How the FinTech Industry Won in 2020 and Key Takeaways For Apps in 2021
While all verticals saw an increase in installs, fintech apps posted the best year-on-year growth in 2020 at 51 per cent
The year 2020 was an explosive one for fintech. Between lockdowns that prevented people from getting to a physical bank, forcing them to look for alternatives, and the need for contactless payment options, 2020 was an unexpected boon to fintech apps. While all verticals saw an increase in installs, fintech apps posted the best year-on-year growth in 2020 at 51 per cent, based on Adjust’s Mobile App Trends Report 2021. The growth trend continues as installs for the first half of 2021 registered a 24 per cent increase.
In India, the government has proposed significant support to develop, promote and accelerate digital payments, following a sharp growth in online and contactless payments during the lockdown months. In addition, banks and financial institutions in the country are looking at technology and fintech companies to assist them in moving their digital activities forward, either by investing in the development of technology or directly using the apps as service providers. According to a KPMG report, fintech investments in the country have reached $2.7 billion, listing 2020 as the second-best year for fintech funding for India. At this rate, estimates show that India’s fintech companies have the potential to reach a valuation of $150-160 billion by 2025.
It is easy to attribute these gains to sheer necessity, as people scramble to find new ways to perform basic daily tasks. However, our research finds that much of the growth is likely due in part to the huge adoption rates for trading apps, such as Paytm, Razorpay and Mobikwik. Consumers are beginning to realize the flexibility, connectivity and convenience provided by fintech applications.
Ultimately, this led to an 85 per cent increase in fintech sessions in 2020, compared to 2019, and already up 49 per cent for H1 2021. Sessions grew steadily throughout 2020, with the biggest weeks at the beginning of October (22 per cent above average) and the end of November (24 per cent above average). Another peak took place in the first week of July, which was up 15 per cent.
Fintech seems to have cracked the code on keeping users engaged for the long haul. With the growth in mobile applications, more apps will emerge and compete for users' attention. To be competitive, developers have to be smart, data-driven and should place focus on user experience (UX).
By looking closely into the data, other apps can learn a lot from fintech’s 2020 growth.
The nuances of fintech
Understanding the nuances of a vertical is the key to successfully marketing an app within it. When thinking about fintech it is important to understand how users are likely to use the app. For instance, a neo-bank may not expect a user to check into the app multiple times a day the way a social media app might expect, and it is important to keep this in mind when looking at retention and engagement rates. A trading app may expect users to check in more often to see how their portfolio is performing or to make a trade.
Fintech users are loyal
Fintech apps come out on top of the retention rates with the highest amount of returning users: 18 per cent on day 7 and 12 per cent on day 30. The average user now has 2.5 finance apps installed. Unlike game users, fintech customers are not constantly on the hunt for the next best thing. When they find an app they like, they will stick with it.
To boost a fintech app's retention rate, it will be good to understand how users are behaving in-app, when they are returning and why. By drilling down into these retention rates, app marketers can troubleshoot onboarding issues, ascertain if there is sufficient content to keep users engaged, and test the success of introductory offers or specials.
Within the fintech vertical, it is vital to pay attention to the app’s function and unique selling proposition (USP). A banking app will take a very different approach to bring in users than a payment or trading app. The subtle differences within the sub-verticals can then be capitalized on further to yield impressive results. Companies that target the right users will be able to count on loyalty and lifetime value (LTV), which are fundamental details for app marketers looking to increase their app's retention rates.
User Acquisition opportunities for fintech
User acquisition (UA) marketers are constantly trying to perfect their approach to finding the right users who are likely to stay engaged, retained, and spend within the app.
The highest overall share of paid installs took place in Q1 and Q3 of 2020, wherein there were 0.45 paid installs for every organic install. The numbers were relatively consistent throughout the year, but with a slight dip to 0.39 in Q2. Fintech has a comparably low share of paid installs, with payment slightly higher than banking, hovering from 0.1 to 0.13 and 0.08 to 0.2, respectively.
Overall, Q4 was the most expensive quarter to acquire users at a median of $1.88 per install. Fintech, however, had its most expensive period in Q1, at $1.57, and dropped as low as $0.53 in Q2.
The report also shows that the median number of partners per app hovers at around five for all verticals, increasing to six in Q4 of 2020. The median fintech app works with just three partners, which signifies an opportunity for the fintech vertical to diversify the number of partners it works with to find a new pool of potential users.
Additionally, depending on the application's risk profile, different amounts can be thrown in while waiting for the LTV of acquired users to start returning on investments. By tracking the effective cost per app install (eCPI) marketers can project how long it will take for a user to turn profitable, and figure out the amount of investment and where to allot resources. This is true for all verticals, but fintech apps with their built-in monetization models and loyal users may be able to tolerate more risk.
With the implementation of iOS 14 and app tracking transparency (ATT) in 2021, marketers and even fintech apps need to recalibrate their campaigns. The importance of A/B testing, and deep user understanding to create a well-rounded strategy incorporating highly personalized campaigns, automation, and real-time measurement is more critical than ever before.