5 Challenges Fintech Apps face and how to conquer them
Fintech apps are revolutionizing the way people save, share and borrow money. It’s no surprise that many of us are now managing our money through a mobile app rather than a bank branch.
According to Forbes, fintech attracted $100 billion in investments. There are many benefits to using mobile apps for financial management and planning, but fintech development is not a walk in the park. These apps face challenges that aren’t seen in other industries.
This article looks at the most common challenges these apps face and what they can do to ensure they’re providing the best possible experience to their users.
#1 Transparency and Security
For any application or platform, trust is the key to success. For users to trust the financial service providers, they need to know that the information they are receiving is accurate, timely, and relevant. Lack of transparency in the information provided by banks only breeds mistrust and reluctance for customers to stay with them.
Security goes beyond just making sure the transactions are secure, there is much more to it. It is one of the most important aspects of any fintech app. You are dealing with a lot of personal data like passwords and transactional data. It is your responsibility to keep it safe and private. Data breaches or gaps can easily undermine your app’s trust and ruin your brand.
The app should ensure that user information is protected from being accessed by unauthorized people or sources. It must also make sure that users access only the authorized data.
Provide instant alerts about any suspicious activity on the account to both the user and authorities for immediate and appropriate action.
Include strong authentication measures like multi-factor authentication and maintaining high-level transparency about who owns the business and where its data centers are located.
#2 Leveraging Artificial Intelligence
Artificial intelligence (AI) has been disrupting every industry by utilizing deep learning and machine learning capabilities. In fintech, AI facilitates activities such as automated wealth management, opening bank accounts, and customer identity verification, to name a few.
For financial players, AI has the potential to increase efficiencies significantly. But it may not pay off for those unaware of its varying use cases across financial services.
Ensure that the analytical insights you develop are relevant to the overarching business strategy.
Describe how the data collected will be used in decision-making. When working with limited data, focus on a few variables to start training your machine learning model.
Fintech apps are often highly complex, with so many factors in play. This can make it difficult for users to figure out how to navigate and use the app, leading them to give up completely. The services they offer should be easy-to-use so that customers do not have to struggle while making transactions or performing other tasks.
Keep it simple. Start with frictionless onboarding. Give a step-by-step guide with tooltips or short tutorials to help them understand the app better and reduce the complexity — leverage gamification to ease the usage.
Using gamification elements like trivia, opinion polls, mini-games, etc., in your banking application, you can make your fintech app more engaging and fun for the users and get them hooked to your products.
Trivia — Trivia helps users engage in a fun and entertaining way. Interactive quizzes boost engagement and deliver personalized experiences in real-time.
Mini-games — You can leverage games like spin the wheel card shuffle to engage users, educate them about your product, and understand their needs. These provide a fun experience and improve daily active users.
Opinion polls — Polls allow you to find out what your users think and how they feel — asking your audience for their opinion signals that you care what they have to say.
#4 User experience
The lack of a good user experience is the biggest challenge for fintech apps. Many financial institutions already offer mobile apps with basic functionalities such as transfers and payments. These apps are often not very user-friendly or are extremely unappealing and boring.
This leaves room for fintech apps to improve user experience by providing intuitive designs that make navigating the app effortless. An app that offers a poor user experience will find it difficult to retain users, let alone attract new ones.
Innovation is essential, but don’t lose sight of what your customers need. Understanding your customers through analytics is an excellent way to improve your app and give them what they need. This will help you form strategies that match customer expectations and needs.
Some aspects of a good UX design:
- Clear navigation
- Visual cues that lead users to desired actions
- Information architecture that is logical and easy to comprehend
- Smooth flow from one activity to another
#5 Customer Retention
Customer retention is a fundamental part of any business’s success, but it’s rather challenging in the fintech industry. As fintech deals with money, people tend to be more risk-averse when it comes to their finances than with other apps, so gaining their trust is paramount.
Knowledge is core to gaining users’ trust. Marketing efforts must educate potential users about the advantages of new financial technology. For example, providing educational resources such as white papers and case studies help users become more familiar with your company and its products and services.
Also, 70% of companies know it’s cheaper to retain existing customers than acquire new ones. Yet, 44% still prioritize customer acquisition.
So keep in mind to treat the existing users and new users equally, say the right thing at the right time that is relevant, and lastly, use the right tools to engage the users.
Fintech Apps have a great potential to make our lives better, easier, and money-savvy. But many challenges stand in their way from becoming an incredible force in modern-day life. By overcoming these challenges, the apps can grow tremendously.