India is a huge driver of mobile money uptake, with the second-highest growth spurt after China, reveals a new study titled The Mobile Finance Report 2019: Banking and Payment App Benchmarks’ from mobile industry leaders Adjust and App Annie.
The report highlights that in addition to smartphone penetration, which grew from 199 million to 374 million from 2015 to 2019, the uptake of mobile finance has also been facilitated by the government with Reserve Bank of India relaxing KYC rules. Under this new law, customers can download e-wallets and use its services for ticket booking, bills and payments without the need to produce official documents or photographs.
“We have seen that the popular mobile finance apps are a mix of home-grown brands and international companies - from India’s PhonePe and BankBazaar to global giants like Google Pay,” says Shubham Jha, Sales Manager India at Adjust, the industry leader in mobile measurement, fraud prevention and cybersecurity.
Decoding innovation in mobile finance
The research is a collaboration between Adjust and mobile data and analytics platform, App Annie. Adjust’s data covers apps from 36 countries, from January to June of 2019. And, for the purpose of the research, the apps were divided into two categories: mobile banking apps and payment-specific ones.
The report covers a whole range of benchmarks, including the number of downloads per market, retention rates, differences between organic and paid performance, and cost per install. It also delves deeper into aspects of how mobile banking is cashing in on customer loyalty, why post-install performance of payment apps is still a challenge, why banking apps have the best retention around the world, and the future of mobile money, among others.
Talking about the objective of the report, Shubham shares, “Mobile technology has created radical innovation in the banking sector across the world. With the Mobile Finance Report 2019, we want to chart the growth of mobile finance around the globe, and equip marketers in the industry with the data they need to boost their results and plan for the future. Alongside growth figures, the report also provides data on average industry retention and session which will help finance, banking and payment brands around the world benchmark their app’s performance.”
Key report findings:
- Growth: App Annie data reveals growth of finance app downloads in Asia has been exponential between 2014 - 2018 (though it’s slowing in 2019). Europe and the Americas are at the same point Asia was in 2014, suggesting they could be on the cusp of growth, though regulation, incumbent banks and social attitudes could prevent fast-scale growth.
- Retention: Adjust data finds that retention is exceedingly high for finance apps, but low for payment apps. The key challenge for banks lies in getting users to use the app post download, whereas for payments, the challenge lies in getting users to use the apps instead of cards or money.
- App Annie data reveals, per market, China downloads the most applications with Korea in second place.
Neobanks and super apps - new growth drivers
The report highlights that neobanks are the new contenders in the fintech space. Offering online-only services by pairing with established institutions, neobanks futher their advantage with superior data and analytics capabilities and build deeper and broader relationships with their customers, along with improved products.
Another revolution that is brewing in payments is the rise of super apps. Super apps combine the aspects of social media with the ability to transfer money. This has led to people handling more transactions from their phones and lesser reliance on physical money. And, Asia has been a big proponent for super apps, leaving the west to catch up.
Why finance app growth is strongest in APAC
According to the report, finance apps have gained huge momentum all around APAC — with downloads leaping from 383 million downloads in 2014 to reach a massive 1.8 billion in 2018. This ties in with 2018 Global System for Mobile Communications (GSMA) data showing that 90 million new accounts were opened during this period in APAC alone.
“A huge driver of this growth is the introduction of mobile finance in regions that were previously underbanked, or where financial services were not hugely accessible. These apps have given everyone with a mobile phone the opportunity to bank. Another factor is the rise of super apps across APAC. China, home to super apps WeChat and Alipay, is naturally the biggest driver of mobile money uptake in the region, but its growth is closely followed by India,” says Shubham.
He adds, “Finally, an important factor to consider is that many consumers in Asian markets download several finance apps rather than a single central one. For instance, Chinese consumers have around seven finance apps installed on their phone while South Korean consumers install four finance apps on an average.”
The shortcut to consumer loyalty: personalisation
Huge download numbers don’t always translate into loyalty, a reality that is well understood by any firm that owns an app. Even with high retention rates, getting users to engage with an app after install is a tough challenge - particularly for finance.
Key to instilling this loyalty is bridging the gap between registration and deep-funnel conversions. “But, research suggests there is a shortcut. Brands that pursue personalisation in all they do are finding success. On mobile, this revolves around using data and analytics to anticipate user needs, defining and targeting customer segments, and building deep relationships with every single user - wherever they are in the marketing funnel,” explains Shubham.
The report highlights that while finance apps have seen huge growth in India, the GMSA warns that the country has one of the world’s highest inactivity rates and says that the apps that integrate strong re-targeting and personalisation tactics will be able to buck the trend and instill long-term loyalty with their users.
Mobile payments ushering the next wave of financial innovation
For consumers, payment apps mean sheer convenience. Handling payment directly from their phone means less need to carry bulky wallets or spare change - and further drives the trend of being able to do everything from your phone. And, leveraging this consumer preference to their advantage is the new breed of payment platform providers, mostly from APAC.
Shubham says, “From China’s WeChat to Southeast Asia’s multi-service app Gojek, these apps combine social, retail and financial services with their vast data sets of insights to deliver mobile consumers a single, integrated and efficient experience.”