Be it the influence of the significantly dropping investment markets or an event of the American companies leveraging the underlying fintech business potential, the year 2020 presented a staggering growth for the fintech space. This has led to attracting investors’ attention through different fintech sectors.

To be specific, the US fintech industry opened its doors for over 8,775 fintech startups in 2021, spiking the global fintech adoption rate to 64%. In addition to that, the US fintech industry received investments nearing $50 billion.

According to the Business Research Company, the global financial services market is projected to reach $158,01 billion by 2023.

As per Statista, globally, the number of financial services for startups reached more than 6.5 thousand. The fintech software development companies have also observed the highest number of start-ups funded worldwide with under three thousand.

These investments have certainly induced a spate of interesting events occurring inside the global fintech space, and for all the good reasons, the fintech business models are evolving more rapidly than ever. In this article, we are discussing them in detail.

Introduction: What is Fintech?

As it suggests, “fintech” is a combination of two words, i.e., “financial” and “technology.”

The idea of fintech is to combine a finance-related concept with technology to educate and/or enable users to access various financial opportunities that can add value to their lives.

Myriads of fintech business plans allow their users to carry out monetary transactions across bank accounts quickly. Some of the fintech startup ideas aim at delivering investment oriented financial services to their users’ smartphones. And then there are banking business models enabling users to efficiently manage their finances on-the-go and make use of APIs.

Some use cases comprise:

• Digital banking
• Alternative credit scoring
• Unbundling
• Demographic-focused products
• Different fee structures
• Insurtech

In one way or another, most of the present-day financial service business ideas are helping users. However, someone who intends to enter the fintech industry as a player, may prefer to gather more in-depth information about the space; and that you can find in the following sections.

Types of Fintech Business Models

As the financial needs of the American population are evolving, the need for coming up with innovative financial service business models is on the rise. As investors and entrepreneurs strive to synthesize revolutionary ideas, the following list of leading fintech business models may advise some direction.

1. Alternative Credit Score System

Anyone whose loan application has been declined knows the significance of maintaining a healthy credit score.

However, the process that it requires isn’t often the easiest for everyone. Whether it’s a late EMI payment or a short credit line, a wide range of factors can negatively impact your credit score.

Which is why, an alternative credit scoring system can make one of the great financial services for startups and individuals.

Many fintech companies are already analyzing social signals and percentile scoring methods to rate their potential borrowers and decide suitable credit limits for them.

2. Smarter Insurance Plan Designs

In 2019, the overall valuation of the health insurances owned by 179 million Americans (55% of the US population) accounted for $1,195 billion. This indicates that from business owners to 9-5 employees, a large part of the American population is still relying on insurance as a safety net for unexpected emergencies.

But, are the existing insurance plans efficient and just towards their users and the insurance companies?

Considering the currently active insurance plans, two individuals who don’t smoke or drink and have the same BMIs will probably be paying the same premium.

But what’s wrong with that?

The problem starts when one of the individuals works out regularly and has a healthy lifestyle, while the other one spends most time lying around with a bag of chips and soda.

Certainly, the latter individual is making unhealthy lifestyle choices that may be a problem for the insurance company. While, on the other hand, the first person is health-conscious and still paying the same premium as someone who isn’t mindful about their health.

This scenario is unjust for the insurance company and their users.

A solution for optimizing these flaws can be a great example of fintech business model innovation.

3. P2P Lending

Here’s yet another solution to the low credit score problem.

P2P, a.k.a peer-to-peer lending, is the process when two individuals indulge in a lending and borrowing transaction without the monetary involvement of any third party.

While this concept has long been popular inside our personal groups, present-day P2P lending platforms (such as Funding Circle) take this to a new level by connecting borrowers to potential lenders, ensuring a trustworthy transaction.

This makes borrowing easier for people with low credit scores. Also, in the fintech lending business models, lenders get to earn decent interest on their money — a clear win for all the parties.

4. Smaller Loans Sanctioning Services

In an age where data is valued like gold, the financial service business ideas can prove to be one of the best fintech business models.

Most of the banks and major lenders avoid offering smaller loan amounts to their borrowers. The primary reason being the low profits that are further diminished by high processing and recovery costs.

However, several fintech businesses are cutting down the challenges for the small borrowers, accelerating the change in fintech industries.

These lenders allow users to easily and quickly pay for the services they avail or the products they buy online, in one click (after a one-time setup). As a result, the users are saved from the effort of waiting for OTPs or recalling their CVVs at the point of purchase.

This fintech payments business model makes the payment procedure super-easy. The loans are sanctioned at low interest rate, so anything can be bought in one click and paid for in multiple installments. And most importantly, the business enabling these transactions gets access to the valuable user data (of course as and when permitted).

Speaking of how the money is made, the data accumulated in the process can be traded to a number of businesses in your niche.

5. Asset Management Platforms

A recent Gallup study reports that 56% of the US population owns at least one stock and a large chunk of this proportion invests actively in the stock market.

Additionally, as per a study published by NORC, a research group at the University of Chicago report, in 2020 over 13% of the Americans started investing in cryptocurrencies, and the number is set to grow further in the coming years.

Certainly, the digital asset industry is on the rise, and it’s the right time for entrepreneurs to place their bets on this fintech business model category.

The simplest idea is to develop cryptocurrency exchange and promote it adequately across the target audience.

How will this model make money?

Like all asset exchanges, your business can also charge brokerage for every trade that a user executes. You can also offer users a referral commission for each referral user that they bring on board.

There’s a world of assets that can be traded over a smartphone these days. Check them out, explore your best bets and make a smart decision.

6. Payment Gateways

All the online transactions across eCommerce, food ordering, or other product/service websites require payment gateways.

However, it costs companies heavily to set up and maintain these payment gateways. This fee goes to banks, developers, and many other resources, making payment gateways an expensive transaction option.

Fortunately, the issue can be resolved by integrating these transactions into apps that online merchants can comfortably afford. Ideally, the user base of these apps will include businesses selling their products or services through their own website.

7. Digital Banking Applications

Another fintech business plan brings the conventional brick and mortar banks to the customers’ smartphones.

According to Statista, as of August 2021, there are 290 million smartphone users in the USA. 

Another report from the FDIC Survey of Household Use of Banking and Financial Services, states that, as of 2019, 124 million American households had bank accounts (accounting for 95% of the US population).

Clearly, banks and smartphones are destined to make a great match, and companies leveraging their potential can do great in the fintech space.

Moving further, it’s important to note that your lack of expertise at application development should not limit you from launching a fintech startup. Appinventiv is a reliable financial software development company that can help you overcome this hurdle.

The FinTech Model Benefits

Financially rewarding 

The financial sector is one of the largest groups of industries in the world, and as a result, there are several opportunities to produce large sums of money. The financial services business models startups are among the best-funded and valued, for example, Coinbase, Ripple, TransferWire.

As per Statista, 75% of consumers globally have adopted some form of money transfer or payment service by 2019.

Slow incumbents

Many existing players (particularly traditional banks) rely on obsolete old systems. This makes responding to rapidly shifting consumer trends incredibly challenging. Some of the newly founded neobanks have taken advantage of this slow incumbent and have begun stealing customers from existing banks. Other incumbents have reacted by forming strategic alliances with these challenger banks, offering the necessary banking licences and regulatory knowledge.

Customer base loyalty

The average adult in the United States has had a bank account for 16 years. Customers trust their banks to keep their assets safe, to borrow money for life-changing purchases such as a house, and to advise them on how to manage their existing cash effectively. While obtaining a customer isn’t cheap (banks, for example, spend billions on various marketing initiatives every year), they tend to be quite loyal throughout their membership.

Economic Democratization

The introduction to business has always been ill-matched. Whether it’s autonomous trading or modern class perfections, not everyone earlier got the opportunity to participate in the economy or gain access to similar economic opportunities. But with technology, the democratization of financial services has been possible. 

Like, the advantages of automation not only lowers the cost, but also extends convenient tools to the public. From a corporate point of view, in the past, only individuals at the top of the pyramid could be economically democratized, but now individuals at the bottom can also make use of such services.

Final words

Looking at the present state of the fintech industry, it won’t be wrong to quote its unexplored potential and what it can do for businesses and users.

In this article, we discussed popular fintech payment business models that have been performing impressively since their arrival and the benefits of the fintech model. The addition of these business models to the traditional banking environment can help the banking and financial services industry reach international standards.

The different types and examples we mentioned, as well as the firms that stand behind these successes, should persuade you to either create your own app or learn more about this issue. 

The post FinTech Business Models – A Complete Guide appeared first on Appinventiv.

One such technology benefit was seen in 2004. The launch of Selenium, an automation tool that changed the way business sectors functioned in their funnel stages. Apart from the multiple common sectors, the impact of technology reflected benefits especially for the financial sector.

The finance industry was always overshadowed by their doubtful security financial services measures. From managing data systems to maintaining it, when it comes to security, the finance industry has issues. Cloud and SaaS can go a long way towards supporting inclusive banks in the developed world.

However, these issues can be eliminated if the finance industry implements SaaS growth for their security measures. As per financesonline, the SaaS space will grow to $623bn in market capitalization by the year 2023.

To help you understand the impact and advantage of this SaaS growth rate process and bootstrap your SaaS business, let this blog be your guide. 

Why Should Financial Services Turn Their Attention Towards Saas?

Financial institutions must be able to connect effectively with their consumers, deliver great service, increase efficiency, and adhere to tight laws and regulations all while saving money. This can be done efficiently through SaaS banking. There are several Welcome-kits, forms, statements, and dunning texts for the financial services authority sector that prove to be vital for organizations to communicate with their clients.

Consulting, training, education, support and maintenance services are all part of the security as a service tools. These services assist clients in comprehending their solutions and procedures. 

During the projected period, the solution segment is expected to have a bigger market share. A considerable number of Small and Medium-sized Enterprises (SMEs) are using security as a service solution to protect their enterprises from cyber threats across their cloud-based applications and platforms.

This use of innovative security services has brought SaaS finance or financial service institutions up to par with their global competition and has changed the traditional banking practices. 

The banks’ Electronic Fund Transfer (EFT) service has changed the money transfer landscape, and the Electronic Clearing Service (ECS) has aided large corporations in paying their salaries, dividends, interest, and refunds electronically on time. The monetary segment today operates in a more competitive setting than in the past, facilitating a relatively large volume of global budgetary streams and channels.

The selection of the ideal SaaS finance tool is critical to the project’s success. Automated tools are easy for beginners to get started with as simple setup digital tools run via multiple browsers. Test cases are built up of repeatable routines, allowing for more productivity with less maintenance. And if you make changes to a frequently used procedure, the changes are instantly reflected in all recognized processes with similar components. Digitized processes reduce the problems that employees face when performing critical tasks on a daily basis in a large institution.

