How to Overcome Them & Develop Winning Fintech Apps
The mobile app success rate is only 25%, meaning most apps fail. Successful fintech apps need strategic thinking, collaboration, and industry understanding. Fintech product managers face complex and ever-changing needs, requiring knowledge of finance tech, user behavior, and market trends.
Fintech apps retain only 16% of users annually, while banking apps retain 57% and insurance apps retain 32%. This means 84% of fintech app users are likely to uninstall it within a year, pressuring product managers. Fintech product managers face unique challenges: regulatory compliance, complex integrations, adapting to customer needs, and staying ahead in technology. In this article, we’ll explore the seven major challenges fintech product managers face and offer tips to develop successful fintech apps.
1. Complying With Regulations
Navigating the realm of regulations poses a major challenge for fintech organizations, imposing significant constraints on their growth. The complexity is compounded by the fact that these organizations must adhere to diverse sets of rules, given their multinational operations. Compliance with regulations such as Anti-Money Laundering (AML), Know Your Customer (KYC), and Know Your Business (KYB) demands meticulous attention and caution.
Ecosystem of Regulations
Adding to the complexity, fintech firms must adhere to regulations governing fraud, data security, money laundering, risk regulation, taxation, and more. Given their global reach, these companies face regulatory demands across multiple jurisdictions. Requirements can vary from one country to another, resulting in differing obligations for fintech companies based in different nations.
This is where fintech product managers come in. They need to know and abide by the regulations in every location and industry they operate in, or their company could face severe penalties. It’s not an easy job, but it’s crucial to keep the company out of trouble and on the path to success.
2. AI & Machine Learning Expertise
AI’s rapid advances assist fintech firms in supporting financial institutions. It swiftly and accurately processes big data, enhancing risk profiling, fraud detection, and personalized customer experiences. AI, however, presents challenges for fintech product managers due to its complex functions and fast-paced development, often intimidating financial companies.
To overcome this, the financial sector needs AI experts who understand the technology and can train others to use it effectively. When combined with big data, AI can help product teams with risk analysis, customer trend monitoring, and automation, but it requires expertise and ongoing maintenance.
Use Pre-Trained AI
Another, more economical solution, is to use built-out, pre-trained AI solutions. With so many companies building AI-driven solutions, the need for in-house expertise is becoming less necessary. If you don’t have access to a team of AI experts, leveraging an AI-driven OCR API platform is the way to go.
Explore the differences between Artificial Intelligence and Intelligent Automation
3. Protect Data
Data security is crucial for long-term success in fintech. Breaches are costly threats, with hackers targeting personal data, including credit card information, in mobile apps and vulnerable fintech software. A prioritized focus on data security increases the likelihood of success for fintech companies.
Tech-focused financial firms must outpace hackers and fortify their virtual security. Fintech apps must prioritize data security for customer trust. If privacy or security concerns arise, customers may shun the product, risking severe damage to the company’s reputation.
A key solution to the challenge of data security, is to use AI and machine learning so that data extraction is 100% automated. When you eliminate the need for humans-in-the-loop, you remove access to sensitive information. It’s a win-win!
4. Blockchain Integration
Fintech firms acknowledge blockchain’s potential in tracking financial transactions. It benefits various products, from digital wallets to finance management systems. The global blockchain market is poised for substantial growth, offering decentralized data exchange systems and digital ledgers to address industry challenges.
To remain competitive, fintech firms must embrace blockchain. Yet, challenges exist. Blockchain is new and unfamiliar to many IT professionals, with maintenance costs. It may not suit all financial solutions and can raise suspicion among traditional banks and governments due to bypassing established systems and regulatory difficulties.
5. Finding Tech Talent
Tech talent is a significant challenge for fintech product managers developing mobile apps. The industry’s competitiveness fuels high demand for skilled developers experienced in app development. Managers seek developers with technical expertise and a grasp of financial industry nuances. Adaptability to fast-paced, evolving tech environments is vital. Swiftly securing tech talent can be decisive for fintech product success in a time-sensitive market.
When building a fintech mobile app that requires AI capabilities, this requires expertise. An AI-driven OCR solution requires people with experience in building machine learning models, computer vision, and neural networks. If recruiting, onboarding and overseeing a team is going to slow down your pace of innovation, consider going with a fully built-out AI solution. Not only will this save you in hiring costs, but it will provide you with time savings from having a pre-trained AI model.
