Optimizing Core Features
for User Retention

Optimizing Core Features for User Retention

A Case Study at Finku

Organization

Finku

Project Type

Undergraduate Thesis

Timeline

January — June 2022

My Role

Sole researcher and designer, collaborating with professors and professionals for validation

Overview

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About Finku

Google and Temasek (2016) project that Southeast Asia is poised to become the fastest-growing fintech region worldwide. Despite the immense potential of fintech to contribute to economic growth in Indonesia (Alhassan et al., 2020; Beck et al., 2007, 2008; Bruhn & Love, 2014; Darmansyah et al., 2020; Wang et al., 2019), there remains a considerable challenge concerning the financial literacy levels among Indonesians, which in 2009 stood at a relatively low rate of 38.03 percent, ranking in the 30th percentile globally (Google & Temasek/Bain, 2019; Kirana & Havidz, 2020).

Finku is the top Indonesian personal financial management (PFM) app market player. It boasts the most extensive user base, highest user engagement, and substantial user time on the platform. Finku simplifies financial management by seamlessly connecting with users' financial accounts, facilitating budget creation, and providing access to financial reports. Users can effortlessly track their earnings and expenses and plan their spending, savings, and investments.

Problem

Although Finku is the leading Indonesian PFM app in the market, Finku faced a significant challenge in retaining users, with a lower W4 retention rate compared to other fintech apps.This trend could lead Finku to lose profit from monetized features and a decline in active users, jeopardizing its competitive position (Khayer & Bao, 2019; T. Zhou, 2013).

Solution

Exploring a new app design to foster user retention is essential to tackle this challenge. Features that have been explored and enhanced include:

Improvement of the app's information architecture to facilitate seamless user interaction with interconnected financial data

A feature that allows transaction exclusion, aiding users in addressing transactions that are automatically tracked as duplicate

Simultaneous categorization of multiple transactions

Budget date range customization based on users’ payday

A redesigned financial report page that allows users to customize the display of their financial data

A CSV upload feature allowing users to track multiple transactions simultaneously

User & business benefits

Better user experience may help users interact and retain in using the app and solve their problems.

User retention is vital for reducing acquisition costs, driving revenue growth, and ensuring long-term success (Cao et al., 2018; Inan et al., 2021; Rahi & Ghani, 2019b; Yuan et al., 2019; Zhang et al., 2014). Understanding the factors influencing user continuance is crucial for building loyalty and sustaining a user base, especially in a competitive market where retaining users is essential for profitability (Bitner et al., 2002; Huang et al., 2019; Shiau et al., 2020; Wang et al., 2019; Widiantoro et al., 2021).

The process

This study employs the design science research methodology (DSRM) which encompasses three iterations to understand and promote users' intention to continue using the Finku app.

1.

First, we built and assessed a behavioral model to understand what factors drive users' continuance intentions toward the app.

2.

2.

2.

Second, we pinpointed meta-requirements and design principles to implement in the app and solve identified issues specific to the Finku app.

3.

3.

3.

Lastly, we created a prototype of the Finku app that incorporates previously established meta-requirements and design principles.

Design science research approach.

Research

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The initial iteration of this study focused on gaining insights into users' continuance intention toward the Finku app.

A behavioral model was developed and evaluated within this phase, serving as the fundamental framework for forthcoming iterations. This behavioral model integrates elements of the Technology Acceptance Model (TAM) and the Expectation Confirmation Model (ECM), supplemented by variables encompassing trust, perceived risk, and social influence.

Designed and evaluated behavioral model.

We designed, validated, and distributed a questionnaire to test our hypotheses. Comprising 36 items to measure the various constructs within our behavioral model, the questionnaire also included an open-ended question, encouraging respondents to share any challenges they encountered when using the Finku app.

The proposed behavioral model was evaluated by applying partial least squares structural equation modeling (PLS-SEM), a recognized and effective approach for exploratory studies (Hair et al., 2019).