Benefits Of Cloud Hosting

There are numerous benefits of cloud hosting, one being eliminating the need to consider any hardware upkeep in a data center with reference to connections or hard drive maintenance.

Your site is safe from any physical server concerns, such as security issues and hardware breakdowns, with cloud servers and E2E cloud.

The most significant advantage of Cloud Server is in terms of security. A cloud is an immaterial object. Server Hosting, on the other hand, is bound by the same security policies as its users. Firewalls, antivirus scanners, and DDoS (distributed denial of service) protection are all available on various cloud servers.

Cloud servers used to be difficult to manage and utilize, and scaling and optimizing your server required skills. With today’s latest technology and cloud hosting, you can easily keep track of your website and request on-demand help 24 hours a day, 7 days a week to modify your hosting through an easy-to-use dashboard. All of your data are saved in multiple locations throughout the cloud, making it easier for you to access them quickly and without any difficulty. Also in order to run a cloud server, technical knowledge isn’t required.

Fighting against cyber attacks

Despite the fact that the financial industry is one of the most heavily regulated and protected with regards to cyber defenses, fraudsters are still pursuing the valuable information held by these businesses. According to Business wire, 73% of fintech SaaS companies have at least one critical security misconfiguration.

Hence such threats must be addressed from a defensive standpoint using a three-tiered approach which includes people, procedures, and technology which is easily possible in a Saas financial model.

A cyber attack on a financial institution will cause far more damage than just money alone. People have faith in financial institutions because they believe they are safer than other options. With a data breach, investors and customers will lose faith in the SaaS development company and the bottom line will suffer as a result. The approach should be SaaS banking to solve such issues.

Security plan 

SaaS industry growth helps to design a comprehensive cybersecurity plan for your financial organization as a strategic partner. They would enforce a group of trained security professionals with extensive experience dealing with financial institutions’ most pressing cyber threats. 

As per some reports, 28% of IT leaders are already using some kind of SaaS financing management tool to get visibility into shadow IT that is necessary to protect their data and systems.’’

SaaS product ideas provide a range of financial services authority to assist your financial security network measures, test your defenses, and find any gaps in the present information security SaaS approach. They can also provide a comprehensive set of SOC-as-a-Service capabilities and services to safeguard your network, endpoints, cloud apps, and infrastructure.

Security in the SaaS business financial model is a heated topic. Expert assistance is available through SaaS financing based technologies to help you handle compliance issues and cyber dangers. To meet the financial sector’s cybersecurity needs, they combine financial expertise with extensive cybersecurity experience.

To enable proper decision-making and future planning, every organization should generate reports with meaningful data collected from all sources feasible. Instead of a separate design for numerous platforms, the reports developed using cloud-based security service platforms are unified into a single dashboard. The process of comparing all of your data and input is done in a more strategic manner using report-generating capabilities.

Advisory benefits 

Many restrictions necessitate the implementation of a comprehensive cybersecurity program by financial organizations. SaaS security tools can assist you in developing or refining your application to satisfy this criterion. They assess your present program maturity, identify its strengths, and provide a complete analysis, as well as a detailed action plan to address any shortcomings and address your most pressing needs.

SaaS security tools customize their evaluations to provide an objective assessment of your security financial services program in comparison to the GLBA and other legislation’ criteria. They can also advise your financial services software companies on the best ways to solve compliance or overall security deficiencies.

These tools include a variety of red-team and tabletop activities for putting your cybersecurity program through its paces with reference to the real-world circumstances. These exercises can be used to test the technical aspects of your financial security services program on a functional level, or they can be used to test your company’s security program at a higher, corporate decision-maker level.

Insider Threats 

Finally, a comprehensive cybersecurity strategy must take into account the individuals involved. As a result, SaaS-based applications exist to assist detecting and preventing insider threats,  blocking advanced and persistent bots and digital skimming assaults. They defend your websites and applications from automated attacks while enabling business-critical traffic to pass unhindered. On the other hand, these financial security services develop Client-Side Protection solutions that are customisable according to your institution.

Conclusion 

Financial institutions handle large amounts of extremely sensitive personally identifiable information and must adhere to the strictest financial security network standards. To avoid costly breaches and non-compliance, SaaS business financial models protect your customer data and business-critical apps wherever they live.

Current security as a service platform and SaaS application development company in USA helps you in ensuring a smooth and quick cloud migration while being secure and compliant. Whether on-premises, in the cloud, or a hybrid environment, SaaS financial models and applications can help you manage risk and better protect your assets. 

The post Financial Services Must Rethink Their Security Approach With Saas Growth appeared first on Appinventiv.

The global fintech marketplace is a gargantuan digital-scape. As of last year, its total size was over $111 billion, and if the projections are anything to go by, then the fintech industry would continue its march to be valued at an estimated $191 billion by 2025. 

Yet, with such rosy numbers, it is easy to forget the fact that so many fintech startups flounder and disappear into oblivion. 

What are the possible causes of failure and how to avoid stepping on landmines that cause companies to crumble, we’ll cover the long and short of it today.  

But first.

Why is Now the Right Time to Invest in Fintech

Fintech is one of the hottest sectors to get investors excited. Legacy institutions such as credit unions (69%) and banks (49%) firmly believe that Fintech partnerships are worth pursuing. But that is not the standalone reason why Fintech is worth a second-look for investment, we share a few more down below: 

Fintech Technology is Acquiring Prominence   

There are over 12,000 fintech startups in the world that combine to make the global fintech marketplace worth US$4.7 trillion. Fintech companies are considered bankable investments because they offer a sleek user experience. Low-cost entry barriers and scalable technology offer a promising investment outlook. Not to mention the ease of integration with associates domains adds to the luster and multiplies business opportunities.   

Abundance of APIs 

We have time and again talked about we pointed to the necessity and permutations for financial companies to collaborate more often than their current rate with fintech startups. Public APIs are one-factor precipitating such collaborations. Starting a fintech company subliminally means a technological need to use more and more open-source APIs to easily join hands with financial bigwig institutions. Although APIs are an effect rather than the cause, they nevertheless accentuate business opportunities for the overall financial services industry. Case in point, the following types of APIs have made lives simpler for users: 

• Payment processing APIs – Engineers in the fintech application development space have devised solutions with these APIs so merchants can accept multi-modal payments.
• Lending Program APIs – They automate loan issuing workflows. 
• Regulation Technology APIs – RegTech emerged from Fintech and offers app owners options to verify their users. 

Rising Government Interest

The pandemic exposed inadequacies in the financial infrastructure used by federal institutions. Los Angeles was a prime example of it, wherein it failed to equitably distribute financial aid to needy communities. To overcome the same state authorities increased their investments in fintech and partnered with Master card. The latter lent support to collect donations via text messages and distribute the same to eligible recipients through debit cards. A digitized version of the future warrants more collaborations of the kind just mentioned. 

Consumer Mindset 

Higher internet adoption rates and an increase in the rate of digitization has upped customer expectations for even basic banking services. 24/7 service availability is a must. People expect an instant resolution to their needs, especially when it comes to financial grievances, failing which brand loyalties go for a toss. 

Being one of the dominant regional players for fintech app development, we at Appinventiv face a voluminous frequency of inquiries for such ventures. Our experience validates a long-held, industry-wide belief that people are turning to such apps for their comfort and factor. 

A Pumped-Up Workforce 

Fintech’s have proven more than a satisfactory place to work, putting it mildly, for employees. A study of Glassdoor reviews by fintech employees at 15 companies brought out a cumulative rating of 4.1 (on a scale of 1-5 with 5 being good and 1 bad) for fintech companies. 

Whether you need someone with a background in financial service consulting or a virtual collaborator to work on your project, we’re sure you could do with some professionals who’re actually excited about their work and don’t just treat it as a 9 – 5 chore. 

Why Do Fintech Businesses Perish? 

The answer is not that complicated, to begin with. As per the Wall Street Journal, about 75% of venture-backed fintech startups fail. Analysts have debated the causes for such a high fintech failure rate, considering the casualties are lying by the wayside in hundreds. Below we mention some gleamingly evident causes for a fintech startups’ failure:  

Timing Your Finances 

It’s true that investments in the sector have grown over time but don’t mistake it with the notion that money is available when you need it the most. The misconception that an official hand-shake with an investor equals immediate fund-releases is baseless. It could take from 3 months to a year until the investor finally hands-over the monies. 

Play it safe by planning at least six months to the actual juncture when you would need the money. The notable failure of fintech companies points partly to the fact that investors would rather wait for the right time to invest than splurge their capital on wannabes. 

Ignoring Federal Rules 

One of the solutions of fintech startup companies could lie in complying with the rules and regulations set forth by federal institutions in the US. Although not without its loose ends, the US is a beaming example of the guidelines laid for financial institutions and the consequences of delinquencies. Some of the largest financial entities in the world have been subjected to heavy fines for not complying with the law of the land. 

A red tape exists not just on the operational end but also at the development end. Fintech app developers must ensure they use agreeable practices to achieve the business ends of the app. These could involve respecting local/international data/privacy laws. 

There are 3 laws in particular that fintech app development should make special room for:  

KYC – Know Your Customer guidelines of an app allow vendors to verify the identity of their clients and encourage people to be honest with their disclosures. 

Anti-Money Laundering – In-built AML protocols make it clear to financial app users that misappropriation and illegitimate accumulation of funds, using an app is against the law and a punishable offense. 

Payments Service Directive – This directive applies to all European Union member 

countries and enlists provisions for inter-country payment transfer within the EU. 

(Not) Understanding Money 

In most industries the trade-off between a customer and a business entity is straightforward. You pay for a service/product and that’s about it. But finance is a different ball game, a fact that directly impacts fintech mobile app development increasing the risks for fintech businesses. Here money is the product, bending the conventional rules of marketing. Therefore, it is vital that business owners perceive the function of money either through scholarly work or by bringing on-board the right advisors.  

Lose Cost Metrics 

Often, the failure of fintech startups originates from the source wherein they are unclear about their revenue model. Launching a me-too app with cut-throat prices is not the way to build long-term trust and followership. Brands with strong product differentiators stand the best chance to beat the competition heat. 

Economic Cycles

Lastly, before you patch up with a fintech software development company to put your financial app plans in full swing, you should consider studying the economic cycle the target country is under. The straightforward reason for this is that you don’t want to be in direct contradiction with the national economic policy. If the business cycles are all for digitized solutions, then you are sure to prosper. 

