shatter more records.
Whilst the fintech market has become one of the fastest-growing sectors of our economy, traditional banks now find themselves in hot water. If they are to truly rival the likes of Revolut or Monzo, they must innovate their digital offering. Yet, despite their efforts, established institutions are still struggling to create true differentiation and are failing at the in-app experience. Instead, they find themselves undermined by fintech companies that 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 shift online
The digital transition was already gaining pace before the Covid-19 pandemic, however, the past 18-months have triggered a rapid acceleration of this shift. For example, digital banking has seen a significant increase in uptake, with 73% of British consumers now using e-banking methods.
As lockdown and social distancing restrictions hindered in-person sales and services, customers increasingly turned to fintech’s as a more convenient way to manage their finances. This shift online 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 gains momentum.
Effective customer acquisition strategies
Amid this backdrop, fintechs have successfully remained at the forefront of consumers’ minds and developed a strong and sustained customer base.
Whilst traditional banks invest in marketing campaigns to drive individual downloads, fintechs have set themselves apart with effective user acquisition strategies, centred around easy 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 simple 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. In this instance, simplicity is key and until established banks accept this narrative, new market players will continue to outperform them in the digital space.
App Store Optimization
Another indicator for the success of fintech companies lies in their App Store Optimization strategy (ASO) which remains at the forefront of the agenda. In fact, for Tide, the UK’s leading business financial platform, ASO and Apple Search Ad (ASA) strategies proved to be instrumental in driving new business account signups.
ConsultMyApp worked strategically with Tide to improve all elements of ASO, from creative to technical, whilst ensuring it was fully synchronized with their Apple Search Ad campaigns. This resulted in Tide’s organic install volumes increasing by 140 per cent over a mere three month period, proving just how valuable these tactics can be.
Ultimately, by looking to ASO, fintechs improve traffic from organic searches and increase overall conversation rates to improve the efficacy of their paid channels. In a saturated market, ASO is quite simply a must to ensure a company can compete against, and emerge above, the competition.
Customer Retention strategies
Fintechs have also recognised the value in developing a strong and 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 show that push notifications can in fact double the 30, 60 and 90-day retention of apps, but they should be handled with care. If executed poorly, push notifications can become intrusive and trigger 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.
Fintechs are currently unrivalled when it comes to producing personalised content that sets them apart from the crowd. By utilising in-app and external data from customers, fintechs have been able to adapt and refresh the user experience according to their preference and interests. By pairing app and message personalisation with dynamic content, fintechs have learnt to connect with users propelling them ahead of established banking institutions when it comes to customer engagement.
- Revolut becomes Britain’s most valuable fintech firm
- Klarna becomes the first fintech to join The Climate Pledge and Race to Zero campaign
- Visa will acquire open banking fintech Tink
- Why the West Midlands is the new face of fintech innovation in the UK
The fintech market has grown from strength to strength over the past 18 months and, with investment into the market on an upward trajectory, this boom is showing no signs of slowing. In fact, just this week JP Morgan announced the launch of a British digital bank that will be solely app-based.
Ultimately, if traditional institutions are to compete, they cannot afford to ignore the new wave of digital banking that has emerged from the pandemic. Instead, they must embrace the value in investing in ASO and the key marketing strategies needed to build awareness, improve the customer experience and develop a competitive edge over fintechs’ offerings.