7 Practical Ways to Improve User Retention in Fintech Applications
Did you know that boosting user retention by just 5% can lead to a 25% increase in profits? Because acquiring new customers is more expensive than retaining the existing base according to studies.
But retaining users in FinTech isn't a box that can be checked easily, as trust is the currency here. People handle their hard-earned money and sensitive financial data; losing that trust is simply not admissible.
Across FinTech, figuring out how to increase retention poses a big challenge, especially if you target young people (Gen Z) who grew up with video games and the internet. There's always intense competition, security concerns, regulatory compliance, and other issues to tackle.
But don't worry; plenty of strategies can be implemented to improve user retention. We have done some research and picked out different ways to improve customer retention and build customer loyalty. Let's dive in!
How to Improve Customer Retention?
1.Create User Personas
User personas are created to help you figure out who your users are and what they are looking for in your product.
It entails a deep dive into quantitative user research and web analytics. By gathering data through interviews, surveys, and analytics to identify user patterns and trends, you can create fictional representations of typical users, known as personas. They have names, ages, occupations, and other relevant details.
By doing so, these personas serve as guides for understanding user behavior, motivations, and interactions with the FinTech platform. With a better understanding of your users, you can solve issues (if any) and tailor your product to satisfy their needs.
2. Personalization is the key
People love it when something is built just for them. So, offer personalized experiences for your FinTech customers.
By analyzing transaction histories, spending patterns, investment choices, and user interactions, you can gain practical insights to tailor your services more effectively.
So, when you make your users feel that your FinTech platform understands them and their financial needs, they are more likely to engage with the platform regularly.
For example, Boost, a Malaysian-based e-wallet platform, experienced significant user growth in aggregate spending between 2020 and 2021. However, managing a large user base of 7 million customers posed challenges in tracking user behavior and marketing effectiveness.
To address this challenge, Boost used a recommendation feature to personalize its app's user experience. Through tracking key metrics such as click, open, and conversion rates, Boost optimized its user content, doubling monthly active users and achieving a fivefold increase in user retention over a 90-day period.
3. Gamification
Gamification in FinTech makes handling money more fun and interactive for your users.
The best part? It keeps users hooked by offering rewards, setting challenges, and encouraging social interaction. Plus, it helps users learn about finances, connect with others, and track their progress towards goals. All these elements make users want to stick around and keep using the platform.
Some gamification elements that can spice up your FinTech platform are:
Daily check-ins: Encourage users to visit your platform daily with incentives like small rewards or helpful tips. This improves engagement.
Share to earn: Reward users for spreading the word about your platform through referrals or social media shares and grow organically.
Scratch cards: Allow users to reveal rewards, discounts, or special offers through interactive scratch cards.
Include learning videos: Financial literacy is the need of the hour. So, incorporate short, informative videos to make learning enjoyable and accessible to users of all levels.
Example:
Mintpro is an insurance app that helps grow or manage insurance businesses. By using the app, one can become a trusted insurance advisor and provide great service for customers.
However, this app suffered from a low volume of transactions, and it incorporated gamification with the help of Flyy, a gamified referral and loyalty rewards platform. The result? Their engagement doubled!
Read the case study here: https://www.theflyy.com/mintpro
4. Make every interaction count with push notifications
Use push notifications wisely to re-engage users because they have the potential to increase retention rates between 125% and 180% in mobile apps. A study done on push notifications exclusively for FinTech apps also shows positive results. It's been found that the CTR of FinTech app push notifications stands at 9% for Android and 6% for iOS users.
So, you can provide value through notifications, such as updates on new features or personalized recommendations.
However, here’s a check: Being transparent and accurate when handling finance-related notifications is crucial. Don't be too noisy by sending irrelevant or too many messages, as it can annoy your users and backfire.
To succeed, personalize each notification to establish a strong connection and gain trust, send them based on opening rates, and avoid spamming. Also, cleverly use in-app automated messages to keep customers interested and increase engagement.
5. Plant the seeds of loyalty with rewards and loyalty programs
Loyalty programs are one of the most powerful tools to improve customer loyalty. Offering discounts, benefits, or deals exclusively for repeat customers makes them feel appreciated and encourages them to keep using the service and return for more.
Example: utu, a Thai-based FinTech company that handles tax-free shopping worldwide, has gained momentum with its rewards program.
They let their members earn points through various activities, such as watching videos, connecting debit or credit cards with the mobile app, or simply participating in running competitions. This approach has improved their customer engagement.
Another example is CitiBank's 'Citi ThankYou Rewards.' This loyalty program allows members to earn points for transactions done via online shopping, personal loans, bill payments, etc. Since they also allow members to use their points to share with other loyalty program members, the community-based approach has gotten the most referrals and engagement.
6. Make getting feedback fun and regularly improve
You are more likely to receive fewer responses for feedback and suggestions if asked bluntly. But how about making giving feedback more fun for customers with game elements?
Gamification helps customers give genuine opinions and suggestions. For example, you can create interactive surveys with progress bars, achievement badges, or even reward points for providing feedback. This not only encourages active participation but also more authentic responses.
Your job doesn't end with receiving suggestions. It's highly important to be responsive to inputs and make regular updates to address issues and introduce new features.
7. Nail the user experience with exceptional customer service
Let's say a customer named Sarah, using your mobile banking app, notices a significant transfer isn't reflected in her account, and she's concerned because it's an urgent expense. She pings your customer support, but it took you ages to reply.
Scenarios like this can seriously lead to unhappy customers and affect your reputation. This is why top-notch customer support is vital for customer retention. It's best to offer multiple channels for support, including chat, email, and phone, providing prompt and helpful responses and proactively addressing customer issues.
Good customer support can turn a potentially negative experience into a positive one, increasing customer retention and loyalty.
How Do You Calculate User Retention?
Retention rates are measured over a specific period, such as 30 days, 60 days, or 90 days.
Calculate the monthly retention rate using this formula:
Retention rate formula:
Retention Rate = (Number of users at the end of a period / Number of users at the start of a period) x 100
Determine the number of users at the start of the month.
Determine the number of users at the end of the month.
Add the numbers to the formula to calculate the retention rate.
Multiply the result by 100 to express it as a percentage.
For example, if you start with 100 customers at the beginning of the month and retain 60 customers by the end of the month, your retention rate is 60%. You can also calculate retention rates for other time periods, including daily, weekly, quarterly, or annually, by adjusting the time frame for the calculation accordingly.
Pro Tip: Keep track of the retention rate to know what features are doing well
Conclusion
If you want to achieve customer retention in FinTech, the mantra is simple. Make your customers feel special, keep them curious, and hook them with gamification elements.
Also, by staying responsive to their needs, you pave the way for lasting engagement and loyalty. In short, to improve user retention, you need to follow a mix of strategies mentioned in this article.
But among them, one of the easiest ways is gamification. Take the first step towards a more engaging user experience by gamifying your platform with Flyy today.
