10 Statistics on Banking & Finance App’s User Engagement

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Long before the pandemic hit the world, there was a growing percentage of people relying on mobile banking apps. Gone are the days when you would have to physically visit your bank or meet up with your branch representative to get the very basic of financial activities and transactions done.

However, ever since the world got adversely affected by COVID-19, finance apps became more volatile. Like other business sectors, the banking and financial apps also saw upward trends in terms of usage – while the world economies dropped to their significant lows in decades.

The worst part for all of us is the fact that no one knows for how long this pandemic might last. In order to make sure people can safely continue to make transactions on their phone, app product managers and developers need to ‘up’ their game in terms of user engagement and retention.

In this article, we’ll delve the following 10 statistics on banking and finance app’s User engagement:

      • Financial App Usage Trends
      • Financial Apps Newsfeed Best Practices
      • Non-cash Digital Payments & Mobile Wallets
      • Customer Expressed Sentiment Trends
      • Cybercrime Trends & Vulnerabilities
      • Importance of User Experience
      • Banking API Trends
      • Digital Readiness Score
      • Effective Use of User Data
      • Usage of Financial App Chatbots & AI Trends

 

1) Main Reasons of Mobile Banking App Usage in the US

90% of banking app users want to view their account balance

 

The first question that needs to be addressed by a bank or any other financial institution is why their customers need a mobile banking app? What are the various financial activities being made and with what frequency? What areas need to be focused more than the others? 

Below is a 2018 report that shows the core reasons of mobile banking apps usage in the US:

Image Source: Staistica

App development needs to be carried out in a way that meets the core expectations of its users in accordance with their main reason for using the app to interact with the financial institution. Taking into account the above trends, 90% of app users used their mobile app in order to check their account balance. In contrast, only 19% used it for opening up a new account. These sort of trends should assist developers and app managers to identify the key areas that need to be addressed.

 

2) Smartly Using the Newsfeed

89% of Venmo users have the Facebook app.

 

With 89% of their user base also having Facebook’s app and 82% also have Instagram, Venmo might signify a shift towards more Gen Zer, or Millenial style banking and finance apps, that you’d expect from the typical Facebook or Instagram user. Not a lot of financial apps make use of the ‘newsfeed’ functionality, the way we see on social media platforms. Venmo, a famous digital wallet these days, stands out in this regard since it makes the feed public. This means that users can see where and with whom their friends spent their money, while following data privacy guidelines at the same time.

Another credit score reports provider, Credit Karma, came up with the idea of ‘Stories’ that enables its users to make full use of the app via AI-based suggestions and recommendations for them. For example, if a user’s credit score has recently improved, it might prompt the user with a message like ‘Great time for a cheaper car insurance’. 

 

3) Cashless Payment

56% annual increase in mobile wallet adoption

 

Digital payment has already been witnessing an upward trend since the past few years. According to a report, in 2016, non-cash transactions amounted to 482.6 billion globally with a growth rate of 10.1%. These figures are expected to grow with a CAGR (compound annual growth rate) of 12.7% by 2021.

The concept of mobile wallets have seen enormous success. According to the findings published by Business Insider Intelligence, more than half of credit unions that were surveyed witnessed a 56% annual increase in mobile wallet adoption and a 53% in transactions. For developers and app managers, it is the best time to come up with mobile wallet offerings for their app users where they can easily link up their debit and credit cards for contactless payments.

 

4) Know the Customer Sentiment in Financial Apps

Android slightly dominates iOS with 73% of users being happy with the finance app user experience.

 

The way users behave in an app varies from one business model to another. There will always be different expectations across different app niches for a user. According to a report, the users in the banking and finance sector have a lower bar of happiness as compared to other sectors. Also, they are less likely to change since their expectations from the app are observed to be a lower level, too.

Here is an analysis conducted by Apptentive in the mobile banking and finance apps sector in terms of Android and iOS users:

Image Source: Apptentive

According to this data, the difference of customer sentiments is visible when it comes to apps in iOS and Android platforms. With 73% positive emotions and 20% negative emotions, Android apps are clearly taking the lead against their iOS counterpart apps. However, converting unhappy customers to satisfied customers is also low on Android apps.

In addition to this, the New or Repeat Fans number is above the general average. New or Repeat Risks sections are also lower than the general average number, giving an indication of the different behavior observed when it comes to the way people use their financial apps.

Also, as per this research, financial apps usage frequency is low since transactions are usually not made every day, specifically during these difficult times. As a result of this, in-app actions are also low. As a developer or a marketer, one needs to know such statistics in order to improve app efficiency across various platforms during the pandemic and even after that.

 

5) The Element of Security

50% of banking and finance apps experienced malware in H1, 2019.

 

This is, without a doubt, one of the most important factors in the banking and finance app industry. Back in the day when financial apps were not common, people used to be reluctant to sign up for banking apps due to security concerns. 

Numerous incidents of credit card data leakages and banking app hacked by fraudsters were reported in the US and elsewhere, and still it is a major issue for mobile developers and app managers. In 2019, 28% of businesses were attacked with a botnet infection. One-third of all cyberattacks were carried out by insiders and more than 27% of businesses worldwide got affected with mobile devices related threats. Financial apps and mobile banking malware crossed 50% in the first half of 2019. Below are some of the best practices that can be used to secure a financial app:

      • Server-level Security – Apps should be using only the tested and approved server platforms
      • 2-Factor Authentication – Apps should make the 2FA security mandatory for the user
      • SMS Notifications – Apps should send details of all app activities and actions via SMS to the user to ensure complete transparency and added security for all online transactions
      • Digital Signatures – Apps should have the ability to add another level of security that is the digital signature. These are just like real signatures but are specifically designed for online use
      • Expiration of Inactive Sessions – Apps should log out the user upon session inactivity
      • Prohibit Jailbreak Phones – Apps should be able to identify jailbroken mobile phones and warn the user about installing a banking app on such a phone

 

6) UI/UX Design

Redesign finance and banking app experience is a top priority (72%) for businesses.

