Best User Onboarding Practices and UX Designs in Finance

In today’s competitive fintech landscape, effective onboarding is not just a nice-to-have - it’s a critical driver of customer engagement, satisfaction, and retention. Studies show that customers who are highly engaged are 90% more likely to make repeat transactions, spend 60% more per transaction, and generate three times the annual value for companies compared to disengaged users. This highlights why great user onboarding is especially important in fintech, where user trust and clear value delivery are paramount.

Successful fintech companies such as Chime, Robinhood, and Revolut have all demonstrated that a seamless, intuitive onboarding experience is key to driving user engagement. These platforms know that customer success starts the moment a customer interacts with the product. For instance, Chime's rapid growth has been driven in large part by word of mouth, with satisfied customers eagerly recommending the service to others. This organic growth has enabled the company to expand quickly without the need for a significant marketing budget. As Chime's CEO notes, the company is adding around 20,000 new accounts daily. 

But how can you replicate these successes? In this blog, we’ll dive deep into user onboarding best practices that can transform how users engage with your product. 

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Key Stages in the Onboarding Cycle

The user onboarding process can be broken down into several key stages, each serving a distinct purpose in guiding the user through their journey:

• Pre-signup: For fintech, this stage is all about building trust. Fintech products often deal with sensitive financial data, so building user confidence early is crucial. For example, Robinhood, a fintech company that connects bank accounts to apps, focuses heavily on security and transparency in their pre-signup messaging, assuring users their data is protected.

• Initial Sign-up and Account Setup: A frictionless sign-up process is critical. Robinhood does this effectively with its minimal input approach: users can get started by simply connecting their bank account to invest in stocks and crypto. It's a fast, clear path to unlocking core product value.
• Engagement and Activation: In finance, a great first experience often means helping users quickly set up and begin using key features, like budgeting tools or portfolio tracking, to give them a clear sense of control over their financial lives. Fintech apps like Monzo have mastered this by using interactive tutorials that guide users through their first few actions, such as setting up spending categories or linking accounts. This helps them experience immediate value. 
• Retention/Follow-up: Since acquiring new customers is 5 to 25 times more costly than retaining existing ones, nurture users after onboarding with personalized updates to ensure long-term success. 

By understanding these stages, you can tailor the onboarding experience to keep users engaged well beyond the initial introduction. Now that we’ve explored the stages, let’s discuss why getting onboarding right is so essential.

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Why is Effective Onboarding Crucial?

The onboarding experience in fintech is pivotal not just for user activation, but for long-term retention. 82% of enterprise organizations consider their onboarding strategy a crucial factor in driving value. A Compdata survey reveals that the Banking & Finance industry has an 18.6% turnover rate, making it one of the highest across all sectors. 

Onboarding matters in fintech because it establishes trust, ensures regulatory compliance, and drives immediate product usage. If users don’t see the value right away, or worse, if they feel overwhelmed with compliance requirements like Know Your Customer (KYC) or Anti-Money Laundering (AML) checks, they may abandon the app early. A seamless onboarding process reduces these drop-offs and helps users feel secure while understanding how the product fits into their financial category.

Having explored why onboarding matters, let’s now look at the best practices you can adopt to create an effective user onboarding experience.

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Best Practices for Effective User Onboarding 

Creating an effective onboarding process is crucial to ensuring users quickly understand your product’s value and are motivated to continue using it. The following are six best practices for designing a successful onboarding experience:

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1. Understand User Needs, Pain Points, and Compliance Requirements

Fintech onboarding must strike a balance between user needs and compliance. For instance, users of TrueLayer, a financial API provider, must verify their identity during the onboarding process due to regulatory requirements. By breaking up compliance steps into digestible chunks (e.g., identity verification after account linking), TrueLayer reduces friction while ensuring it meets legal obligations.

Example: Wise (formerly TransferWise) uses a multi-step, progressive verification process. They don’t overload users at the start, allowing them to send money right away, while gradually collecting necessary identification as the user engages more deeply with the product.

It's essential to not only understand your users' challenges and goals but also the regulatory requirements your company must adhere to in order to deliver on those needs. 

User Research:

• Surveys and Interviews: Conduct research to understand your target audience’s frustrations, challenges, and objectives. Also, assess how their needs align with your compliance obligations (e.g., KYC in finance).
• Behavioral Data: Analyze user behavior to identify friction in the process, and cross-reference with compliance checkpoints (e.g., identity verification, risk assessment).
• Customer Support Feedback: Review support tickets and inquiries to uncover common onboarding issues, and determine where compliance-related hurdles often create confusion or delays.