With 708 valid responses, results showed three hypotheses did not receive support: H1a (Perceived ease of use → Attitude), H1d (Perceived ease of use → Continuance intention), and H3 (Perceived risk → Continuance intention). Our accepted hypotheses indicate that users' intention to persist in using the app was significantly influenced by factors such as perceived ease of use (via perceived usefulness and satisfaction), confirmation of expectations, trust, perceived usefulness, satisfaction, attitude, and social influence.

Hypotheses test results.

Findings from the Importance-Performance Matrix Analysis (IPMA) underscore the importance of perceived usefulness in shaping users' intentions to continue using the platform, closely followed by trust and satisfaction. As a result, subsequent design iterations have been directed towards enhancing the application in these areas.

IPMA priority map for continuance intention toward the Finku app.

Recommendations from prior research related to the accepted hypotheses are detailed in the table as follows.

Recommendations for the Finku app based on the evaluated behavioral model.

Users’ perceived usefulness of Finku plays the most important role in influencing their intention to continue to use the app, followed by their trust and satisfaction with it.

Ideation

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We further collected data from the App Store, Play Store, Twitter, Reddit, online blogs, and questionnaire to understand common challenges experienced by users within the Finku app. We employed a thematic analysis to sort and categorize these issues into distinct themes based on the data collected.

Subsequently, we conducted a two-round Delphi survey to present and evaluate the coded issues, establishing meta-requirements and design principles for the Finku app. This Delphi survey, aligned with findings from the previous research iteration, led to 14 issues, which we consolidated into seven meta-requirements (MRs) and three design principles (DPs) to be implemented in the app. The issues encompassed aspects of the app’s front-end (eight issues) and back-end (six issues).

Derived app issues, meta-requirements, and design principles.

A set of meta-requirements (MR1-MR7) and design principles (DP1-DP3) was established to address specific issues related to the front-end (I1-I8) and back-end (I9-I14) aspects of the Finku app.

Design

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We conducted a benchmarking analysis of PFM apps such as Copilot, Truebill, Mint, and Acorns. Drawing upon the insights derived from these benchmarks and integrating them with the previously identified meta-requirements, we formulated functional requirements in the form of epics and user stories.

Six improvements were developed in the Finku app prototype guided by the defined meta-requirements to address specific user-reported issues.

Changes to the app's information architecture.

Changes to the app's information architecture.

App structure improvements.

App structure improvements.

Navigate Finku easier and easily manage your accounts, transactions, and financial report

The first enhancement implemented focused on refining the app's information architecture to address specific issues (I7 and I8) and fulfill MR3, which aimed to enhance the app's interface and information architecture for user clarity, ease of understanding, and relevance. Enhancements to the information architecture involved restructuring the homepage, consolidating the expense, budget, and bill pages, and introducing a financial report and profile page within the main menu. These modifications allow users to seamlessly interact with interconnected sections on a single page and effortlessly navigate to previously concealed pages within the app.

Exclude duplicate transactions from your financial report to ensure a more accurate financial report

The app prototype introduced a consolidated transactions page, merging the display of transactions, budgets, and bills into a single page. Additionally, the interface of the transaction details page was enhanced to facilitate users in efficiently managing transaction details. A new feature was also developed on the transaction details page to exclude inaccurately tracked duplicate transactions from the financial report.

These enhancements aimed to address various issues (I1, I2, I5, and I11) and fulfill multiple meta-requirements (MR1, MR2, and MR5), ultimately enhancing users' flexibility in managing their financial information, improving the comprehensiveness of displayed financial information, and minimizing errors and inaccuracies.

Transaction management improvements and new exclude transactions feature.

Transaction categorization improvements.

Transaction categorization improvements.

Categorize multiple transactions at once

The transaction categorization process was redesigned to simplify the simultaneous categorization of multiple transactions.

These enhancements addressed various issues (I2 and I3) and fulfilled a meta-requirement (MR1), ultimately enhancing users' flexibility in managing their financial information.