It is about time that app managers and developers pay a lot of heed towards the overall user-friendliness of a financial app. According to a report in 2018, 75% percent of adults in the U.S. used internet or mobile banking, which is expected to reach 77.6 percent by 2022. 

With such increasing numbers, it is needless to say that app design will play a vital role in how a financial app performs with its competitors. As far as financial services organizations are concerned, here is a survey conducted by the Financial Brand in terms of top priorities for major brands:

Image Source: The Financial Brand

According to the TFB, the order of the top three priorities remained the same as it was the year before that (2017), with ‘enhancing digital experience’ being the top strategic priority with 72% of brands having the same priority level.

UX (user experience) is all about the functionalities and processes of a mobile app. A good UX means the digital product is easy to use. On the other hand, UI (user interface) covers all the visual parameters that a user will see on his or her mobile device. A good UI means a decent theme from one screen to another, graphics, animations, layout, format, font, etc.

 

7) Open API Economy

the revenue potential in the UK via Open Banking APIs could reach around $2 billion by the year 2024.

 

Gone are the days when banking applications would just be about basic banking products and services to its users. In today’s tech-savvy digital era, the concept of open APIs (accelerated programming interfaces) has gained a strong foothold that, eventually, benefits the customers of almost every business model. According to Insider Intelligence predictions, the revenue potential in the UK via Open Banking APIs could reach around $2 billion by the year 2024. This is a 25% compound annual growth rate.

Today, banks offer services and enhancements either by working on their own, or collaborating with financial technology service providers – possible only due to the existence of APIs. These platforms enable efficient, secure and advanced sharing of data between two or more independent systems. Using third-party services or in-house technology, developers and app managers are able to constantly improve their financial apps as per the needs of the online banking industry. 

 

8) Digital Transformation Receptiveness

iOS and Android banking apps users are forecasted to grow 14% YOY

 

Famous actor Johnny Depp once said in one of his movies, ‘the one who falls behind, is left behind.’ That is how quickly an organization, even a large-scale bank, can go out of business within no time. According to a Juniper research in 2018, iOS and Android banking apps users will grow with a 14% YOY rate, while the traditional online banking clients will only have 6% users. At present, around half of the digital banking users interact with their banks using their banking apps.

Here is a readiness index for digital transformation for major banks:

Image Source: Diceus

 

9) Take the Proactive Route for Better Financial Offers

84% of surveyed executives believe that customers want a more personal, tailored banking user experience.

 

In the modern-day world, an individual’s mobile phone knows a lot more about him or her than their own family members or friends. Using the right channels and permissions in accordance with the provided guidelines in terms of user’s privacy, financial apps can offer greater value than they ever did till date. Big data is tipped to be a huge alley of the banking and finance industry in the future. Not just for baking and finance apps.

One of the main ways in which big data can helping banking and finance apps, is by helping executives to make data-backed decisions about their users. Secondly, it offers an opportunity to offer a more tailored, personalised experience to the banking end user, through acquiring knowledge of those users through big data. According to Oracle, “84% of the surveyed executives agree that customers are looking for a more individualized, tailored experience”. Thus, we think big data will make a huge impact in coming years, and is a deserving inclusion in this list of the top 10 banking and finance app engagement statistics.

 

10) Efficient Use of ChatBots

30% of large financial corporations and institutions plan to invest in AI and chatbots

 

In recent times, a lot of businesses have introduced chatbots in order to achieve service excellence at minimal costs. It’s becoming rare for organizations to hire human resource for tasks that can be efficiently carried out by AI-based chatbot.

In 2017, a PWC research found that 30% of large financial corporations and institutions plan to invest in AI and chatbots. In addition to this, AI-focused fintech business startups have gained higher investments with an average of $1 billion in investments in the preceding two years.

Financial apps have seen similar trends. Chatbots are usually integrated with apps and provide a communication channel between a user and the institution. Using machine learning and artificial intelligence, bots can be trained on thousands of data sets and queries that can be used by digital marketers, app developers and sales team to drive organizational growth via predictive analysis and forecasts.

 

Final Thoughts on the Top 10 Statistics on Banking & Finance App’s User Engagement

The frequency at which financial apps are used comes in third behind social media and weather apps – in 2019, consumers accessed financial and banking apps over one trillion times. However, financial institutions, app managers and developers find it quite hard to achieve good retention rates.

Leanplum and Liftoff reported that after a day of signing up for a financial app, only 34.8% of users stay. After one week, this number dropped to 14.9%% and after 90 days, it is only 3.4%. If we compare it with the general retention rate of 5%, it is quite evident that retaining users over financial apps is by no means an easy task. Keeping all the aforementioned stats and trends into consideration, it is about time that app developers and product developers bring in all their expertise and experience to full effect in order to achieve noticeable prominence in the world of finance apps – a world that generated more than $3 billion in venture funding in the first three quarters of 2019 alone.

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