Don’t just sit on your App: Why financial services companies need constant innovation to keep up with consumers
In a 2021 survey, ContractIQ found that around 62% of businesses already have their own app or are in the process of developing one. Roughly a third of those businesses use their apps for revenue generation, 1 in 5 use them to build general brand awareness among the public, and 50% use their apps specifically to support and engage their customers directly.
But how effective are these apps? Are they built for the long-term or do they become an expensive drag on a company’s resources as they slowly become outdated and obsolete? Can they keep up with the constantly changing demands of customers in the financial services sector?
Established businesses in the financial services sector are used to keeping up with fast-paced digital change, but in a bid to get the latest trending features rolled out to their customers, many are forgetting to have the “scalability conversation” with their technology partners when it comes to app development. Much like websites and other business assets, an app is never truly “complete”, it should grow, evolve, and continuously complement a business and its customers’ needs.
The need for app differentiation in a customer-centric world
As any fintech CTO will confirm, the goalposts are constantly shifting when it comes to finding the ‘right’ technology to support and engage customers. Take the astronomical rise of so-called ‘open banking’ as an example. The open banking industry is currently experiencing around 24% year-on-year growth and is set to be worth more than £30 billion by 2026. The reason for its popularity among insurers, mortgage providers, investment companies and other finance-focused organisations? It forces banks to give customers the power to share their own financial information with any third-party company that asks for it. This ‘democratisation’ of customer data has led to a boom in new apps and services from money managers and budgeting tools, to apps like Canopy that use an individual’s banking data to help score their ‘financial fitness’ for landlords in the rental market, reducing their dependence on things like credit scores which can often be misleading.
The open banking industry is currently experiencing around 24% year-on-year growth and is set to be worth more than £30 billion by 2026
Less than a decade ago, banks were a closed ecosystem, and this kind of data-sharing would have been inconceivable. Today, the advent of open banking is prompting broadscale innovation in the fintech space, forcing many banks to respond with their own ‘smart money’ apps to keep their customers engaged.
Why is this relevant? Because the financial space is now more connected, more competitive and more customer-centric than at any other point in history, and financial services brands need to bring their A-Game to app design and development if they want to keep up.
Why finance brands can’t just sit on their app
Disruption isn’t easy, but it’s always a force for good for consumers. It forces brands to constantly compete and innovate to provide the best possible levels of service. There’s also a misconception that only start-ups have this struggle, when in fact even the most established financial brands in the world have their work cut out when it comes to trying to stay relevant and competitive in the eyes of customers. In fact, established finance brands might have it more difficult when it comes to app innovation due to the sheer number of start-ups driving new trends. According to Pitchbook, fintech start-ups received $1.1 billion from venture capital investors back in 2009. Last year, amid the disruption of the pandemic, that figure reached a staggering $44.1 billion. The competition is real, and brands both big and small need to work harder than ever to differentiate themselves and offer a customer experience that extends beyond simply providing a service. So where should they begin?
Thinking ‘apps’ on
Finance brands have a unique advantage in that the tools they provide have the potential to become part of people’s everyday lives. But designing and creating a static app, and then only throwing the occasional update, is a sure-fire way of falling behind the curve, leading customers to hit the dreaded ‘uninstall’ button and end their subscription. Apps are the face of a service or business, and the thing customers carry around in their pockets, so it’s vital they provide a fresh and easy customer experience. New features and services should be implemented seamlessly and only add to the experience rather than bloat it. This requires rigorous levels of user testing on a regular basis to ensure that bugs are squashed, and bumps in the user experience are swiftly smoothed out.
But it’s not just user experience finance brands need to think about. These days, app development is often at the very heart of a company’s plan to generate revenue, attract customers and ultimately win sales or subscriptions. Figuring out how to continue monetising an app in a digital landscape that’s constantly changing should be a priority for businesses owners. Take the failed money management app, Birdy, for instance. It attracted tens of thousands of daily users who signed up for free accounts, but the company founders had no real strategy for monetisation through the app. After several attempts at trying to weave in ‘freemium’ features, monetise its data and attract advertisers, it fell flat, and a great opportunity was lost. If Birdy had thought about monetisation and long-term businesses sustainability when it sat down to design its app, it could have been a huge success story.
This is the key thing businesses of all sizes must remember, particularly those that are established and run the risk of becoming complacent: if a business model is based on an app, that app needs to be nurtured as part of an overall business strategy as things begin to scale.
At Vidatec, we believe that long-term technology partnerships and ongoing app development are key to sustaining long-term success. It’s not just about app development or rolling out a new feature, it’s about planning, testing, strategy, optimisation, and delivery. With Vidatec as your partner, you get all of this and more. So, whether you’re a start-up, or you’re an established fintech business looking to engage, support and attract customers, we’re ready to talk. Click here to get in touch.