What we can learn from Monzo,
Revolut and Stripe?

In his guest piece for The Verge, Bill Gates predicted that by 2030, the two billion people who don’t have a bank account now will be storing money and making payments with their phones. And he was right — in 2022, more than 65 percent of Americans are using some kind of digital banking. While FinTech giants like Monzo, Stripe and Revolut dominate the market, the audience still seems underserved and eager to try alternatives. How do you ensure smooth sailing for your FinTech venture in a highly competitive environment? 

In this blog post, we shed some light on the hottest battle-proven practices that the most popular finance companies use, and we share our insights on how to develop successful FinTech apps.

Identify your niche in the market 

First off, research the market and recognize the needs of your target audience before putting any effort into FinTech development. Without proper market analysis, the chances are your brilliant initiative will go to waste before it gets past the first funding stage. 

This part is tricky since you will have to deal with people seeking financial management assistance, who are unlikely to be finance-savvy and may not even know what they are looking for. To develop values, engagement models, and features that resonate with your target audience, you will have to avoid personal bias. While most FinTech apps now seem to appeal to millennial demographics, you could play this card differently and focus on other audiences. 

Don’t go for a “one-size-fits-all” solution. The service you provide will depend on the commercial transaction form you prefer. While B2B providers like Stripe strive to reduce friction for businesses and the tech people who will integrate and maintain the solution, B2C services like Monzo focus on consistent UI and performance. 

Use an innovative approach 

Finance management today goes far beyond storing money in accounts. People make investments and take out loans in a single click, and they want to track and manage them on mobile devices using fully-fledged banking platforms. If you are determined to stay ahead of the competition rather than provide a plain digital wallet, here are a few rising trends to keep your eye on:

• Researchers suggest that by 2024, the number of digital voice assistants will reach 8.4 billion units. As users expect their apps to be as easy to use as possible, they expect them to respond to voice commands. Imagine being able to say “15 bucks at McDonald’s” to your finance app instead of manually typing in the amount and assigning the “restaurants” category.
• Artificial intelligence streamlines operations users don’t have the time or skill to do themselves – like sorting expenses into categories or budgeting – and AI-enabled predictive analytics is the most suitable tech for this. What is more, customer service coupled with AI keeps users happy by instantly processing the most common requests and interactions. 
• Big data is what drives better customer service and reduces fraud risks. Data is king since you can use it to comprehend user behaviors and find out where you did tremendously or dropped the ball. Additionally, by seizing the power of historical data, you gain a unique opportunity to understand which of your users’ financial management challenges you should tackle next.
• Despite being widely used, NFC technology still has that magic feel to it. You can activate cards issued by Monzo by simply tapping the card on the back of your phone. By enabling NFC payments, you can save your users’ time and protect their sensitive data from being exposed outside of the platform.

Keep user experience in mind

All successful FinTech mobile apps are simple. Most of them are intended to be used on the go, in airports and train stations, while traveling in facilities abroad, and in places with weak internet connections. The least you can do to reduce user anxiety in managing their finances is to make the app’s functionality and design as comprehensible and user-friendly as possible to reduce user anxiety in managing finances. 

After reaching this usability milestone, you can think outside the box and fulfill more specific needs. Here are a few ideas on how to take user experience to the next level:

• Enable gamification. Spark user interest to ensure they don’t abandon features like spending tracking after a few weeks. Enrich the functionality of your app with goal setting and progress tracking features – the sense of achievement is addictive.
• Personalize at scale. Utilize historical data to know your users’ lifestyles, and offer targeted time- and place-appropriate finance management options. Deliver instant updates or predictive analytics to notify users when their balance is approaching zero. Ask questions at the point of registration to put initial personalization into place.
• Provide customization freedom. Let users rearrange their app layout and tailor their in-app experience to their spending patterns. Some will use your app for savings, while others will pay bills.
• Be on the same page with your audience. Keep up to date with the daily financial habits of your users to provide them with relevant features. People struggle to split the bill on a night out – so apps like Revolut do the math for them. People lose their bank cards all the time – so Monzo users can “freeze” and “unfreeze” their cards without reissuing.

Think of a monetization strategy

You should consider this point early in your FinTech app development process since it will also affect your promotion and customer acquisition strategies.

The standard monetization models are scheduled fees, in-app advertising, business collaboration, and API as a product. Most FinTech apps stick to the ‘freemium’ model that keeps users hooked while testing the waters. But for users to tolerate ads or for the upgrade to the paid subscription to happen, the benefits and experience you propose should offer the most bang for their buck.

The key here is once again knowing the pains of your audience. If your app is B2C-oriented, does it bring value to your user’s life? Is it easy enough to sign up? Are your offers unique compared to your competitors? For example, Revolut issues a free UK bank account in a few taps — as a simple alternative to the overcomplicated process of opening an account at a bank.

For the business audience to be willing to cooperate, your user base should be relatively large for a targeted region and well-qualified to yield significant dividends. The “API as a service” model, like the one Stripe offers, is all about cutting time and development costs for businesses. You start accepting payments without hiring dedicated mobile development teams, without completing piles of mundane paperwork, and without waiting months for legal approvals.

What are the crucial factors in the success of a FinTech app?

We asked Alex Budnitsky, a full-stack .NET Software Engineer at Forte Group and an expert with hands-on FinTech and InsurTech experience, to weigh in on the topic:

“First, ease of use matters. In today’s fast-paced world, filling out long forms or speaking on the phone for a single transaction makes people impatient. They prefer auto-filled fields and accessible integration with banks and payment providers familiar to them.

Second, FinTech app users are time-sensitive and want ‘instant everything’ – the result should arrive as soon as they hit ‘send’ or ‘pay.’ At the very least, you should set up fixed time frames that beat those of your competitors.

Another deal-breaker is adherence to local state laws and security regulations, like the General Data Protection Regulation (GDPR) in Europe. Without security, it is not going to fly. People want their money to be safe, and no in-app bells and whistles will make up for solid fraud protection.”

The article was first published on July 7, 2020, and was updated for relevancy and accuracy on January 27, 2022.