Getting customers is easy. Keeping them is the real challenge. For fintech startups, customer retention is an uphill battle, as competition gets more challenging every week.
73% of new Fintech users churn inside the first seven days. People expect speed, convenience, and personalization at the touch of a button. If you can’t give customers what they want, they’ll simply swipe left and find a better fit.
And so, while fintech companies may set their sights on unicorn status and hockey-stick growth, those lofty goals will remain a distant dream unless they improve customer retention and product adoption.
Read on as we reveal the big problems the fintech sector faces when retaining customers and give you the steps to devise a customer-focused onboarding process that makes people want to stay with your app.
3 customer retention problems the Fintech sector must conquer
Global fintech adoption hit 64% in 2020, with 96% of consumers aware of at least one fintech payment company. Sounds promising, right?
Unfortunately, when you dig beneath the big guns, like Revolut, SoFi, and Stripe, the truth is laid bare. Many smaller fintech apps have high download figures but that masks the fact that most user engagement dwindles within weeks. If you can’t translate initial interest into long-term activity, product adoption won’t happen.
Here are three reasons why the fintech sector struggles with this problem:
Overestimating the customer’s ability to self-educate
Unfortunately, many companies make the mistake of assuming customers will figure out how to use their apps easily. Even digital natives like millennials and Gen-Z might hit the ground running, but many people still will need some guidance.
If you go heavy on marketing and sales but don't follow up with customer service, your customers will be left confused about how to get the most out of your app. If they can't get answers, they'll simply delete the app and try a competitor.
Overdependence on in-house customer support
Some business owners worry about losing ideas or sharing sensitive data with people outside the company. But if you rely only on your internal team for customer service, you run the risk of having long ticket queues, longer resolution times, and overwhelmed staff.
In the end, productivity and job satisfaction slump, and customer churn increases because of the substandard service. And when that happens, people might get mad, which brings us to our next point.
Losing the human touch
Disruptive technologies like artificial intelligence and blockchain are driving the digitization of banking and investing. But all too often, fintechs get obsessed with technology, and personalization suffers. When you hide behind FAQ pages and bots, you risk losing customers' trust.
After the GameStop crisis in early 2021, Robinhood put restrictions on the buy-side of some trades. While the company claimed this was a move to increase capital requirements, lawmakers and app users accused the company of protecting hedge funds.
With users suddenly locked out of their accounts, and no way of getting in touch with customer service, they took to the streets. Some customers drove to the startup’s HQ in California, leading to acts of vandalism, including someone throwing dog feces at the door. (yes, really!)
7 ways fintech companies can build trust in onboarding
Six months after Robinhood seemingly robbed from the poor and gave to themselves, the company launched its IPO—and quickly learned that people are still mad. Within minutes, the stock tumbled 12% and closing out the day as one of the worst stock debuts ever for a US firm that size.
So, how can you stop the proverbial dog dirt from hitting the door of your fintech startup?
The simple answer is to focus on providing a better customer experience from the moment people download your app. In turn, this dedication to doing more for your users will foster the trust you need to keep customers.
Here are seven ways customer-focused onboarding can help your fintech reduce churn and build loyalty:
1. Offer value upfront with a free trial
Let people toy around with a trial version of your app, giving them a sense of what it can do. You can gate access to the advanced features, giving them just enough to stir up curiosity and desire. This free offer allows you to demonstrate the app’s value without asking for anything in return.
2. Remove friction with simple forms
Nobody likes wasting time with forms. If your registration form asks for too much, those precious leads will slip off the hook. Simplify the process by using forms that only ask for the bare essentials. Also, make sure you use automation so people can autofill most of the form quickly.
3. Ease security concerns by adding safety precautions
When it comes to money, security is paramount to your customers. People won’t share personal information or financial details if they don’t feel safe. Features like 2FA, automatic log-outs, and purchase notifications assure people they are working with a company that is serious about protecting sensitive data.
4. Earn trust by being transparent
Registering for a fintech account involves a few more hoops than other apps. While this adds friction to the user experience (UX), most people understand the need for extra questions. Take this opportunity to tell people why you need their personal information and how you will use it to improve personalization and their UX. Being transparent will help you earn trust.
5. Establish credibility through regulatory compliance
Knowing your customer is something every company should do in any industry, none more so than in finance. By law, fintech companies must meet a couple of critical regulatory requirements:
- Know Your Customer (KYC) is a set of standards that companies in the financial services industry use to verify customers and assess their risk profiles in order to safeguard against fraud, money laundering, corruption, and terrorist financing. The specific KYC documents required vary depending on the country and user.
- Anti-money laundering (AML) is the regulatory field that includes all policies, legislation, and procedures that attempt to stop money laundering. AML is the broader field that includes KYC.
When you onboard new customers, it's essential to do these checks for your business and to establish credibility and trust with your app users. Make sure your compliance is clear to your customers and if it's not check out this information on the standards for the Single Euro Payments Area (SEPA) from the European Commission.
6. Eliminate frustrations with a seamless omnichannel experience
89% of customers get frustrated because they have to explain the same issue multiple times to different customer service reps. Now, people expect a consistent omnichannel experience where they can transition from email to social media to an app without having to repeat themselves.
As you improve your omnichannel support, you can offer a seamless user experience that makes it easy for people to solve issues instead of causing them stress.
7. Empower users with ongoing education
Onboarding is not a set-and-forget task that ends with a welcome email. Your fintech app will evolve over time, and with every new feature you add, your app becomes more complex. And so, each update brings the customer and your company to a crossroads: will you confuse them or educate them?
When you continue onboarding periodically with a balance of self-serve support features and personalized engagement, you can nurture the customer relationship over time, empowering your users with new knowledge so they can get more value from your app.
While the incredible growth in fintech lures new startups into the fray each week, it's a crowded market where the vast choice of solutions means customers hold all the power.
In the end, trust—not technology—is what will turn download numbers into loyal customers. Remember that your onboarding process isn’t just about opening the door—it’s a chance to roll out the red carpet to make your new customers feel valued. With a customer-focused approach, you can provide value and start building trust immediately.
At FROGED, we specialize in helping SaaS companies engage their customers more. From initial onboarding to support issues, we cover all the bases to help you keep hold of your customers.
Ready to improve customer satisfaction and build long-term customer success? Get in touch with FROGED to improve your onboarding.