Tips for Fintech Business Success

Empathize with the Customer

Modern-day customers have realized that online financial services are much too comfortable to not go for. Where traditional banks lack the organizational agility to shift gears and churn new fintech products overnight, startups carry an element of surprise. They can tap into the latest needs of their audience and bundle the services in a single pack, tacking crucial businesses away from legacy banks. 

Services like mobile banking, digital wallets, instant payment transfers, and online lending fall right up fintech’s alley. This is what people expect from fintech companies, in the least.   

Minimalism Sells 

Fintech software developers mustn’t overload their apps with unwanted stickers and peeping pop-ups. Keeping things minimal is often the best approach. You should model apps with intuitive functionalities that encourage users to be done with their objective ASAP. 

Build Trust 

Operations scale automatically when you match the frequency of your customers and continue delivering superfluous levels of customer service. But reputation is built only over time and can be thrashed in one instance. Create an aura about your brand that makes people automatically want to be associated with you. Virally market customer success stories as online audiences are attracted to user-generated content on social platforms. There’s no telling how many referrals business this could get you.  

Keeping Innovating 

Blockchain, artificial intelligence, augmented reality and 5G are some of the technologies disrupting banking. Business heads need to be wary of such industrial shapeshifts and integrate as much of it as possible in their product suite. Ant Financial (formerly Alipay) is the prime example of this approach. What started as a single-offering payment portal is today a multi-billion dollar company leveling the likes of JP Morgan Chase and Goldman Sachs. 

Take Inspiration From the Best Fintech Brands

While the tendency to learn the ropes of fintech persists, you should explore the likes of the following companies that have made it big. We’ll glance over the key contributors for their success. 

Stripe

Founded in 2010, within a decade, it has emerged as a formidable fintech giant with its SaaS payments platform for E-commerce websites. Though all-encompassing in the scope of its API, even today the platform is as easy to integrate with third-party websites as it was in its nascent years. Subscribers have the liberty to customize their plans as peruse, with Stripe having built a name for itself in customer service as well. It is valued at $36 billion.

Robinhood 

Valued at $11.2 billion, Robinhood is a prime example of an incisive, focused approach keeping product design and marketing inter-operating with one another. A favorite among millennials, the app allows retail investors to invest without any trade commissions. The UI is simple and lets users self-direct onto making in-app navigational decisions. Robinhood’s primary sources of income include its Gold memberships and charged-interest on stock/cash holdings.

Lufax  

Officiated in China, Lufax is estimated to be worth $38 billion. Starting as a peer-to-peer lending platform, it has now diversified operations into subsidiary financial services. Its ability to harness big data and predictive analytics has propelled it to do 200, 000+ P2P transactions hitherto with more than 14m million platform subscribers.

Paytm 

Values at $16 billion, Paytm is an Indian fintech unicorn most known for its payment services. It has strived forward at warp speed to act as the leading aggregator for all kinds of payments, P2P or business. Among its recent flagship products, is the Paytm Payments Bank that is gaining traction. The reason it struck a chord with the people of India is due to the “essential” nature of its services and the have-it-all marketing attitude.

Rounding it All

Failures happen all the time, but so do success stories. Being one of the well-acknowledged fintech app development companies in the region, Appinventiv commands the collective expertise of 600+ technocrats who put in colossal shifts to turn mere projects into front-page headlines. We have the chutzpah to turn fintech ideas into million-dollar earning companies, the question is do you have what it takes to get there? 

Let’s connect and find out!

The post How to Prevent Your Fintech Startup From Failing appeared first on Appinventiv.

Every once a decade, technology innovation and customer demand merge in a way that drastically changes the consumer-facing financial service sector. 

For instance, when The Motley Fool, eTrade, and Intuit came into the market some decades ago, consumers took it upon themselves to personally manage their finances and invest their savings in places that would get them maximum returns. 

In 2021, the financial service industry is again staring at disruption. A number of technological and economic factors have developed a perfect situation where people are deciding how they want to manage their pay, pay for services and goods, finance a car or home, or even how they want to borrow. 

To answer these changes and shape the future of lending, a number of tech-driven consumer-facing financial services companies have entered the market to address this consumer behavior shift. The entrants have become the reason why lending has become one of the most profitable finance app ideas.

In this article, we will be diving into the many changes that now stare at the lending centric consumer financial services landscape and how technologies are fueling the shift. 

What is Contributing to the Evolving Landscape of Digital Lending?

The changing space of digital lending transformation is bringing a remarkable shift in credit analysis and bank loans. The rise of technology progress and big data has led to a series of alternatives coming into the market questioning the credibility of credit score – a prime factor driving the lending industry. 

When we dive into the changes that are taking place in one of the slowest transforming financial services, we can find four factors fueling the digitalization of the consumer financial services space – 

• Changing consumer behaviors – especially the COVID-19 driven behavior 
• Rapid technological changes 
• Changes in compliance and regulations 
• Innovations happening in the space of simplification of operating models. 

The combination of these four factors has given birth to a time where consumer insights are blended with product innovations to make fintech consumer lending a lot more inclusive. In addition to serving only the high credit-worthy consumers, the future of credit industry is now powered to involve consumer segments with low credit history (low-income households, students, freelancers, etc.). 

The digital lending landscape has grown to an extent that it can now be categorized into three sectors –

The ultimate aim of the technology-induced digitalization innovations happening in the sector – across the three subsets – is to digitize the entire customer journey (from KYC to reporting) at speed and at scale at a level where the traditional lending system could never reach. 

How is Digital Lending Changing With Technological Advancements?

1. A new way of vetting applicants have come on the surface

New credit mechanisms are building on the proposition that traditional ways of applicants’ approval on the basis of FICO credit score is an incomplete sign of applicants’ creditworthiness. 

By using artificial intelligence, new models are being developed. These models factor in information surrounding thousands of data points like employment history, education details, and spending habits to verify if an applicant will be able to clear the debts on time. On the basis of these insights, a new credit score is coming to the surface as the future of consumer lending. 

2.  AI-backed strategy and sales streamlining 

Digital lenders have started asking their partnered fintech app development companies to use machine learning for enhancing loans by making underwriting decisions. The algorithms can help validate if the applicants are telling the truth about their income level. 

The process is best suited for people having an insufficient credit history, less income, or anyone who is charged higher interest because of the lack of financial data. Machine learning is also being used heavily for its ability to detect fraud through analysis of customer behavior backed by the time they spend answering applications’ questions, looking at the price options, etc. 

3.  Blockchain eliminating the need for intermediaries 

Through the mode of blockchain, digital lending companies can develop a high trust, low-cost platform. With the complete loan process existing online, people will be able to keep a record of documents and transactions on an anonymous digital ledger platform thus eliminating the need for third parties and intermediaries. 

4.  Cloud computing solving digital lending sector uptime concerns

The most common corners of the lending sector are – security, storage, and 24*7 upkeep time. Cloud computing solves all these issues in addition to offering a series of additional benefits like 

• Secure connections
• Cost-effective and time-efficient management 
• Disaster recovery 
• Simplified online processes 
• Automation of processes

While these technologies are playing a key role in bettering the state of digital lending, what is important for the sector to keep evolving. A way the sector can keep getting efficient is by knowing the trends that are waiting for them in 2021 as the future of consumer credit. 

Digital Lending Market Trends 2021-22

1. NLP will better customer experience

Smart lending systems will be using NLP for recognizing and understanding customers’ questions and converting them into actionable data. There are multiple applications that the digital lending companies will be experimenting with in 2021 – 

• Lenders will be able to offer advice to basic queries through a chatbot
• They will use the technology for analyzing customers’ feedback, getting insights that can help them improve the customer experience. 
• Analyze the data to better the credit scoring accuracy

2.  Regulatory sandboxing

While the consumer lending sector needs constant innovation in order to develop and grow, it also needs regulation for ensuring security, safety, and ethics. Sandboxing is how both factors can be respected in the modern lending system. 

It is the mode f testing innovative services in a controlled setting for the regulators to conduct their assessments before a complete rollout. The Compliance Assistance Sandbox (CAS) Policy, announced in 2019 highlights the process. 

“After the [Consumer and Financial Protection Bureau or CFPB] evaluates the product or service for compliance with relevant law, an approved applicant that complies in good faith with the terms of the approval will have a ‘safe harbor’ from liability for specified conduct during the testing period. Approvals under the CAS Policy will provide protection from liability under the Truth in Lending Act, the Electronic Fund Transfer Act, and the Equal Credit Opportunity Act.”

3.  Greater omnichannel capabilities 

Technology will be seamlessly connecting the lender with borrowers through a self-service holistic digital experience. The year will see borrowers picking up on the half application form which they started on their phone, on their laptops. 

Omnichannel capabilities that make it easy for them to jump from one platform to another without any shift in experience is what would help the digital lenders rule the year while becoming one of the key mobile app development financial services. 

4.  Non-banking institutions will continue entering the space

We have already seen Amazon offering loans to small businesses and Apple announcing its credit card. All of these innovations are the advanced stages of companies’ capabilities and how they help their customers reach their goals. 

The year will see the consumer finance market getting introduced with a greater number of P2P consumer lending organizations. Backed by the abilities of new-gen technologies like Blockchain and AI, consumer financing companies will be giving banking institutions a tough competition. 

Now that we have looked into the many ways consumer lending businesses are getting prepared to rule the sector through their partnership with a skilled fintech application development company, let us close the article by looking into some ways you can become the next big digital lender. 

How Can You Become a Digital Lender?

There are a number of brands that have placed themselves in the future of the consumer financial at the back of their digital inclination. 

Shifting from a traditional lending mindset to a digital bank oriented one is not an easy task. There will be resistance to change, an unacceptance towards risk, and other things. A digital bank transformation will require a strategic foundation-supported across all organization levels. As a lender, you will have to focus on offering an exceptional digital experience to your consumers. The last thing you would want is getting axed by Google on Play Store at the back of a bad experience and lack of regulations-compliance assurance. Here are some things that we recommend on the basis of our extensive skill set as a financial software development company –

• Provide transparent information on the approval guidelines
• Develop new training material, gen-z inclined communication about new policies
• Provide alternate channels to your consumers. Don’t force them to visit branches. 

The secret sauce of your lending business success will be transparency and communication. The more open your business is, the more will be the chances of your consumers to choose alternative lending models. We can help you strategize your lending process digitalization. Contact our team of strategists.

The post How is Technology Changing the Future of Consumer Lending? appeared first on Appinventiv.

In this article, we’ll be focusing on the possible measures they can implement to do so. 

How has the Insurance Industry changed? 