Thinking about building AI-Driven OCR features for your app? Here’s a side by side comparison of Make vs Buy.
6. Meet Stakeholder Expectations
Successful fintech product development involves satisfying diverse stakeholders: regulators, lawyers, users, and executives. Each group holds distinct expectations and success criteria, with leaders and clients prioritizing profitability while users value design. Effective communication skills are vital for fintech product managers to engage stakeholders and address their expectations. Increasing success likelihood, agile teams adopt an incremental approach, delivering work in small steps, enabling feedback and adjustments throughout. This ensures the final product meets everyone’s expectations.
Time to Market
“It’s a build and buy world. Build the things you’re really good at and then find the solution providers that are really good at the niche products. Figure out ways to integrate them into your platform and focus on the things that matter most. For us it was accuracy, speed and cost.” – Tim Russo, Sr. Director Fintech, Strategic, and Channel Partnerships, Navan
Fintech product managers face stakeholder pressure for speedy app launches. Executives, investors, and users seek swift returns, while competition demands keeping pace. This urgency requires managers to balance speed, quality, and compliance. They collaborate with development teams, setting clear timelines, prioritizing features, and implementing feedback loops to meet stakeholder needs.
Avoid Unnecessary Building
If your challenge involves AI-driven OCR features, consider how long it will take you to acquire enough data and properly train your AI model. If getting to market quickly is important, chances are, it’s not worth building an AI-driven OCR solution from scratch. Instead, use a pre-trained model and ensure your stakeholders that on launch day, your OCR technology will have Day 1 accuracy.
7. Improve User Experience and User Retention
“If the pain point was we don’t want someone to have to take a picture of a receipt and then manually have to enter in all the line items, then we need to find a solution to address that. We evaluated solutions through the lens of what provides the best customer experience?” – Tim Russo
Fintech product managers face the challenge of meeting the rising expectations of customers who demand more than just products that work as expected. In today’s market, customers expect exceptional quality and an outstanding user experience to remain loyal to a fintech organization. Meeting these expectations is crucial for customer retention, and product managers must strive to provide high-quality products and experiences to keep their customers satisfied.
Provide Exceptional Experiences
According to recent studies, the average user retention rate for fintech mobile apps after 90 days is around 20%. This means that only 1 in 5 users continue to actively use the app three months after downloading it. This statistic highlights the ongoing challenge that fintech product managers face in keeping users engaged and loyal to their apps over an extended period. It emphasizes the importance of implementing effective strategies to enhance user retention and continually deliver value to customers in the competitive fintech market.
Zeroing out Abandonment Rates for Fintech Apps
One of the biggest painpoints for fintech mobile app users is inaccuracy with data extraction. To ensure documents are scanned, processed and categorized properly, use an AI-driven OCR solution. This will allow end users to have data extraction that is both fast and accurate.
How Fintech Product Managers Can Address Their Challenges
Fintech product managers tackle app development challenges through effective communication and collaboration with stakeholders. Understanding expectations aligns efforts and streamlines development. Embracing agility, breaking down development into increments, enables faster feedback, iterative improvements, and adaptation to market dynamics and user needs. This reduces risks and enhances the development process.
Moreover, it is crucial for product managers to stay updated with the latest industry trends, emerging technologies, and regulatory requirements. Continuous learning and keeping a pulse on the market enable them to make informed decisions, identify opportunities, and anticipate potential obstacles. Take advantage of technologies you can leverage that save you time and effort.
Lastly, fostering a customer-centric mindset is essential. Product managers should regularly engage with users, gather feedback, and incorporate user insights into the development process. By understanding user needs and preferences, they can build mobile apps that deliver exceptional value, improve user experience, and enhance customer retention.
Leverage AI-Driven OCR
Fintech product managers can further address the challenges of developing mobile apps by leveraging the power of an AI-driven OCR API platform. Such a platform can significantly enhance the app’s capabilities by providing accurate and efficient optical character recognition (OCR) technology. This enables seamless extraction and processing of data from various documents, including invoices, receipts, and identity documents. By integrating an AI-driven OCR API platform, product managers can streamline data entry, automate document processing, and improve overall app functionality. This not only enhances user experience but also increases operational efficiency and accelerates time-to-market for fintech apps.
Check out Veryfi’s Fintech Software Toolkit and accelerate your app development. This complete solution includes our OCR API Platform and Veryfi Lens. Get started now with your free account or schedule a demo with one of our in-house experts.