Metrics for a Fintech Company

Metrics for a Fintech Company

The focus of this article will be going over recommended metrics for a fintech company. This article assumes you have a background knowledge of the topic, but if you don’t I recommend reading Introduction to Metrics; it’s short and illustrates the thinking process your company should go through before jumping straight into setting KPIs. I also recommend reading Metrics for a Software as Service (Saas) Company since there are many relevant KPIs that can also be used in a fintech enterprise given the medium is also digital (for example the metrics found in the Valuable and Prompt Technical Solution section).

Fintech is the segment in which companies provide financial and banking services using modern technology. This means that in most cases the strategic objectives of the companies operating in this sector will be focused on reliability, sales, and acquisition and retention.


Given fintech companies provide their service or product (ex. credit card reader) through modern technology, reliability is one of the most important factors they should be looking at. Aside from metrics such as mean time between failures, mean time to repair, bug detection and the other metrics reviewed at Metrics for a Software as Service (Saas) Company, other suggested metrics are the number of abandoned registration and payment sessions and the bounce rate. Reviewing when and how many cancellations occur, can provide an insight if they happened during a technical issue with the solution or if they are happening at a certain step that’s proving to be too confusing, time-consuming, or problematic for the user. Checking the analytics on the bounce rate could detect that there is a need for a better design and user experience at the landing or home page. A high bounce rate could mean people are taking a glimpse at one page of the website and leaving uninterested.


Fintech companies are a popular option against the big financial and banking services providers due to their flexibility, innovation, and pricing. Although the business may be selling well and gaining a strong market share it’s important that it keeps track at how valuable its sales really are. It should first take a look at the average revenue per user, the formula being:

Total Revenue / Number of Transactions

Like with all analysis, this can be filtered as much as the company wants to; for example, narrowing down the average revenue per user by product or service. This would allow the business to know which line has the users providing the highest average revenue.

It’s also a good idea to complement the indicated formula with the average transaction value, obtained by:

Total Revenue / Number of Transactions

And the average transaction per user:

Total Number of Completed Transactions / Total Number of Users

All three results could be presented in the same dashboard (note to self…make a post about How to Present Metrics) since they provide a different perspective of what’s actually going on with sales.

Acquisition and Retention

We’ve taken a look at customer retention, but if the company wants a different approach for the same insight it can see how many customers it’s losing per month by analyzing customer churn:

(Total Customers at End of Period – New Customers) / Customers at the Beginning of the Period

Whether to use customer churn or retention would all depend on the perspective that conveys the message better for the target audience. Do they want to see how many customers they lost or how many they kept? My recommendation is that if the company is having an issue because they are losing customers they should focus on customer churn; on the other hand, if they have a strong client base they should stick with customer retention just to make sure every month that they are still doing a good work at keeping customers.

If the operations are not cost-efficient selling more could actually prove a detriment. To make sure sales are efficient and there is a control over costs the business can measure on a monthly basis the cost per acquisition:

Cost of Sales (including marketing, technical, and product costs) / Number of Acquired Customers

The tendency should be for it to decrease, which would mean either a reduction in costs or an increment in customers while maintaining costs at around the same level.

Lifetime Customer Value

There is one more metric that is noteworthy to mention for companies that have solid operations and sales and are looking for a deeper understanding of its customers. The metric is Lifetime Customer Value, it is important because it considers both sales and retention. The basic formula is:

Subscription Fee * Expected Time Period of Subscription

I mention that this is the basic formula because it can have various degrees of complexity. The simplest scenario would be one where the customer has paid in advance for one or two years of service. A little bit more complex would be if there are industry estimates of how long customers stay and the company prefers to use this number. Finally, for a more personalized number the business can multiply those industry estimates times its retention rate to obtain the expected time period of subscription. Obtaining this number doesn’t only provide a metric to measure performance but it can also be used for financial planning purposes.

Miguel Morales

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