By Roy Urrico
Finopotamus aims to highlight white papers, surveys, analyses and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry.
The COVID-19 pandemic directly impacted how consumers interact with credit unions and banks and how financial institutions operate. As a result, financial technology applications are in high demand, experiencing a 132% leap globally in downloads in the last two years, and a 110% increase in the U.S. alone, according to a report from AppsFlyer.
The San Francisco-based marketing measurement provider AppFlyer’s 2021 edition of “The State of Finance App Marketing” also found fintech marketers invested $3 billion on user acquisition (UA) in 2020 and that COVID-19 drove an increase in installs as people relied more on banking and investing from home. This spurred marketers to increase efforts, driving up costs.
The AppsFlyer analysis is an anonymous aggregate of proprietary data collected from 4.7 billion finance app installs; 400 million installs and 120 million non-organic installs were North American based. According to AppsFlyer, non-organic installs are downloads that happen as a result of any type of marketing activity — paid or owned.)
“The sector has experienced rapid growth thanks to accelerated digital transformation in 2020,” the report disclosed. “More importantly, a shift in mindset has led even those that have been slow to jump on the fintech train to grab their seat.”
App Installs Surging in 2021
While these install trends normalized as lockdowns subsided, installs are surging again buoyed by the vaccine rollout. For example, in the first quarter of 2021 mobile apps gained 40% on IOS and 25% on Android. Financial services apps dominated within the category with more than 50% of North American installs on iOS and Android in last quarter of 2020 and the first quarter of 2021. Investment apps were also in high demand, with 29% iOS and 22% Android.
Some other findings:
· Within the $3 billion spent by finance apps on user acquisition in 2020, North America dominated with $985 million spent. North America dominated with $985 million, followed by Latin America with $540 million.
· Pandemic demand for finance apps led to a 34% jump in cost per install in North America in early 2020. Globally, rising costs increased the cheaper practice of remarketing, which saw a more than three times upsurge in conversions.
“Fintech experienced rapid digital transformation over the last year, with the pandemic leading to a shift in mindset even for those that have been slow to adapt,” said Shani Rosenfelder, head of content and mobile insight, at AppsFlyer. “Marketers should strive for efficiency with their spend by following the rising cost per install trend and focusing on user acquisition to meet new demand. Marketers should also explore more affordable remarketing campaigns to keep their brand top of mind amid rising market competition.”
Installs Swell; Fraud Drops
There were a number of key insights garnered by AppsFlyer:
1) The report found non-organic installs doubled between first quarter 2020 and first quarter 2021. The study maintained that the higher cost of media in iOS made it harder for the average finance app to scale user acquisition as much as Android, with a significant 50% gap between the share of non-organic installs on both platforms.
2) The study showed an 81% decrease in the fraud rate when comparing the first quarters of 2020 and 2021. In the 2020 edition of the finance app marketing report, AppsFlyer noted that 28% of finance apps suffered an install fraud rate that exceeded 30%. However, due to greater awareness of fraud among marketers and stronger anti-fraud solutions, Android’s fraud rate dropped 80% and iOS showed a similar decline between the first quarter of 2020 and the first quarter of 2021.
3) Digital banking installs rose 45% between the first quarter of 2020 and the first quarter of 2021. Finance app installs increased 20% overall, but financial services and traditional banking app installs saw only a 15% increase between quarter one 2020 and quarter one 2021. However, in the first quarter of 2021, traditional banks gained 22% in the first quarter of 2021.
4) Mobile apps play a key role in this digital transformation across the globe and especially in large, mobile-first or even mobile-only developing markets, where hundreds of millions are unbanked or underbanked. Specifically, finance apps downloads reached 4.6 billion in 2020 (an increase of 15% year-over-year), according to AppAnnie. App marketers are following suit, upping their investing to meet the heightened demand.
Digital Acceleration Bears Fruit
The AppsFlyer study indicated that in quarter one 2021, the rewards of digital acceleration started to bear fruit with a surge in downloads in three categories:
Payment apps: Social distancing led to fewer face-to-face cash exchanges. More have avoided cash and have moved to contactless payment methods.
Investment apps: Heightened interest and activity in the booming stock markets, significant demand for trading apps driven by Robinhood, and the massive growth of crypto currencies led consumers to invest and trade on-the-go.
Banking apps: Account owners have come to expect a seamless financial digital experience, mainly with their phones, driving innovation among digital players and traditional banks that are adopting (or acquiring) new technologies and services.
Demand for finance apps is rising across the globe. Twenty-nine of the top 40 finance markets (by app installs) enjoyed a growth of at least 20% year-over-year, however it was the developing markets that dominated the number of installs. The average number of downloads in developing markets was 70% higher than the average in developed markets, with India, Brazil and Indonesia making up almost half of the global number of downloads.
“According to our research, only 50 to 60% of users who register during the first 30 days post-install do so on the first day, and that’s excluding churned users,” said Brian Quinn, president and general manager, AppsFlyer, North America. “With this year heading for a record with total spend, reaching no less than $1.2 billion in quarter one alone, we believe that combining different types of marketing activities in addition to improving the registration funnel by optimizing and shorten the time from install to registration will give marketers the edge to utilize their 2021 budget to the fullest.”