Insurance is not the ball game it once used to be when the incoming customer used to feel indebted to a company for assured support in challenging times. Technological disruption has made entering the marketplace rather easier, giving rise to a legion of adversaries, making it one of the most investment friendly Fintech domains. And that is just a quarter of the rising events that legacy insurers need to be concerned about. Below, we mention 4 critical changemakers: 

1.  Customer experience 

The entry of insurance startups into the fray makes meeting customer expectations a labyrinthine challenge to solve. That’s because more players now offer similar products at cut-throat prices, squelching the profits out further. An abundance of choices makes loyalty prone to swings causing nightmarish customer churns. Customer-centricity needs to be revisited. 

Quality post-sales service tops the agenda for most insurers and that in turn rests on two pillars. First, employing an efficient frontline with updated product expertise and relationship management acumen. And second, packaging exciting add-ons as part of the insurance deal for policyholders. 

2.  Product Development 

Innovation in the insurance industry is low in relation to other professions. At the time being it is spurred by evolving customer demands. Financial biggies in the sector have to understand low-cost, short-term solutions will land them nowhere. There is a colossal shift in introducing new service delivery models that overlap and extend beyond traditional insurance schemes for life. In other words, technology innovation for sustainable development. For instance, if you are selling car insurance, why wait for the car to run its course, pun intended. Try coupling roadside assistance with 24/7 customer service. Over the last three years, insurers have benefited from injecting such service-based packages to their product lines. 

3.  Business Restructuring

You might wonder if the same household names have been dominant here to fore then why should they even consider changing anything. Precisely because of the pointers mentioned above. Fintech insurance startups are raising eyebrows with their quick to market schemes by leveraging new age innovation. Although they are not enough on their own to shake things up, yet their rising traction is noticeable.

The way forward for key insurance players is, therefore, to enter partnership agreements. You could join forces with niche players and/or insurance tech startups. The reason you do this is part survival part progress. 

4.  Digital Transformation 

Legacy insurance businesses are shy in swiftly adopting the technology. There has been a sharp rise in the demand for mobile app development in the insurance sector. Some of it has to do with a lack of level headed solution architects that can predict change and integrate it into the system. Much good would transpire if only the companies could timely welcome upcoming technologies such as blockchain, AI, and data science. Which brings us to our next section. 

Technologies Impacting the Insurance Industry 

Having factored the changemakers let us now familiarize ourselves with the technologies responsible for most commotion in this field. Needless to say, the more this industry is flexible in working with such tech, the higher its chances of outreach to new customers cohorts. 

Predictive Analytics 

Insurance companies can be singled out for collecting extreme amounts of sensitive information on their customers. And though they deeply analyze their numbers before creating a new scheme, data analytics can further refine and augment that research. Value-adding discoveries in Big Data analytics can lead to breakthrough predictions that prevent fraudulent transactions, indicate associated risk exposure in customer profiles, identifying patterns in claims volumes, and target lead prospects with pinpoint accuracy. 

Artificial Intelligence 

There’s no telling how much paperwork is involved in filing a claim. Not to mention, the chances of human error as typos which could be disastrous. Artificial Intelligence has the potential to remediate this and more. AI can be deployed to enhance customer service and quick filing leading to shorter revert-times. It can add that wee bit of personalization in software-driven interactions that help customers convey their message clearly. The 21st century marks the beginning of the age of innovation and if insurers intend to propel, so must their backend systems.  

Augmented Reality/ Virtual Reality

Lately, fintech app development has been focusing on integrating AR/VR-based specs in their products. Be it a customer buying insurance and or investing on part of a business into a new portfolio, AR/VR can suffice for both. They add an extra level of comfort and convenience in claim handling (for customers) and accident recreation (for insurers). Insurance ventures will find it useful to educate and make-aware their leads about related topics if their fintech application development can run AR/VR-powered video demonstrations. 

Blockchain 

Blockchain technology has made inroads in Finance to a good effect. Financial companies that rely on Blockchain can safeguard their records to an immutable extent, and mitigate cyber risks. They could automate the process of claims handling with smart contracts and process settlements in near real-time with instant payment release mechanisms. Theoretically, this infrastructure would have the capability to reduce or wipe-out, middlemen. 

Telematics 

Telematics refers to the use of installable, GPS-enabled hardware that can analyze the use of an asset, such as a car, truck, manufacturing equipment etc., to recommend areas where one can save maintenance costs. Telematics devices can alert users at times of asset-overuse thereby preventing an impending disaster and possibly saving lives. Drive Safe & Save offered by State Farm is an example of a telematics product, bringing a rise in the demand to know how much it costs to build an app like the auto insurance app. 

Innovation Standards – A work Under Progress 

Technology innovation in the insurance industry is a bull that few insurers want to hold by the horn. A framework must guide digital innovation in insurance to speed the introduction of new standards. But the million dollar question remains, what are the ways that insurers could vent in a fresh air of regeneration? 

Incubate Insurance Innovation Partners – Legacy financial companies must prowl for start-up partners and act as their guardians in maneuvering tactical business steps. Technology and innovation in the insurance sector could tick forward if such trade-offs include sharing technical expertise, benefitting both the parties. 

Invest in Insurtech – It is an undeniable reality that Insurtech, today, are flag bearers of the title insurance innovators. Their operations are uninhibited by traditional policies stifling newage growth in the industry. Infusing capital and relishing in profit-sharing is one way of bettering revenue lines. 

Inhouse Investing – While keeping an eye out for developments, do not forget to allocate sufficient budgets for upgrading your inhouse capabilities. The ultimate ball-game is to make your IT teams sustainable and independent of any vendor assistance. 

Outsource – Finance app development is sometimes best-handled by fintech app development companies. Such niche vendors possess quick turn-around development time-frames that are hard to replicate, even remotely. Appinventiv has had tremendous success in all the technologies that are spanning their effect in finance be it AI, chatbots, wearables, or Blockchain. Our service catalogue is one that we are immensely proud of and which is sure to impress you. 

Taking Legacy Systems from Lackluster to Powerhouses 

Notwithstanding this sector, innovation and industry are not distinct from each other but two end points of the same line. Financial biggies could rejuvenate themselves but they need to ask serious questions. 

• Enterprise systems are being modernized with new capabilities and therefore witnessing a wave of adoption amongst the established players. To begin the purchase and installation of such software in your company, calculate its plus and minuses and explore all options of ownership. 
• Once installed, such systems are sure to let you provision stylistical methods for financial application development. You would begin by experimenting with a single business unit at a standalone geographic location to mitigate risk. Once successful, your next aim would be to extend such capabilities to off-shore bases. Remember to have your numbers intact to justify such a migration. 
• Information system migration should be effectuated at the lowest possible costs. Therefore, avoid commencing end-to-end coding sprints to get such a system up and running. Try and find a minimalist solution for getting started with projects such as a finance mobile app development.
• Don’t just look for software that fits into your processes, but also processes that will be compatible with the software. Careful attention at this step will cut short the back-propagation you might have to perform in a scenario if things go south. 

The Future of the Insurance Industry 

Based on what we’ve discussed so far, the future of the insurance industry lies in fostering partnerships with promising startups, building associations with peers and welcoming top-down innovation within the organizational structure. Financial app development companies, the likes of which Appinventiv represents, can assist renowned financial giants with plug-and-play software systems portioned to their scale of operations. On most occasions, our portfolio speaks for itself, on others we do! If that’s the case, drop in an enquiry and we’d be happy to connect.

The post How Can Insurance Enterprises Innovate Themselves to Beat the Competition appeared first on Appinventiv.

But the rapid, and recent, technological advancement has seen the finance sector introduce fleets of new digital solutions that place them right at the fingertips of people. 

As a result of this wave of digital transformation, pre-existing companies and startups in the insurance market, are exploring the prospect of mobile applications. Lest we forget to stress, aggressively. The new insurance applications, if we can call them that, would need a touch of finesse considering the diversified nature of operations. So what should software developers concentrate on when it comes to Insurtech apps. 

It is to answer this throbbing question that we have this mini mobile application guide ready for you to take your first steps towards creating innovation in your insurance business.

Why Does An Insurance Company Need a Mobile App? 

Insurance, by tradition, has been powered by middlemen. Although taking them entirely out of the picture may not be plausible, mitigating their involvement will grow profit margins, naturally. 

Mobile apps allow real-time B2C interaction, without intermediaries. The positivity also flows down to the customer experience, which can never be exaggerated. And insurtech would be too smart for its own good, not to explore this option.  

There are three main components that play a vital role in formulating the proverbial pyramid of an insurance company. The pyramid. which had played a major role in helping Wefox raise $110M in 2019. 

This includes first the insurer that incorporates and markets financial products. Second, are the third-party entities that provide the services covered by the insurer. And the third is the end-user, the customer who has opted in to be insured. 

Mobile insurance solutions offer the following advantages to insurance companies at the top of the pyramid: 

Establish Customer Contact 

Buyers are more conscious of spending than before. As per stats, 85% of the customers conduct online research before placing their purchase order. Insurance mobile apps make a fine impression in convincing people of instant support in dire need. A study discovered that up to 63% of its sample population was inclined to communicate with a chatbot. Therefore we have reason to believe registered policy-holders will favor to download and track policies over mobile. Building on this, they can draw a comparison between multiple products and shortlist the ones with better benefits. 

Increase User Reach 

Provide good customer service and turn clients into business affiliates. Referral programs can get you more buyers to loop in provided your mobile insurance solutions are state of the art. There are dual benefits to this. First, optimizing customer recruitment cycles would free up time for insurance agents to target bigger, better clients. And second, you can advertise your mobile insurance platform in related apps to target more customers with semantics marketing. 

Study Customer Data 

The insurance industry can tap into mobile analytics which they can analyse to an extent like never before. Insurance applications can easily gather the following types of structured data: 

Identity Data – This includes name, D.O.B, physical address, telephone information, email Id, and or links to social media profiles such as Facebook, Twitter, LinkedIn, etc. 

Quantitative Data – This is transactional data such as bank account details, credit score, frequency of payments, etc.

Descriptive Data – Insurers may need their customers to disclose property details, car ownerships. professional standing, educational background, along with the family tree. 

Qualitative data – This includes subjective/behavioral details such as favorite color, hobbies, etc. 

Collecting such vivid information, companies operating in the insurance market can subsequently filter the best-fit prospects for upselling. 

Facilitate Convenient Services 

One of the most common KRAs of those in the finance-frontline is client visits. This could be either for background checks or personal form submission or a routine update of information. Be that as it may, the current COVID-19 crisis does not permit face-to-face screenings. Moreover, the coronavirus onset has led to a rise in demand for insurance applications. As per a study by Lincoln Financial Group, digital alternatives increase the likelihood of people opting in for life insurance. Make hay while the sun shines.

