All previous records of annual FinTech financing volumes were broken in 2018, with the 2018 YTD figure standing at $43.1 billion in total volume. FinTech companies around the world are redefining the financial services customer journey. Through the creation of faster processes and low-cost, personalised products that align with customer goals, delivery of agile technologies that are exceeding expectations and through enhanced transparency and free services, these companies are raising the bar even for traditional financial institutions.
The World FinTech Report 2018, by Capgemini in association with LinkedIn, establishes one major factor among many others behind the 2018 FinTech success – the creation of trust. This is one of the most critical customer-centric activities for any company to bank upon.
Maintaining the Balance between Credibility and Visibility
FinTech companies deal with people’s livelihoods; cash, credit, assets and savings, which makes it important for trust to be established. Now, a major debate that firms in this sector get into is the “Credibility vs. Familiarity” dilemma. Credibility, however, often comes second to better visibility and growth-at-any-cost exercises by financial services companies.
Extensive marketing budgets help brands figure high up everywhere; from billboards to Google search engine rankings. But, increased familiarity cannot be confused with credibility. A financial brand’s long-term success is, to a large extent, dependent on demonstrated success. How well do these businesses manage people’s money? How are they educating investors against risk? How prompt are they in their customer service department?
Enhanced visibility might be beneficial for short-term growth, but real success is in establishing customers as the primary brand ambassadors.
Financial Returns Can Be Assessed Objectively
A consumer’s decision regarding non-financial products is based upon subjective choices, influenced to a large extent by brand awareness. Financial returns, on the other hand, are hugely measurable. Platforms that give better returns will figure high on the customer’s list and will attract new customers as well. The 2016 Edelman Trust Barometer Study found that when customers trust a business, 68% are more likely to buy its products or services and 59% will even recommend them to a friend or family.
Changing Customer Demographics
The financial landscape is evolving at a rapid pace. A majority of millennials are approaching their prime investing years now. At the same time, this generation has some of the highest levels of student debt and are concentrating on high-income generating careers, before aiming for traditional goals of raising families and buying houses. Traditional institutions like banks are failing to adapt to the needs of today’s customers and are unable to provide products better suited for them. It should, therefore, come as no surprise that millennials have less faith in the banking system than the previous generations.
FinTech companies need to establish credibility with this demographic, if they want to position themselves as the investment service of choice. One particular area where they already score higher than traditional institutions is the prevalence of emerging intuitive technologies; something that this digital-savvy generation prefers.
Evolving Technologies are Easier to Adopt Through Partnerships
You cannot simply offer a technology and expect widespread adoption amongst the masses. If that were true, disruptive tech like blockchain would have made traditional finance mechanisms obsolete. Newer technologies mean additional skepticism and, therefore, greater efforts for trust-building.
Right from bringing in top talent with relevant skills to making strategic investments in operational excellence, a lot goes into making a technology acceptable. Evolving technologies need stronger security infrastructure, which protects investor money and private information.
In recent years, we have seen that customers trust collaborations between traditional banks and FinTech innovators. There needs to be a greater understanding of how each sector can contribute towards global financial inclusion. Banks have established customer bases, distribution infrastructure, regulatory compliance and capital, but cannot provide freedom from the tedious legacy systems. On the other hand, FinTech companies have vast agility to launch superior systems that focus on the customer experience. A strategic partnership will create greater brand recognition.
It is essential for FinTech brands to establish credible websites and social media profiles with a good number of followers. Customer experience can be made unique through sleek UI and UX. Next is providing useful and original content that is relevant to the target base. The aim is to create a transparent brand that provides incredible services.