Compliance Needs:

• Regulatory Requirements: Understand the legal and industry-specific obligations your business must meet (e.g., GDPR for data protection, KYC fo

Once done, you can begin tailoring the experience for greater relevance and effectiveness.

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2. Focus on Immediate User Needs

Instead of overwhelming users with compliance requirements, you should prioritize solving the users’ immediate pain points. For example, when onboarding new users in Mint, an app that tracks expenses and budgets, the first interaction after sign-up helps users connect their bank accounts. This gives them an immediate overview of their financial picture and value from day one.

Example: Personal Capital helps users quickly track their net worth by linking accounts first, which gives them a tangible reason to stay engaged. 

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3. Progressive Disclosure and Contextual Preferences Gathering

Once the user has interacted with the core feature(s) of your product and is engaged, you can introduce preferences and compliance steps progressively. Avoid bombarding users with all necessary data at once. Take N26, the mobile bank, as an example: after linking a bank account, they don’t immediately ask for a full profile or additional data. Instead, they progressively introduce features like savings goals, budgeting tools, and notifications, once the user has started interacting with core functionality.

Behavioral triggers allow fintech apps to tailor the onboarding flow based on how users engage. For example, after a user sets up a bank account with Chime, the app might prompt them to set up a savings goal or enable direct deposit once they’ve made their first transaction.

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4. Create Contextual and Personalized Onboarding Experiences

One-size-fits-all onboarding rarely works. Instead, personalization is key to increasing engagement and satisfaction. Tailor the experience based on user data to make it more relevant and intuitive. Revolut personalizes onboarding by asking users about their financial goals—whether it’s investing, saving, or spending management. This information is used to tailor the user’s dashboard and offer personalized tips. This ensures that the onboarding process feels relevant and impactful, leading to higher user retention.

Personalization makes users feel valued and ensures that the onboarding experience is aligned with their specific needs.

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5. Provide a Quick Win Early in The Journey

Quick wins help users feel confident and motivated. These early wins are crucial for keeping users engaged. In fintech, a quick win might be linking a bank account, making an initial deposit, or setting up a goal that’s easy to achieve. For instance, Acorns, a micro-investing app, immediately shows users their first investment after linking a bank account. This instant gratification motivates users to stay engaged. 

Set Up Key Features First: 

• Quick Win: The first step after sign-up could be connecting a bank account or credit card. This is a quick and easy win for most users, and it provides immediate value by showing them a snapshot of their spending habits and account balances.
• Actionable Result: Right after they link their account, the app could display a simple chart or graph showing their monthly spending or income versus expenses. This immediately demonstrates the value of the app.

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6. Lead Users to their 'Eureka!' Moments

The 'Eureka!' moment is when users fully realize the value your product offers. Your onboarding process should be designed to guide them towards this moment as quickly and smoothly as possible. 

For instance, a ‘Eureka!’ moment in fintech could be when a user realizes how much they’ve saved or invested by using your app. Betterment, a robo-advisor, leads users to this moment by showing them a projected retirement balance after setting up a simple, automated investment plan. The app uses progress indicators and simple graphs to visually demonstrate growth, reinforcing the value of staying invested. 

• Identify Key Features: Focus on features that deliver your product’s core value and make sure users can access and use them early.
• Visual Cues: Use arrows, highlights, or step-by-step guidance to direct users to these value-driving actions.
• Minimize Friction: Eliminate unnecessary steps and make the process as simple and intuitive as possible.
• Personalized Onboarding: Tailor the onboarding experience to individual needs, showing them the features most relevant to their goals, and creating a deeper connection with your product.
• Progress Indicators: Incorporate progress bars or completion checklists to give users a clear sense of achievement as they move through key steps, encouraging them to keep going.

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7. Use Interactive and Engaging Tutorials

Interactive tutorials are an excellent way to engage users and ensure they understand how to use your product. Instead of static instructions or videos, walk users through tasks with hands-on experiences that feel like a guided interaction.

• In-Product Tours: Guide users step-by-step through the product, prompting them to interact with key features as they go.
• Gamification Elements: Include elements like progress bars, achievement badges, or rewards to encourage users to complete onboarding tasks.
• Task-Based Challenges: Present small challenges or mini-goals that teach users how to use important features in a fun and engaging way.

Interactive tutorials not only help users learn faster but also make the onboarding process more enjoyable, leading to better retention rates.

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Ongoing Education and Support for Users

Onboarding doesn’t end once the user has completed the setup. To ensure continued success, offer ongoing education and support that helps users deepen their understanding of your product over time. Webull, for example, offers a wide range of educational resources to help users understand how to securely connect their financial accounts and use the platform for advanced features like budgeting or loan applications.

