Why Most Banking Apps Fail to Achieve User Adoption Targets (And How to Fix It)

Even though a user downloads an app, they’re not guaranteed to keep coming back to it regularly. Bad performance, a lack of trust, or complex onboarding processes can send users away forever. Let’s take a close look at the reasons for this and how high-quality banking app development can help.

Death by a Thousand Friction Points

Poor onboarding experiences are kryptonite for banking apps. In fact, they lead to abandonment rates of between 63% and 68%. Overly complicated verification steps can deliver churn rates of up to 80%. The issue here is clear: when people’s first experiences with a banking app are problematic, they look elsewhere. And they do so quickly.

Let’s get into specifics. Long and repetitive forms are repeat offenders, as are excessive document uploads. Other turn-offs include unnecessary mandatory fields, technical glitches, and a lack of progress indicators.

Of course, banking apps have it much worse than other platforms because they’re highly regulated. Know Your Customer and Anti-Money Laundering measures can add to the complexity. Add multi-step verification, face recognition, proof of address, and income verification to the mix, and you have a recipe for failed user adoption.

The trick to successful banking app development is getting the balance right between compliance and user experience. In our experience, they go hand in hand with each other.

Trust and Clarity Issues Erode Confidence

Let’s say that your onboarding process is a success. Users are signing up in their thousands. But adoption rates are still disappointing. What’s happening? In our experience, trust and clarity issues are often to blame.

It’s important to remember that we’re expecting users to share their most sensitive data with us. If there’s any ambiguity in relation to security, privacy, or fees, users are likely to limit their exposure — or abandon the application altogether.

So, what has the potential to send banking app users running into the arms of competitors? In our experience, opaque language is a big issue, and so is a lack of clarity on fees. It’s also worth noting that the average user is instinctively distrustful of new banking applications.

If people don’t see visible security indicators at the right times, they’re likely to become wary. Other issues to be aware of in banking software development include vague error messages and poor explanations of data usage and the transaction process.

Generally speaking, 88% of online consumers are less likely to return to a site after a bad user experience. But think about what’s at stake with fintech and banking apps. When the prospect of theft, fraud, and financial loss looms large, consumers become even more skittish when trust and clarity are lacking.

Deliver Performance and Reliability, and User Adoption Will Follow

Your banking software engineers have delivered a platform that makes onboarding a breeze and fills users with trust and confidence. But you’re only halfway there. To deliver the adoption rates you need for long-term growth, you need to impress your customers over a period of time. And the best way to do this is through performance and reliability.

Think about the last time you gave up on a banking app. What was the final nail in the coffin? Perhaps the slow loading times were leaving you frustrated. Maybe the serious lag during transactions was the biggest turn-off. Everything from failed biometric logins to performance issues at peak times can send your users running for the hills.

When it comes to brand loyalty, you simply can’t let your guard down. Nearly a third of customers leave a brand after one bad experience , and around half abandon a brand they trust after two or three poor customer service experiences.

When users log on to perform sensitive or high-value transactions, they’re often already on edge. When performance or reliability issues strike, trust is destroyed — sometimes permanently. When safety and security are questioned, the average user is much less likely to develop a habit of using a banking app. And that’s why so many platforms struggle to achieve and maintain target adoption rates.

To build trust, nail the customer experience from the outset. Good software development in banking involves the use of plain language, visible security signals, concise explanations, fee summaries, and unhindered access to support.

Why Effective Fintech Software Development Relies on Data-Driven Iteration

In our experience, there’s never a single big fix for banking apps with low adoption rates. The best platforms are built through continuous feedback loops. Assess the relevant data to spot drop-offs, make improvements, and test those improvements. Measure the results, and start all over again.

But to get this right, you have to choose the right metrics. While no two bank app design projects are ever the same, some of the most common metrics we’ve used at DigiNeat over the years include onboarding completion rates, retention rates, abandonment points, session lengths, and feature usage.

Fortunately, there’s a plethora of specialized tools at the disposal of mobile banking app developers. Heatmaps, session recordings, cohort analysis, and A/B testing platforms are perhaps the most common.

We recommend taking thefollowing steps to ensure you iterate based on pertinent data:

Run A/B Tests on Onboarding Versions

Create more than one process to give initial users different onboarding experiences. The results should tell you what users want. Fewer steps or progressive disclosure is a decision you’ll need to make early on in the process.

Analyze Exit Surveys

Examine exit surveys and in-app feedback to identify where and why people are giving up. In many cases, trust and performance issues will be to blame. Once you know, you can do something about it.

Monitor Key Performance Metrics

Once you know where the potential issues lie, you can make improvements and monitor the results. The most common metrics at play are usually things like load times, crash rates, and trust-based drop-offs.

Iterate Regularly

Think of banking app development as a marathon, not a sprint. Based on metrics and feedback, make changes to your application on an ongoing basis. Measure adoption again, and move on. As your platform evolves and grows, you’ll need to make iteration part of your everyday operations.

The key is discipline. Treat every release as an experiment, not a final version. In a competitive banking landscape, where users switch apps easily for a better experience, the ability to learn from data and adapt quickly separates apps that get opened once from those that become daily tools.

Banking App Development for Maximum User Adoption is Just a Free Strategy Session Away

As experienced banking and fintech software development experts, we know the barriers to user adoption — and how to overcome them. Give your platform the best possible chance of long-term success by contacting the DigiNeat team today. A free strategy session is just the beginning.