Universal Features for Insurance Apps 

Appinventiv, as one of the renowned financial app development company, has appreciable experience in creating cutting edge on-demand digital products. Coupling experience with client feedback, we recommend against loading an app with features just to make it look fab. There has to be synergy between the color palettes, smart use of white spaces, typographic fonts, and strategic positioning of icons and images. Only then does an app have a life of its own. After taking care of such design elements we can refocus our aim towards integrating the right feature sets. 

To give you an overview of the Fintech sector that is attracting investors’ attention,  there are four categories of apps that can be developed in the insurtech domain: 

• Life Insurance 
• Car Insurance 
• Travel Insurance 
• Health Insurance

Apps must have a strong backend. They should be able to withstand peak rises in traffic, or if the company decides to implement a new software system without many amendments to the architecture.

Based on our experience, we will first list the mutual features that can be found in all of the above categories. These features formulate the kernel of a general application guide for Fintech app ideas. Barring few niche specifications, the following features remain steady and ever-present especially during a fintech app development of any kind:

1.  Admin Panel

This is the introductory page where the basic information about the insured person is displayed. Make sure it is lean, clean along with clear call to action buttons. Take the Geico insurance app for instance. It’s a car insurance app and hence the profile page displays information related to vehicle IDs, roadside assistance, payment buttons and an option to switch policies. Pretty simplistic. 

2.  Policy Details 

This page displays the details of the policy, the manner, and the extent of your benefits. Continuing the same example, since Geico is an auto insurance app, it displays information about several policies that a single user could be enrolled into such as one for the car, the other for a bike, and so on.

3.  Quote & Filters

A very useful feature particularly in finance app development. In the previous section, we listed the kind of data that an insurer could collect through a mobile app. The Quote-tab offers a feature where the app can fetch your data from its records and either connect you to an insurance agent or directly state the price of a policy. Assuming the company has the resources to work with Big Data, it can pitch discounted prices or more benefits to customers based on their frequency of asking/exploring new policies.

4.  File a Claim

Integrating a claims-filing section remains the most prioritized stage of financial application development. The run-around days to lodge claims are a thing of the past. Submitting proofs should be as simple as clicking a picture, be it from the scanner of the app or the camera of the phone. If the entire process can be concluded on a single page, all the better.  

5.  Payment Gateway 

No points for guessing, integration of payment gateway is super necessary for any form of finance mobile app development. The gateway should accept payments from all major network providers such as Visa, Master Card, etc. In addition to that automated billing for EMIs or a single click payment process should be integrated. 

6.  Customer Support 

Chatbots are not extraordinary anymore. Automated responses act as a quick-fix for run of the mill questions. But what about accidental circumstances. You can’t expect a user who’s stranded with a broken vehicle to rely on pre-feeded answers. As a result, integrate a Request a Call Back or Connect with a Representative option. Such in-app call functionality will serve to make the app what it actually is, a disaster averting, quick response machinery.

7.  Push Notifications 

Businesses, in general, don’t miss opportunities to enter a new market segment, let alone insurance companies. The latter might even tweak its business models, should the need present itself. Whereas seasonal offers are heard of, the idea of a flash sale was experimented with by Liberty Insurance in the not quite distant past. You need an excuse for giveaways and so do the customers for buying your products. Therefore, send regular push notifications informing people of their outstanding sum and any upcoming policies they can swap their current ones with. 

8.  Document Upload/Storage 

How would the customer upload their documents, let alone a photo, if the Fintech application development did not incorporate it? Not only must the mobile app allow document upload from local file directories but also import, if need be, from third party servers as in the case of emails. 

*Images Source

In our lifetime, and we’ve only just begun, Appinventiv – the Clutch backed top Fintech app development company – has worked with over 12 Fintech companies whose solutions facilitate a user base of over 5 million people. 

Based on this grind, we can say that the above features are commonly found in most Fintech apps, if not all. But what about domain-specific areas. Of course, the features would differ as would the architecture. But at a B2C level, we can broadly state in-app features for a few domains, as we’ve done below. 

Where Does Your Business Go From Here?

To the stratosphere if you shake hands with one of the most promising Fintech app development companies. We don’t like self-glorification. It would suit you more to go through our comprehensive product suit and decide for yourself. But just so we know we did our bit, if there is anything under the sun in Fintech/insurtech, that you’re interested in, we’d be happy to burn our night lamp for you. 

Peace out.

The post Mobile App Development Guide for the Insurtech Sector appeared first on Appinventiv.

According to Statista, total transaction value in personal finance is expected to show an annual growth rate (CAGR 2020-2024) of 25.0% resulting in a projected total amount of US$1,715,072m by 2024. This, in turn, is bringing the global personal finance management market on a growth spurt.

I am well aware of the fact that there are a number of such finance apps developed by financial software development companies in the market today but I am here to guide you about your personal finance web app idea. With the right approach, you can easily join the market leaders. So let’s get on to business, shall we?

What is the role of a personal finance app?

Finance apps make your life easier by helping you to manage your finances efficiently. The best personal finance app will not only help you with budgeting and accounting but also give you helpful insights about money management. It gives users various investment options, tax advice, insurance inputs and above all, a proper security system. The extensive role of a personal finance app makes them a key part of the Fintech trends list.

Types of finance apps

There are many market leaders when it comes to finance apps but we can roughly divide it into two main categories – simple apps with manual data entry process and complex apps with automated entry process. Let’s dig a little deeper!

1.  Simple finance apps

As the name suggests, these are the simplest apps to track income and expenditures. These apps generally work on manual information inputs.

Pros:

• The risk factor is zero since no bank accounts are linked to these apps.
• These apps are very cheap when it comes to the personal finance app development process. 

Cons:

• The human error rate is high because of the manual data entry process.
• The entire process is time taking.

2.  Complex finance apps

The complex finance apps are more advanced. They allow users to link their bank accounts and cards, through which data is synchronized automatically. 

Pros:

• These apps are generally a lot more all-encompassing. They allow users to perform a series of tasks in place of a limited few. 
• The efficiency of complex finance apps is high since they save valuable time for the user.
• Real-time transaction updates so the user is always conscious about the money management process.

Cons:

•  The personal finance app development cost for these apps is generally high.

[Related: Cost of Robinhood Like Application and Cost of Cleo Like AI Budgeting App]

• It is important to invest more on security since the personal finance mobile app development deals with confidential and crucial data.

Key financial app features to make your finance app a big hit

1.  Account integration 

Make sure your financial management software accumulates all financial accounts of the consumer, for example credit cards, debit cards, loans, mutual funds, etc. Your finance app should be a one-stop solution for everything related to or required for money management. 

2.  Security

With such confidential details and credentials comes great responsibility. This is one of the key lessons that businesses can learn from Fintech companies. Creating a finance management app is one thing but making a secure one is completely a different story. There are many technologies that can help keep your money less vulnerable and more secure. Some of these technologies are listed below:

• Biometric security measurements: It involves unique characteristics of a person, such as voice or fingerprint patterns. With biometrics, it can be extremely difficult for someone to break into your money management app.
• Multi-factor authentication: This adds on an extra coating of security.  Two-factor authentication process makes it even harder for attackers to gain access to a consumer’s sensitive information. 
• Real-time alerts: It is important that your personal finance management software notifies users in real time. Customers develop great confidence when they know for a fact that they will receive a notification if anyone is trying to access their account or personal information. 

3.  AI algorithms 

There are many ways AI is reforming the mobile app industry in terms of user engagement and developer app revenue. Artificial intelligence algorithms will help you personalize the user experience. Let’s discuss how AI can make management of personal finance more effective. 

• AI will help you incorporate expenditure categorization. This will aim to classify the cost spent on a specific category for example, medical, entertainment, groceries, investment, etc. 
• AI also looks into expenditure analytics, which automatically updates and provides you with data visualization of your money spent on each category.

4.  AI chatbots for useful advice

AI chatbots provide access to all of a customer’s data. Further the app can analyze and provide suggestions. The solution can keep track of the spending habits, give insights into the credit scores, manage budgets etc. This enables AI-based recommendations which ultimately helps with efficient money management. The AI-based customer service chatbots are imitating human interactions and providing them desirable information/results in no time.

5.  Real time spending and tracking

A money management app should help consumers track their expenditure. This feature will come in handy since the users will save both time and money. It is important that the consumers do not have to switch apps to track where they are spending or investing their money, it should be effortlessly done on a single platform.

6.  Simplicity

No one is fond of complex procedures in a money management app because it involves crucial details. You should keep the 3 clicks rule in your head, that is, 3 simple taps should be enough to lead the consumers to wherever they want.

7.  User experience

Most of the developers build an app without focusing on the design. This ultimately leads to the app’s downfall. The balance between app functionality and design is hard to maintain but is a necessity.

The design of  financial planning apps must be extremely user-friendly to better customer satisfaction. To develop an efficient application with amazing user experience, you must know the target audience and where their preferences are. Not only this, you should definitely think as a user.

The user experience of your app will be a deciding factor for the consumers if they want to use it or not. Make sure your personal financial planning app is easy to use and navigate. This will ultimately lead to business growth for your startup. 

8.  Constant customer support

24*7 customer support is of great importance. Customer support in different languages will get you a global clientele and keep your customers loyal. 

9.  Alerts and notifications

It is one of the most significant features for financial planning apps. Notifications can help consumers in case of:

• More expenditure
• Low balance in the account
• Upcoming bills to be paid
• Great deals for investment or savings

10. Gamification

By adding gamification, you can keep your users engaged. This feature will motivate users to interact with the app more frequently. A gamified money app is an effective and fun application that helps them achieve their saving goals better.

11. Points and rewards

It is essential to motivate the app users from time-to-time and hence offering rewards and points can help in attracting the users. The rewards can be like discounts, coupons, cashback, credits, and more.

12. Financial advice and consultation

With the help of this innovative feature, users can request financial suggestions or advice from the experts in this field. This would help them to learn more about ways in which they can save money and keep track of their expenses. They could also learn about various investment options and learn to maintain a good credit score. 

Here are some advanced features for your personal finance management software.

• Currency converter
• In-app general calculator
• Credit score calculator
• Tax calculator
• Shopping list

I think you might also want to know about the teams involved to build a personal finance application. You think, I deliver! Here you go!

Make sure your financial app development company should have a team of:

• Business analysts
• Product owners and managers
• UI/UX designers
• Developers
• QA testers

Examples of top budget Apps for personal finances

Add logos of budget apps

1. Mint 
2. Acorns 
3. Qapital 
4. Albert 
5. YNAB 

[Related: Top 17 Personal Finance App Ideas For Startups to Consider in 2021]

How to monetize a personal finance app?

