5 techniques fintech and banking apps use to engage and retain users
- Getting and keeping users is a big challenge in financial services and fintech.
- Here are some tried and true ways leading firms are acquiring and engaging users.
It has been several years since mobile payment service Venmo shocked many with its newsfeed displaying exactly where and when users spent their money. While this overtly social experience is still unique to Venmo, other apps are constantly trying new techniques to get users to spend more time on their apps.
While finance apps are in general used more frequently than many other categories of apps, coming in third behind social media and weather, companies still struggle with long-term retention and getting users to spend even more time on the apps, according to a study by Leanplum and Liftoff.
“Overall, finance retention starts strong and then it falls off,” said Marjaneh Ravai, global communications leader at Leanplum. The recent study by Leanplum and Liftoff showed that one day after signing up for financial apps, 34.8 percent of users remain. A week later this drops to 14.9 percent, and three months later to just 3.4 percent. This is slightly lower than the nearly 5 percent 90-day retention rate for apps in general. Due to increasing competition in the sector, the costs to attract and maintain users are also growing, the study said.
“These data points indicate that finance app makers and marketers, both digital-first and legacy institutions, have to keep their eyes on the ball,” Ravai said. Today, most retention techniques rely heavily on personalizing services and information. But because such personalized services rely on data and information about the user, getting more information from users has become key; and this is often the goal behind the game-like and social features emerging on many apps.
Here are five ways they are doing that:
- Newsfeeds: While Venmo still stands out for the public nature of its feed, displaying where and with whom your friends spent money, many other apps have embraced the idea of the feed, while still keeping personal information private. For example, Credit Karma, which gives users free credit scores and reports, recently launched “Stories”, a newsfeed-like feature aimed at getting users to make sure they are taking full advantage of the app and what it can do for their financial lives. For example, a piece of advice, such as “It’s a good time to shop for new and cheaper car insurance,” may pop up, based on the AI-powered app upon figuring out behind the scenes that your credit score has improved, which often leads to lower-prices for products like car insurance. Or, in order to get people to give the app’s algorithms more information, a question like “Have you paid off your credit card balance this month?” may come up. You can then answer yes or no by tapping one button. “It makes things very bite size,” said Christina Lucy, associate director of product at Credit Karma. “Finances can be very overwhelming, but this distills the information and makes sure people are engaging with the app, which enables us to produce more accurate personal advice and results.”
- Cards: A growing number of apps also offer debit cards, transforming what may have started out as a budgeting or investing tool, or platform to pay friends into a full-fledged pseudo bank account. Stash, which started out as a micro-investing platform, now offers a debit card, which the company says has “absolutely” increased engagement with the app. Now, “banking services are at the core of our platform,” said Dale Sperling, CMO of Stash. A growing number of apps also use merchant-specific discounts and cash-back rewards -- which are frequently time-sensitive and unveiled via the app--to entice users to keep coming back.
- Making finances fun: The new Status Money app is a platform where you can compare your spending to those of similar backgrounds with similar incomes -- all anonymously. It presents budgeting like a competition, giving virtual badges when users receive likes and comments on their posts, and when they follow the app’s advice to cut back on their spending or save more each month. “Money is an inherently competitive subject – that’s why most of us find it difficult to talk about our finances with friends and colleagues,” said Majd Maksad, co-founder and CEO of Status Money. “Despite the bold name of our app, our goal isn’t to encourage competition. In fact, we enable people to cooperate and help each other make smarter financial choices. That’s why we keep the peer comparisons anonymous and ask members to create nicknames when they chat with each other.” The app Long Game actually uses gaming as motivation for saving and investing. Virtual coins are rewarded for each increment a user stashes away, and these coins can then be used to play simple online games that give cash and cryptocurrency prizes.
- Content: Investing platform Robinhood is now seeking to be a full-fledged news and financial information service for its users, launching free in-app content from sources like The Wall Street Journal and Reuters. Not only can users simply open the app and see financial news from trusted services, but they can receive instant notifications about breaking news involving companies and stocks in their investment portfolios. Perhaps this means Robinhood users will spend less time on other apps specializing in news and information, like the decades-old Yahoo Finance. “Our research has shown that our customers are looking for more information about what’s going on in the financial world, so we developed our product to better meet their needs,” Robinhood’s vice president of product, Josh Elman, told the company’s blog.
- Partnering: Venmo recently announced partnerships with the customer reward programs at Chipotle and PepsiCo, where those companies use Venmo to pay out rewards that can be redeemed at their brands. Put simply, this is a way to “provide customers with more ways to use their Venmo account,” a spokesperson for Venmo said.