As banks compete for mobile-centric Gen Z customers, new data from the mobile analytics platform App Annie suggests fintech companies are growing their app user base faster than banks. The report, titled “The State of Mobile 2020,” found that, globally, the top–10 fintech apps grew their monthly active users by 20% year over year in 2019 compared with just 15% for banking apps.

“What is working for other generations is not necessarily going to work for Gen Z,” said Amir Ghodrati, director of market insights at App Annie. “Your mobile experience needs to be on par with all their other mobile experiences. You’re not just competing with other finance apps or other banking apps. You’re competing with every other app experience they have through social media and gaming.”  

Although banks are increasingly prioritizing their mobile experiences, App Annie suggests a common mistake among them is simply transporting a web banking experience into an app. According to Ghodrati, banks can learn from fintechs that have created a separate mobile experience that includes an intuitive setup and customizable features. 

Ghodrati added that many fintechs created a mobile-centered approach well before their bank counterparts, giving them a head start. He said one key to increasing app usage is to create a fun experience, singling out PayPal-owned Venmo and its social feed as an example. He also pointed to Robinhood, which gives free stock to new users and the users who refer them. 

“Apps can make their experience more fun by celebrating small wins, creating a bright and color-coded environment where things change based on status, and incorporating more social elements,” Ghodrati said. “You need to create a reason why people want to come back to the app and also incentivize them to share this experience with others.”  

See also: Payment apps are struggling to retain users, data shows

The report also highlighted that mobile wallets from fintech companies get higher engagement than those from banks. Globally, mobile wallets from non-bank apps averaged one more weekly session per user than mobile wallets from banks, with notable exceptions being Indonesia, Brazil, France, Germany, Canada, Russia and the U.K. 

Overall, consumers around the world used their finance apps more than 1 trillion times in 2019, a 100% increase from 2017. Consumers spent $120 billion in app stores and an average of 3.7 hours per day on their mobile devices in 2019.

App Annie analyzed data from more than 8 million apps and thousands of websites, and used that information to estimate download numbers, transaction patterns, usage and advertising. The company provides insights for clients to help them with marketing, product management and growth strategies, and its clients include Pinterest, LinkedIn, United Airlines and Coca-Cola. 

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