Create a budget and customize the date range based on your payday

Another addition to the app was implementing the budget date range setting functionality, enabling users to define their budgets' start and end dates. This enhancement effectively addresses the issue of inflexibility in budget management (I4) and contributes to resolving related issues (I6 and I8). These improvements align with the fulfillment of several meta-requirements (MR1, MR2, and MR3) aimed at increasing users' flexibility in managing their financial information, enhancing the comprehensiveness of displayed financial information, and improving the app's interface and information architecture for clarity, ease of understanding, and relevance.

Budget management improvements.

Financial report improvements.

Financial report improvements.

Easily set the date range and view of your financial report

Improvements to the financial report page enabled users to conveniently access the financial report page through the main navigation bar and customize the display of the financial report according to their preferences. This improvement addressed multiple issues (I5, I6, and I8) raised by users and fulfilled various meta-requirements (MR1, MR2, and MR3) identified during the development process.

Upload CSV files to track transactions from your financial accounts easily

A new functionality was introduced to enhance the manual transaction tracking feature by CSV upload. This feature enables users to easily track transactions in large quantities by uploading a CSV file containing their financial statement from their financial account. Although this functionality is not currently supported for automatic integration, it effectively addresses the issue of manual transaction tracking (I9). Additionally, related pages such as the financial account integration and detail page were redesigned to facilitate users in seamlessly integrating financial accounts manually and managing their integrated accounts effortlessly.

These improvements effectively resolve various issues (I5, I8, and I9) and align with several meta-requirements (MR2, MR3, and MR4), which aim to enhance users' flexibility in managing their financial information, improve the comprehensiveness of displayed financial information, optimize the app's interface and information architecture for clarity, ease of understanding, and relevance, and enable users to manage financial accounts that do not support automatic integration.

New transaction tracking feature: CSV file upload.

Results

Part 4:
Results

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We conducted usability testing and interviews with Finku users, asking them to perform tasks using the prototype and provide feedback compared to the app's current state. Using the Post Study System Usability Questionnaire (PSSUQ), the prototype demonstrated improvement in all four aspects of usability in the prototype when compared to the current app (lower PSSUQ scores indicate higher usability). Specifically, there were notable improvements in system usefulness, information quality, interface quality, and the overall PSSUQ score.

PSSUQ score of the prototype compared to the current Finku app.

All participants in the moderated usability testing responded positively, expressing satisfaction with the prototype's improved interface, which they found easy to comprehend and navigate, effectively meeting their needs. Furthermore, they perceived the prototype to be more useful than the current app.

"The prototype is better and is what I needed."

— Participant 1

"I like the design, it’s now easier for me to find what I need. The new features are also very useful."

— Participant 5

"The prototype looks better and is simpler and easier to use. This prototype meets all my needs, I don’t think I’d try any other app."

— Participant 3

Reflection

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The design science research methodology is a robust scientific approach that applies theory to design real-life solutions

As my undergraduate thesis, this study was an interesting experience applying scientific methodologies to UX design. The design science research approach integrated behavioral science to inform the design process. The study leveraged key theories from information systems alongside other scientific methods to guide the development of the final prototype, resolving prevalent user issues.

It was challenging to conduct the research and design process alone. Nevertheless, it was very interesting to analyze user behaviors and produce a design to address identified behaviors. This experience ignited my passion for future design research prospects and motivated me to continue and pursue a master's degree.

Prioritize optimizing core features rather than adding unnecessary ones

Perceived usefulness, followed by trust and satisfaction, is important in shaping users' intention to continue using the Finku app. The main focus of the improvements implemented in the prototype is user customization within core features of the app. By optimizing the app's core features, we observed a notable increase in overall user satisfaction during moderated usability testing sessions. This quite contradicted past strategies in Finku to attract users by developing gimmicky features that were rather unnecessary.

Consequently, after sharing these findings with our colleagues at Finku, most of these recommendations were implemented, leading to an increase in user retention.

Exploring the potential of gamification could be a promising approach to enhance user retention

This study offers valuable insights and recommendations for enhancing the UI/UX of the Finku app’s core features. Looking ahead, there is room for future research to delve into the potential of gamification in fostering users' continuance intention and engagement with the app. The exploration and enhancement of gamification within the Finku app later became my graduate thesis topic!

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All

Finku (2023)

Finku (2022)

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