It is hard to associate the term “free” with “revenue”, right? Now that you are providing fintech services to your customers, how will you make money? Let’s probe how to earn money from your Fintech app further:

1. In-app purchases: You can allow users to utilize basic features of your app for personal finance for free and you can keep the premium features in the paid version. Premium features can include the advanced version of the basic ones and of course, some new functionalities will always be appreciated by the consumers.
2. Integration with third party services: Grant consumers to use third party services that are relatable to your business. This will expand the usability, functionality and audience of your app simultaneously.
3. In-app ads: Earning money through in-app ads is the easiest way to make money! However, my suggestion to you is, make sure that too many banners don’t pop-up too frequently in your app for personal finance. That is just a huge turn-off for the user. 

End note

We hope that this article was helpful in understanding what is personal finance, how to build a personal finance app and the rising demand for personal finance software development in the market. Now, you have a basic idea about how to build an app with key features and monetize it. So, if you have an idea and want to conquer the market with it, reach out to a financial software development company to build it. It is the right time to hire a development team of agile ninjas and skilled financial app developers and designers to bring your idea to life.

The post How to Build an Effective Personal Finance Application appeared first on Appinventiv.

Going by the simple formula that monetary transactions is something that customers would need irrespective of what the economic condition is, the sector has made itself recession proof and in turn investment friendly. It continues to become an inevitable part of the economy with the involvement of next-gen technologies in its offering set and the customer experience it offers acting as the benefits in Fintech through digital technologies. 

In this article, we are going to look into the important Fintech sectors for investment. 

Fintech Business Models That Investors are Betting on for Their Fintech revenue model

1.  Insurtech

According to a PWC report, insurance companies are aware of the Fintech era. There are enough reasons to believe that the insurance sector is heading towards digitalization through mobile apps.

Venture capitalists who feel that the insurance industry is ripe for disruption and to be a part of the future of finance have started exploring investment opportunities in avenues like social insurances, ultra customizable policies, dynamic pricing based on the new streams of data coming in from the internet-based devices. Going by the trend which is placing Insurtech in the forefront of the positive impact of Fintech on startups, it is one of the best Fintech sectors for investors.

2.  Digital Share Broker 

An increased volatility in the share prices have brought a number of new investors in the market. This newfound interest that the share market is getting is a sign of a new culture which needs a platform to understand the basics and perform stock trading in a less risky manner. 

This is the reason why brands like Freetrade and Robinhood stock trading app are constantly getting attention from the investors, while similar brands like Numbrs are getting funded and becoming unicorns.

3.  Cross-border Payments

Although there has been a slight decline in the amount of foreign exchange payments because of cross-border trade limitations that have come into existence because of the COVID-19 rise, it would return.  

Meaning, future-centric investors will start backing promising foreign exchange payment companies today. This rise will also bring a demand for greater adoption of cryptocurrencies specific solutions that further eliminates the issues attached with cross-border payments. 

4.  RegTech 

The one factor that has been keeping the Fintech domain from achieving mass adoption is the presence of a number of regulations and compliances. By the time you understand how to develop a PCI compliant app, you will be asked to follow multiple other policies. 

To solve this issue, the sector is constantly finding new ways for improving regulatory compliances. Here are some of the offerings:

• KYC & AML solutions
• Data management solutions
• Tax management solutions 
• Trade monitoring solutions
• Portfolio risk management solutions
• Regulatory change management solutions, etc.   

Making this expansion possible are the investors backing the RegTech domain. 2015 started with 149 RegTech deals which totaled to $1.1. Billion valuation. The number then increased to 317 deals which amounted to $8.5 billions in 2019. These numbers have also been the reason why the domain is one of the key finance app domains that entrepreneurs are looking to enter. 

5.  Digital Operating Platform

There is a continuous need for operating platforms which would help bring down the cost and better the efficiency of wealth management, banking, and insurance. In an ode to faster digital transformation, these sectors are looking for ready-made solutions which they can incorporate in their existing systems. Investors too will like to back such solution providers who have a deep inclination towards cloud based operating ecosystems. 

6.  Online Payment Processing  

When we talk about online payment processing solutions, we talk about companies that give the infrastructure needed for processing payments and transferring money from one consumer to another. 

The domain is so lucrative that four out of eight renowned Fintech companies fall in this category – Ant Official, Stripe, Klarna, and Adyen. 

7.  Savings and Budgeting Apps

The current crisis has redefined how we calculated savings, investments, and buying amounts. It has become extremely important to stack emergency funds while allocating funds in other important spending areas. 

Customers, for acing this changed formula of budget management have started using applications like Cleo. And the industry has started seeing it as one of the best Fintech sectors for Fintech investors. 

8.  Peer-to-peer lending Solutions 

It is one of those sectors which directly hits the big financial institutions by targeting their most profitable domain – loans. Peer-to-peer lending, as they are commonly called, is an alternate form of finance which connects individuals or entrepreneurs with potential investors.

The chances of getting approved is much higher than banks while the interest rate is also much less. The solutions are aimed at fueling innovation and growth by giving the small businesses the funding which they need for getting projects off ground.

Some of the popular names in this sector include – LendingClub, Lufax,  ComonBond, Jimubox, Prosper, Funding Circle etc.

9.  Fraud Analysis Software 

Fintech businesses focused on anti-fraud and security with the help of Machine Learning and Artificial Intelligence for finding patterns in the financial transactions which indicate high fraud risk is what the investors are also paying attention to. 

Investors have started putting their money behind Fintech companies that offer fraud and security analysis as their service suite. 

Two companies that are offering the service impeccably are: Featurespace and Brighterion. 

Reasons That Make Fintech a Good Investment Avenue 

1. Fiat currency is becoming digital

If you look back at how your spendings has changed in the last decade, you will notice the shift in how you conduct transactions and how the majority of your transactions have become cashless through the mode of digital payments in Fintech. Whether it is using PayPass for paying for coffee or using online banking for sending money to friends and family, cash has slowly started becoming a thing of the past.

While on one hand, Fintech companies rely on this shift to keep their platforms in demand, on the other hand, users and investors love the conveniences that this shift offers. And both the reasons are enough for digital payments to become one of the best Fintech sectors to invest in.

2.  Data has become the new oil

Fintech brands tend to gather a huge amount of data related to consumers’ spending habits. When used strategically, this data can be applied for filling all the different loopholes present in the traditional financial services.

The one area where it can be most used is bettering the customer experience. It can be used to guide customers on the amount they should spend, save, and invest.

3.  Your mobile is your wallet

The time when you had to carry a physical wallet for storing your money is long gone. You can now save your card and bank details in your phone and make payment for goods and services in almost every retail house and service based agencies.

Fintech companies have been at the forefront of this drastic shift towards a wallet-less and cashless world. The mobile wallet applications brands make use of all the right technologies which are needed to make payments efficient and give a great experience to the users – something that innovation is designed for.

4.  The social impact

Fintech app development companies hold the power to serve millions of people around the globe – even in locations which are unbanked. They offer services which change the way businesses are conducted. By bringing transactions on a non-fiat mode, they have the ability to eliminate the black money circulation. These fintech application development companies also help governments gather taxes, facilitate credit to individuals and businesses in the developing nations. This is also the number one reason why investment in Fintech is on a rise by socially conscious brands.

5.  Fintech industry acquirers tend to have deep pockets

A prime characteristic of the Fintech domain is that the Fintech companies’ competitors tend to have deep pockets. The competitors are mainly companies like Mastercard or Visa or banking institutions who look for acquisition opportunities for maintaining their market share or expanding their reach.

The availability of readily-accessible capital in the Fintech domain from such competitors also makes it an industry which is favorable for M&A activity.

The pointers above are a definite sign of why it is the right time to invest in Fintech mobile app development and why to partner with a financial software development company. But having this intention is not enough. It is also mandatory that you know the best fintech sector investment strategies. There are a number of models that have emerged in financial services consulting but only a few limited ones have emerged as the most profitable Fintech sectors to invest in.

Now that we have peeked into the Fintech landscape in 2021 and beyond and which factors are contributing to the maturing of the Fintech sector on investment grounds, let us on a concluding note, look into the Fintech investment trends in Fintech industry that will be active this year and for some time to come.

Fintech Investments Trends 2021 

1. Bigger and bolder deals

With the investors growing focus on late-stage Fintechs, the deal sizes are bound to grow manifold. In the time to come, high conviction deals that are focused on companies backed by proven business models will be on a rise. We are also bound to see investors attention shifting to companies that hold expertise in multiple sub-domains.

2. Deals happening in diverse locations

In the time to come, we will see Fintech deals happening in geographical locations that are different from the jurisdictions that fall outside of the traditional markets like the US or Australia, UK. The locations where a high investment activity is expected are: Latin America, Southeast Asia, and Africa.

3. Inclusion of Big Tech Giants 

Through the mode of Google Pay and Apple Card, tech giants like Google and Apple have already started establishing their foothold in the Fintech space. These tech giants in addition to brands like Tencent, Ant, and Alibaba will continue to target developing nations – by directly entering the segment or by forming strategic alliances. 

4. Big Fintechs Will Invest in New/Early-stage Startups 

In order to extend their reach in the future of Finance, established Fintech software development company will start investing in emerging Fintech brands and Fintech software development services. The reason behind this would vary from augmenting their capabilities to getting access to skilled talents quickly.

5. Continued Partnerships

The formation of partnerships would continue to grow between new Fintech companies and big tech players and between traditional companies and Fintechs. These will likely be heavily customer focused and geared towards the creation of more value and greater scalability. 

6. Financial Services’ Re-bundling 

In the last decade, we could only imagine interacting with 1 to 2 financial products. But today, the number has increased to 5-10. The burden of managing these unrelated services has fallen upon the customers and we are not taking it well. This has led to a demand for platforms that would address almost all our financial needs in one place. 

7. Greater Focus on Cybersecurity Products 

The attention on cybersecurity-focused Fintech companies would increase as the traditional financial institutes will shift their focus from building the services from ground up to buying them. 

Final Note

All in all, the Fintech sector has a great potential which is why investors are getting attracted towards it. One of the greatest benefits that this sector offers is that it allows small players to compete in the same field as traditional banks and financial institutions. If you are looking for a reliable fintech app development company in USA, then you can contact us here, and our experts and fintech app developers will gladly help you with the solutions.

The post 9 Fintech Sectors That Are Attracting Investors’ Attention appeared first on Appinventiv.

