What we can learn from Monzo,
Revolut, and Stripe?

In 2019, a study showed that 60 percent of global consumers wanted to transact with financial institutions that provide a single platform—such as a mobile banking app—up from just 31 percent in 2017. And by 2022, more than 65 percent of Americans are expected to use some kind of digital banking.

While giants like Monzo, Stripe, and Revolut dominate the market, the audience still seems to be 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 own 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 development. Without a proper market analysis, the chances are your brilliant initiative will go to waste before it gets past the first funding stage. 

This part can be tricky since you’ll have to work with people who are seeking financial management assistance. Often, this target audience may not be as finance-savvy, and is more likely to be historically underserviced. You will have to avoid personal bias in order to come up with values, engagement models, and features that resonate with your target audience. 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 emphasis of the service you provide will depend on the form of commercial transaction form you prefer. While B2B providers like Stripe strive to reduce friction for businesses and for 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 want to be able to make investments and take out loans with a single click. They then want to track and manage these transactions on mobile devices using fully-fledged banking platforms. If you’re 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:

• Research by ComScore shows that half of all smartphone owners will use voice-activated search in 2020. As users expect their apps to be as easy to use as possible, they expect they also expect that voice commands will be a part of the process. Imagine being able to say “15 bucks at McDonald’s” to your finance app instead of manually typing in the amount and assigning “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’s more, customer service coupled with AI keeps users happy by instantly processing the most common requests and interactions.
• Big data helps to drive better customer service while reducing fraud risks. Data is king since you can use it to comprehend user behaviors and find out where you did great 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 prioritize 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 apps are simple. Most of these tools are intended to be used on the go — in places like airports and train stations, or while traveling, often in places with poor internet connections. With this user behavior in mind, it’s best to focus on reducing your user’s anxiety when managing their finances by making the app’s functionality and design as comprehensible and user-friendly as possible.

After you’ve reached 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 make sure spending tracking isn’t abandoned 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 the historical data collected by the app to get to know your users’ lifestyles, and offer targeted time- and place-appropriate finance management options. In particular, deliver instant updates or leverage predictive analytics to notify users when their balance is approaching zero. With new users, simply 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 use it to pay bills.
• Be on the same page. Keep up to date with the daily financial habits of your target audience to provide them with relevant features. People often struggle to split the bill on a night out—so apps like Revolut do the math for them. People lose their banking and credit cards all the time. Tools like Monzo allow users to “freeze” and “unfreeze” their cards without reissuing.

Think of a monetization strategy

This is a point you should consider early in your app development process, since it will affect your promotion and customer acquisition strategies, as well.

The common 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 they test the waters. But in order 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 just a few taps—as a simple alternative to the over-complicated process of opening an account at a bank.

For the business audience to be willing to cooperate, your user base should be rather 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 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.”