Financial services have become more affordable and accessible due to the growth of the fintech industry. We can see higher interest rates, inflations, industrial lay-offs, and diminishing consumer confidence. But it will affect the fintech industry in the long run in this macroeconomic environment. The key revenue driver is the digital product.
Customer retention
Organizations will focus more on retaining existing customers during the economic decline. It is challenging and expensive to acquire new customers at this point. It is very significant to understand how many users return to the product.
The fintech apps had high loyalty rates and customer acquisition earlier. The retention rate of fintech apps fell to 16%, while the general app market had 35%. So the main challenge is to find a solution to increase customer loyalty.
There are many options in the market where the average app loses 80% of users within the first three days. To avoid this, organizations should show value to the users immediately in each interaction. It is prevalent for companies and organizations to ship their product to the market. But they have no idea how their customers are leveraging.
It will create frustrating products if the technology is not adopted correctly. A low retention rate is a crucial issue. Financial institutions are investing millions in digital transformation, and the return on investment is highly significant. Fintech companies can build differentiation and long-term durability in the market by leveraging the data for enhanced customer experience. So companies need to find a way to a better retention rate to stand in the market.
Growth by experimentation
But this is where the fintech leaders have to experiment. It helps to understand the initiatives not working well and create opportunities for growth. It will notify to end the projects as early as possible and shift resources to other feasible ones.
If the companies have access to customer behavior data, it will help them understand how customers interact with the products. Proper analysis will show problem areas and the reason for the decline in users. Users with specific financial and demographic features where they have used free products are likely to subscribe. It will lead to upselling of the product.
This is an excellent method of increasing the subscription rate.
Scaling and Simplifying
Companies should keep on investing in their products to cope with new regulations, higher interest rates, or changes in consumer behavior. They should willing to take risks and adopt flexible strategies. Simplicity should be the focus of fintech leaders, and things should not be over complicated.
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