It has been more than a decade since the Fintech revolution came into existence, fuelled by the great financial crash. But everytime the banking circles of New York or London are told that a new Fintech startup (financial software development company) is emerging to eat up their lunch, their reaction is the same smirked “will see”. 

And let’s be honest. Their smirkness birthed by the belief of how difficult it is for Fintech to push them out of business is not a castle in the sky. Even after a decade of their existence, the validity of fintech’s capability to reach heights in the global finance domain is unestablished. There are still no Fintech companies in the Fortune 500 or S&P 500 list. This has kept the industry several steps behind in the banks vs growing Fintech startups comparison. But this can end, once you know how to prepare your fintech startups from not falling.

While there is one thing guaranteed for this year – banks are irreplaceable. But what the Fintech domain must be accoladed for is the continuously rising user adoption rates and all the investments in successful Fintech Sectors it is attracting. Thanks to the digital transformation that is accelerating the change in fintech industry. 

What Are Fintech Startups?

The combination of finance and technology gives “financial technology,” which refers to any business that makes use of new technology to enhance or automate financial services and processes. The term is vast and the industry is swiftly growing, serving both consumers and businesses. 

The number of fintech organizations mushrooming worldwide is shocking. For instance, as per Statistica, in February 2020 in the US, 8,775 startups in fintech were enrolled. In a similar period, there were 7,385 startups in Europe, the Middle East, and Africa, followed by 4,765 in the Asia Pacific region.

The idea of starting up a business which revolves around fintech (financial technology) implies fintech startups.

What Does a Fintech Company Do?

In a nutshell, fintech software development companies make financial services more accessible to the public. These services involve financial transactions processes like saving, investing, and loan processing, among others. And it also encompasses revolutionary financial technologies like blockchain and cryptocurrency.

How do Fintech Companies Work?

Fintech organizations focus on improved speed of service and transactions, a simpler and more charming user experience; and estimating that reduces down on your expenses.

A fintech is both a tech and a finance organization working together. They generally contain a group of designers and developers on one side and market specialists, financial experts and other knowledgeable groups on the other side.

As traditional finance has consistently been monopolized by a small group of banks, it has consistently been to their greatest advantage to keep financial service processes intricate and hard to understand, with an absence of transparency and high pricing.

The adoption and the blessed hand of investors have together charted a Fintech market growth which is poised to be worth US$26.5 trillion in 2022, with a 6% CAGR. 

The fintech app development trends added with technology adoption like IoT in Finance and Blockchain in Finance have given rise to a number of new use cases which are being explored by the domain, globally. 

Another thing which has brought about this rise in trends is the growing user adoption rate. There are many things that the world loves about the Fintech domain, here are some of the main reasons behind the users’ side of Fintech market growth – 

On a different, unpredicted note, fintech app solutions are embedded with some key business lessons for modern-day entrepreneurs. These lessons from start up Fintech are a result of their efforts taken to revolutionize how financial transactions are conducted – in a way that is completely different from the traditional approaches. And how they are behind a long list of problems solved by financial applications.

Reasons Why Fintech Mobile Apps Are Role Models for Any Industry

1.  A focus on user-friendliness = The shortcut to success

There are very few people who like doing finances. Majority of us find financing boring, confusing, or simply complex. Fintech apps, going by the standard that has been set by the likes of top financial software development company such as PayPal and Robinhood etc follow Steve Jobs’s definition of a good UX principle to its exactness.

“Design is not just what it looks like and feels like. Design is how it works.”

Simplicity and a clear consumer understanding lies at the center of Fintech applications. The interfaces, as you would see in most instances are uncluttered, clear, and display what the users expect. For conveying information a lot more vividly, they even use functional animations and the core applications of minimalism. At the back of this functionality, a Fintech brand, Numbrs raised $40 million funds making it a unicorn.

2.  Giving fintech business solutions to customers’ problems is the direct path to customer loyalty 

No matter which Fintech app you pick, you will find them fulfilling one core purpose. It can be anything from helping customers set a budget through a Cleo like app and send money to their friends using PayPal to making investment easy through Robinhood application. 

What has worked for the best Fintech companies is knowing their customers – the events where they would trust a third party application and ones where they will want to limit their interactions with their bank’s application. 

The other thing which all the business models of fintech companies follow is knowing the problems associated with traditional banks: delayed transfers, high transaction fees, and some other key mobile banking limitations. An approach that offers them insight is the product design sprint. The sprint which is conducted mostly in the span of 5 days helps businesses with validating an app idea on the front of feasibility and users preferences by including the actual prospective users in the mix.

3.  Use of Interactive Elements is what your users need. Heck! what your business needs. 

A good percent of the Fintech user base is made of millennials and the Gen Z. And, unlike a number of digital sectors, they know how to keep the user engaged.  

In order to prolong users’ time inside the application, the Fintech app developers don’t shy away from putting in unconventional in-app elements in the mode of games, contests, etc. the intent that they aim to follow is also around educating their users about the new product launches or features’ additions. In return, the users generally receive rewards which can be both intangible – low interest rates, subscription, and discounts or tangible things like gadgets or event tickets.

4.  Correct Application of Voice Assistants & Chatbots is how you open business to the never-sleeping Gen Z

Chatbots are known to change a business’s growth story. This is something that almost every sector knows but very few apply in their business process. Fintech is not a part of the latter. 

The chatbot’s specific answer to how does Fintech work lies in using bots for serving a plethora of functions, while not shying away from making their brand a part of leading virtual assistants like Google Home and Siri, Amazon Alexa. 

Here are some use cases of how the domain employs voice assistants and chatbots to expand their reach in the sector – 

From checking the account balance to paying the utility bills and reviewing transaction history, the 24*7 nature of voice assistants and chatbots are being enjoyed by the Fintech consumers to a much greater extent compared to other domains. There are some sophisticated chatbots like Bank of America’s Erica, which sends users notification about their bill payment date, warns them of low balance, and offers extensive proactive financial guidance.

5.  Complete Inclusion which makes Fintech solutions available to everyone on a mass scale

There are two elements which together play a role in making Fintech available to all:

1. Greater audience coverage – even after the onset of several banks being made operational across the world, the number of unbanked people are in millions. And just like people, there are many small and medium enterprises which are underbanked and unbanked, meaning they don’t have enough access to the online banking processes. The adoption of Fintech solutions makes it easier for the unbanked SMEs to conduct their financial business.
2. Omni-channel benefits – in addition to mass inclusion, the Fintech solutions also care a lot about reach. By making the solution accessible from email, messages, social media, and even home assistants, Fintech solutions take the abilities of omni-channel to the next level and with them, the uses of Fintech.

For an entrepreneur, one of the important lessons from a financial technology startup can be to offer a service that answers to a number of people and is accessible through multiple channels. These two events are more or less the solutions to take your business growth forward. 

6.  Fintech Solutions are the examples of Agile development methods done right

The domain is a constant recipient of integration of technologies in finance, new functionality expectations, and user demands. In this scenario, the only way to be truly a leader in the domain, it is important for the domain to be agile. 

By being agile, the Fintech industry is able to update its offering in a very short turnaround time – something that always keeps it several steps ahead of banks. 

In fact, the principles of Agile development methods have also taught the domain how important it is to solve customers’ concerns in real-time. A doing of this understanding has been the onset of multiple support options such as Slack, Telegram, 24/7 online chats, which prioritize client requirements. 

7.  Greater Transparency brought about to end the era of closed banking systems 

Banks and other traditional financial institutions are known to hide data and not reveal financial information which the customers need to know. 

Every Fintech software development company realizes this gap. This is why the majority of these solutions are made on open APIs, third-party connections, and modular structures. Also, almost all the Fintech apps are very open and transparent about their services – how they collect data, what they do with the data, their transaction charges, etc. 

Upto this point, we have looked into the different learnings that entrepreneurs belonging to ANY industry can draw from Fintech business models. 

But we know that everything you read till now is nothing but farce to you. 

Trust me, we know. We have worked with more than 850 clients and the one common language that they understand is that of examples. And even better – Live Examples. 

Some Top Fintech Companies Offering Their Two Cents To the Business World 

1. Funding Circle

The UK based Fintech unicorn is a classic name in the Fintech growth strategy. It is a peer-to-peer lending marketplace which brings investors and small businesses together. Their Fintech startup ideas? To replace the traditional lending systems. 

In addition to an amazing user interface, their modus operandi of making services transparent by detailing loan formalities and giving investors the option to talk to business owners is what separates them. 

Moral: Founders of Funding Circle approached a real issue which a HUGE number of small businesses face. They approached it with a customer-first medium and offered a transparent way of getting loans straight from the investors. 

2. Acorns 

The application with over 3 million users automatically invests the spare change left to users after their everyday purchase. Their idea? Simplifying investing and inculcating the habit in the users by passing them educational content. The finance knowledge that they were offering through the software, turned their customers into smart investors. 

Moral: The application makes users grow and become more confident in their investment choices. By giving them the ladder to become more financially sound, they show that they care for not just their users’ subscriptions but also their well-being.

3. Coinbase 

The American company allows its users to buy and sell cryptocurrencies. In 2017, having bagged $100 million in a Series D funding, the company became a Fintech unicorn and around the same time, they became one of the most downloaded applications on the App Store. Their idea? To launch a new finance model in the world. Since the product was based on Blockchain – a new kid on the block – the company knew that they would have to focus a lot on regulations and security compliances from the very beginning. 

Moral: When you show your unwavering focus on regulatory compliances and security, you can gain customers’ trust which can ultimately make you one of the most famous crypto asset exchanges in the world. 

Parting Thoughts

The expansion of Fintech apps is a textbook of use cases. There are a number of things that the domain is doing right. The things that are answering why Fintech for business are popular. There are also some things that they are yet to learn. Many challenges for financial startups are yet to bloom, but what is keeping them afloat and rising is the willingness to be agile and forward moving. Isn’t this what every industry and every entrepreneur needs?

The end result of this expansion of Fintech apps and whatever lessons from financial startups that other industries have gathered, has been of the sector being adopted by some of most high economy countries.

If you are looking for reliable fintech app development services in USA, then you can contact us here, and our experts will gladly help you with the solutions.

The post 7 Valuable Business Lessons That Fintech Startups Can Teach You appeared first on Appinventiv.

With a multitude of mobile wallet apps, m-commerce apps, cryptocurrency platforms, peer-to-peer payment apps at our disposal, Fintech is significantly changing how we deal with money on a daily basis. 

The awareness of digital payment methods to increase mobile app engagement has grown steadily. With a steep rise in demand for hassle-free payments for goods and services, more and more consumers are moving towards digital payment solutions and opting for mobile user retention strategies for frequent routine transactions.