• In-App Tips and Tooltips: As users explore more features, show contextual tips that highlight advanced functionalities or shortcuts.
• Help Center Access: Make your help center or knowledge base easily accessible for users who want to dive deeper into using your product.
• Webinars or Guided Sessions: Offer live webinars or on-demand video sessions that provide further insights into using your product effectively.
• In-App Chat or Support: Provide easy access to customer support, so users can quickly resolve issues or ask questions as they continue using the product.

By continuing to support users after the initial onboarding phase, you can ensure they stay engaged and feel empowered to use your product to its full potential.

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Elements of a Great User Onboarding Experience

A great onboarding experience makes users feel comfortable, supported, and motivated to explore your product. Here are key elements to include:

• Welcome Screens and Interactive Walkthroughs: The first point of contact is crucial. Use engaging messages to introduce your product and guide users through the setup. Make users feel at ease with clear, welcoming language and minimal design. For examples OppLoans with their simple onboarding screens.

• Checklists and Progress Indicators: Break onboarding into manageable tasks to help users track their progress and stay engaged. For example Grifin with their simple but effective air balloon progression bar.

• Tooltips, Pop-Ups, and In-App Guides: Provide contextual help without disrupting the user experience. These non-intrusive tools guide users to understand key features without leaving the product.

• Limit Information to Prevent Overload: Break onboarding into small, actionable steps, gradually introducing features as users become more familiar with the product.
• Maintain Consistent Branding: Ensure the design, tone, and messaging align with your brand to build trust and create a cohesive user experience.

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Strategies for Continuous Onboarding Improvement

User onboarding is not a one-time process—it needs continuous refinement. As user needs evolve and your product grows, onboarding must adapt to remain effective. Here are some strategies for ongoing optimization:

1. Use Analytics to Measure Success and Identify Friction Points

Track key metrics to understand how users are interacting with your onboarding and identify areas for improvement.

• Key Metrics: Track completion rates, drop-off rates, Time to First Value (TTV), and feature engagement during onboarding.
• A/B Testing: Experiment with different onboarding flows or features to see which changes drive better user activation and retention.

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2. Regularly Update and Improve Onboarding Flows

Onboarding is not a one-time setup; it should evolve as your product and user base grow. As new features are introduced and user needs shift, it’s essential to continually optimize the onboarding experience to ensure that new users receive the most relevant and effective introduction to your product.

• Incorporate New Features: As your product evolves, update the onboarding flow to showcase newly released features. 
• Monitor Industry Trends and Competitor Innovations: Stay updated on the latest trends in onboarding within your industry, as well as what your competitors are doing. 
• Respond to Changing User Expectations: User expectations shift over time. As your user base expands and market trends evolve, be ready to adapt your onboarding and meet new demands, whether that’s through more interactive elements or greater personalization.

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3. Stay Ahead of the Competition with Our Leaderboard!

Want to know how your onboarding process measures up? Our Leaderboard lets you see how top companies are innovating and optimizing their flows. It’s your go-to source for inspiration and insights to keep your edge. 

Regularly compare, adapt, and stay at the forefront of onboarding excellence. Don’t just keep up—lead the way! 

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4. Collect User Feedback

Both quantitative and qualitative data can reveal critical insights into how users perceive your onboarding process.

• In-App and Exit Surveys: Ask users to rate their onboarding experience and provide feedback, especially if they abandon the process early.
• User Interviews: Conduct one-on-one interviews or focus groups to dive deeper into users' experiences and identify pain points.

These feedback loops ensure that your onboarding process remains relevant and effective. Now that the strategies are clear, let’s get to the metrics you should be tracking to ensure onboarding success. 

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Key Metrics to Track Onboarding Success

To measure the success of your onboarding process, you need to track key metrics:

• Activation Rate: This measures how many users reach a key milestone (such as making a first transaction or investment). In fintech, a high activation rate is crucial for retaining users.
• Retention Rate: This is the percentage of users who continue using the platform after onboarding. For fintech, retention in the first 30 days is particularly crucial.
• Churn Rate: This metric tracks how many users stop using the product after completing onboarding. If churn is high, it could indicate that users are not deriving enough value from the product. 

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Conclusion

In the fintech world, where competition is fierce and users are incredibly discerning, personalization, simplicity, and value delivery during onboarding can make all the difference. By following these best practices—understanding user pain points, personalizing the journey, and ensuring regulatory compliance—fintech companies can reduce attrition, drive long-term retention, and build a loyal customer base.

Ready to optimize your fintech user onboarding? Start today by implementing these practices and watching your customer engagement and retention soar.