Table of Contents:

Moving to Mobile

Future of Mobile Payment Applications

What is User Retention?

Ways to Improve User Retention

Importance of User Experience

Bottomline

Moving to Mobile 

Amidst the Covid-19 global pandemic, perception of cash as a carrier for Coronavirus may alter the way consumers choose to pay in person. The Coronavirus outbreak is causing people second thoughts on reaching for cash, making a coronavirus impact on finance industries and sectors a blessing in disguise. 

The concern over the spread of the virus could possibly introduce mobile payments to those, who otherwise would not have seen the appeal. Contactless payments have emerged as a new choice for customers who are far more mindful of what they are touching.

This can also be seen as an opportunity to go digital. The Covid-19 crisis have encouraged people to make use of all forms of digital financial services and make them the norm for tomorrow.

The Future of Mobile Payment Applications

The use of mobile payments saw a consistent growth in recent years. The digital payment industry is projected to grow at a CAGR of 33.8% from 2017 to 2023. It is expected to hit a market size of $4,574 billion by 2023, and the mobile payment app sector is significantly contributing to it.

In India, demonetization provided the much-needed impetus to digital payments, including mobile payment wallet transactions. While global market leaders in the Fintech landscape are PayPal, Amazon Pay, Google Pay, Apple Pay, players like Paytm, MobiKwik, Freecharge, and PhonePe are scaling new heights in the Indian market.

A quick detour: List of Top 7 most frequently used mobile payment apps 

• According to Statista, in 2021, more than four out of 10 U.S. smartphone users had used a contactless payment at least once.
  
• As per Mordor Intelligence, the mobile payments market value is expected to reach USD 5399.6 billion by 2026 from USD 1449.56 billion in 2020 and grow at a CAGR of 24.5% over the forecast period (2021 – 2026).
  
• As per various reports, Alipay is the world’s biggest mobile payment platform with more than 1.2 billion daily active users.
  
  
• According to a new research published by deVere Group, the Coronavirus has accelerated a huge 72 percent rise in the usage of fintech apps in Europe.
  
  
• At a time when most sectors of the global economy are starting to feel the impact of what could already be a global recession, the dramatic leap in the acceptance and usage of apps comes as a good news for the fintech industry.
  
  

• Mobile payment apps based on modern business models could impact up to 80 percent of established banking revenue by 2020, as per a report released by Accenture. 

As users are steadily moving towards the use of payment apps for day-to-day transactions, the need is to lay emphasis on providing a seamless payment experience and mobile app engagement to your customers.

What Exactly is User Retention?

User retention, in the simplest sense, implies bringing users back to your app. While App store optimization, paid advertisements, influencer marketing and a variety of other user acquisition strategies can bring new users to your application, the real deal is keeping them meaningfully engaged and retaining them. 

Retention is calculated by comparing the number of users at the start of a certain period with the number of users at the end of that period. 

Retention for mobile apps is notoriously poor and that keeps getting worse. Only 32% of users launched an app over 11 times in 2019. That’s down from 38% in 2018.

Retention Over Acquisition

User acquisition is obviously important. In order to expand you have to add new users every month. Yet in most cases, businesses put so much focus on acquisition over app retention. 

The user abandonment rate, which means that the user has removed the app right after one use is 23 percent. Furthermore, if the user has not opened your app once in 7 days post-installation, then the chances of uninstallation are 60%.

But if you have a robust payment app with an effective mobile app user retention plan then, becomes easy to keep users engaged, active, and profitable over the long term.

Tactics to Improve User Retention on your Payment App 

Once you have started your app, the very question that comes to mind is- how to increase retention? Mentioned below are some mobile app retention strategies that will help you significantly improve engagement and app user retention for payment apps. It can help businesses lower the churn rate and see the desired results and ROI that they expect from their fintech application development investment while improving mobile app engagement strategy for payment app.

1.  A Perfect First Time User Experience (FTUX)

A great on-boarding experience can improve user acquisition by 7x. A perfect on-boarding experience gives users their first Aha! Moment and lays the foundation for greater user acceptance. This gets them to perform critical actions quickly, such as registration, adding money, or using the app for payments. 

The key is to consider the best mobile app onboarding practices, especially making the process as simple and intuitive as possible. The harder it gets to continue using an app, the more likely it is for users to abandon it. 

Mentioned below are some steps that can help you simplify the onboarding process:

• Reduce the number of steps required to build an account or sign up, and have multiple registration options (for example, login with Facebook or Google). 
• Demonstrate the features of the app during the onboarding process, but don’t overwhelm users immediately. 
• Send attractive push notifications urging users to register, post  24-48 hours of app download, if they have not already. Encourage sign-up through offers and coupon codes. 
• Welcome users to the app with personalized in-app updates after they have registered. Encourage them to add money to their wallet, use the app to transact, or highlight the main features to get them started quickly. 

A significant metric to track is the time that users take to register and sign-in to your app. This will give you feedback on the effectiveness of the onboarding process. 

Showing immediate value can help new consumers turn into loyalists and brand supporters. Onboarded customers who see an immediate value in your product are more likely to stay active, transact more, and create long-term brand loyalty to help your app achieve sustainable growth. 

2.  Keep Users Meaningfully Engaged 

Successfully onboarded users are likely to stick to your app, use it for purchases on a daily basis and remain engaged when they see the value. It is quite important to keep the users meaningfully engaged for sustainable revenue growth and brand building, not just in the initial process, but continuously throughout. 

To increase app engagement for payment apps, follow the below-mentioned steps: 

• Diligently tracking app usage trends empowers you with useful data. 
• Personalized app user engagement campaigns cultivate the relationship between your brand and your customers and drive repeat purchases. This sets the basis for app success in the long term. 
• Use user-specific behavioral insights to drive tailored in-app notifications and push strategies. 
• Keep reminding users to reload their wallets, complete their profiles, add new features, benefits and reward them for their loyalty, with vouchers, cashback etc. By providing compelling deals on the services and features that they use the most, you can improve customer relationships. 

Drop-offs when adding money to the digital wallet and leaving the cart may be early signs of a user who is about to churn. This makes it important to engage with users timely. 

3. Retain Users Before They Churn 

An app ‘stickiness’ refers to the amount of users who are engaging with a product or feature. The higher the stickiness quotient for your product, the more often your active monthly users return to the app. 

Churn refers to the problem where a user stops seeing value in your app and stops using it within a period of time. Studies suggest that a drop in activity, for instance, the number of transactions or addition of money to the digital payment app is a sign of churn. Inactive users or dormant users are highly likely to uninstall the app. 

The smart thing to do when you witness churn rates is to regularly monitor the behavioral pattern of your users and re-engage proactively with these users at-risk. By monitoring churn, tracking trends, and interacting proactively with at-risk user groups, you can remind users of the value that your app offers and increase long-term app retention. 

Use mobile app retention and engagement strategy for payment apps to target these users and pique their interest back into the app by offering substantial value. Engage users with timely and personalized in-app updates and push notifications that prompt them to relaunch the app, encourage them to take advantage of discounts and cashback deals, and urge them to transact more with their favorite merchants. 

• Cohort Analysis helps in monitoring app retention rates for different segments. 
• RFM analysis.is another important analytical tool for distinguishing different user segments based on the level of risk. 
• Asking for feedback is also an effective way to show your users that you value them and their opinion. 

4.  Retarget Churned Users

Users abandon an app when they stop seeing value. While it’s a bitter truth that some users will churn, you should retarget those users to get them back to your product. Restore the relationship with users by reviving their confidence and trust in your app. 

The reasons for uninstall can vary, from issues with the UI, features, efficiency or user experience. Yet tracking uninstall rates and asking for input from uninstalled users can provide you with useful insights into the user experience and tell you what you can do to avoid potential uninstalls.

• Re-engage users who have gone inactive by posting “we miss you” or “here’s what you are missing ” themed push notifications.  
• You can send promotional emails to win back uninstalled users or initiate remarketing promotions to accelerate app reinstallations. Track the campaign ROI by measuring reinstall rates. 
• The key is to retain and re-engage users with lasting experiences. Render an experience that people care about. Give them timely reminders for payment of utility bills and run personalized campaigns to drive repeat purchases, aimed at improving loyalty and long-term retention.

5. Two Way Communication

For your brand to be consumer friendly, users need to build relations with brands, they need to feel valued and appreciated. This is the reason opening a line for two-way communication is critical. To understand and know what your users want, you need to take their feedback. The replies and feedbacks help application to accumulate responses, tackle customer issues, and further develop product usefulness after some time.

The additional advantage of having a two way communication with users is being able to hear about the issues before any negative comment is posted in an app store. This permits you to work on the issue and develop a relationship before it influences future downloads. Showing responsiveness and resolving any inquiries or concerns will support the engagement and app retention rates, encourage positive reviews, and construct long-term brand loyalty.

Organizations ought to understand that users involved with natural application engagement are bound to remain than imposing your application on the users. For sustainable revenue development, it is necessary that your targeted customers meaningfully draw in with your digital payment application. To retain customers you need to:

• Cultivate personalized mobile user engagement app campaigns by tracking the app usage trends through the available data.
  
  
• The push notification technology will help in the above procedure and encourage the customers to repeat their purchases.
  
  
• Reminders about completing the user profile, updating wallet, benefits that the app will provide, etc. will keep the user on their toes and loyal to your app.

Importance of User Experience

It is extremely crucial to consistently deliver a superior customer experience through behavior-based, hyper-personalized, and contextual marketing for sustainable sales and business growth of your payment app. 

If you believe that user acquisition is the key metric for assessing an application’s performance, let me tell you high download rates do not yield any business benefit without active users.

Brands invest massive amounts of money acquiring users; however, that is just the tip of the iceberg. The real value lies in engaging and retaining your users in the long run. 

Mobile app engagement and mobile app retention rate are the two defining metrics that provide real insight into an application’s success. 

However, achieving a sufficient mobile app engagement and app user retention rate is not an easy task. 

Statista reports that after downloading, only 32 percent of users will return to an app 11 times or more. What is even more eye-opening is that 25 percent of users abandon an app only after one use. 

Greater engagement and app retention result in more active and loyal app users. Infact, a 10% increase in app user retention can increase the value of a business by more than 30%.

Bottomline

Mobile payment apps are constantly growing and becoming the leading payment channel.  With various user retention strategies, we are witnessing a new wave of disruption fuelled by leading FinTech players. 

Besides creating a secure and robust FinTech app, in order to turn your app into the primary wallet for your users, you need to provide them with a compelling user experience after proper ux review that benefits them at every stage of the user lifecycle-from acquisition to mobile app retention, for online as well as offline transactions.

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