Fintech Revolution Of The Customer Experience: Applying The Lessons Learned
Understand how the Fintech sector revolutionised the customer experience and what lessons can be used to benefit other industries.
Published May 26, 2021
Last updated November 14, 2021
The old customer experience in financial services has been subjected to profound shifts that came on the heels of the Fintech uprising.
The Fintech industry has been famous for technology adoption, such as mobile applications and AI-powered innovations. With the support of this innovative technology, Fintech offered convenient solutions for customers, transforming the traditional in-person approach to a new digital-first concept.
Nowadays, traditional financial institutions are leaning on their IT departments to facilitate innovation, which was inconceivable just fifteen years ago. Meanwhile, Fintech startups are taking the central stage in previously established markets and fulfilling customer desires with a flexible, quick, transparent and personalised experience.
The drastic technology-led changes have set new standards for a better customer experience.
The question remains: How can other industries apply the Fintech lessons to stay a step ahead of their competition?
Change Drivers Behind The New Financial Services Customer Experience
1. Smartphones and mobility
Simplifying and moving the customer journey online was a big win for Fintech companies. Survey shows how customers value simplicity and availability — 73% of customers claim that they prefer to handle their financial dealings online.
Innovative companies such as Nubank the leading Fintech in Latin America, have stitched simplified banking into their company’s values. Judging by its 25 million customers, Nubank has succeeded to become a digital-first bank at scale.
Similarly, London-based Fintech company Revolut offers simplified mobile-based banking with no-fee global transfers and no- or low-fee spending abroad in over 150 currencies. Revolut embodied the ”on-the-move” customer mindset, which led to rapid growth from 2 million customers in 2018 to 15 million in 2021.
2. AI-powered conversations and automation
Chatbots and predictive analytics are improving customer experience across various industries, especially in Fintech. AI technology, such as chatbots, enables instantaneous communication for customers who prefer to practice mobile banking. At the same time, chatbots assure high availability through extended service hours.
For instance, digital-first bank Monzo uses AI-powered chatbots to inform customers about the most beneficial banking features and help them learn about finance management. Another great AI-powered Fintech example is Kabbage, an automated lending platform that uses online data instead of manual processes—to provide fast loans to small businesses.
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3. Self-service expectations
Consumers’ desires for self-service options are growing. During the pandemic, many customers have experienced the speed and efficiency of online self-service, including bank transfers, check deposits, loan applications and personal details alteration. Going to a physical branch to visit a bank representative had swiftly become reserved for extremely complex cases.
A successful example of a self-explanatory and easy-to-use Fintech offering is Wise (ex-TransferWise) – a money transfer service trusted by 10 million customers to move over £5 billion every month. Customers can use its online portal or mobile application to quickly and transparently move money in over 170 locations.
A similar application of self-serving is exhibited by Opendoor — a company that facilitates real estate transactions. Opendoor enables customers to make instant cash offers on homes through an online process. It cuts out any unnecessary steps to make selling homes easy, fast, and stress-free.
4. Omnichannel banking
Embracing the latest technology innovations and mobile-first approach means companies are increasingly working on providing a seamless omnichannel customer experience.
Customers are used to having information, service and products at their fingertips, which has fueled their expectation for an omnichannel financial service experience.
Innovative Fintech companies apply analytics to ensure customer service is aligned to customer expectation. This type of customer journey personalisation has become ever-present, and therefore — necessary to use going forward.
Mobile, online or social – customers expect to flip from channel to channel without any trouble.
What Can We Learn From The Fintech Revolution?
1. Deepen your understanding of customers
The Fintech revolution was impactful because it showcased using customer’s most significant pain points as a foundation for solution design. Other industries can learn from this lesson by learning from customers directly.
Leveraging next-gen technology such as chatbots can help companies collect data from each customer interaction to understand their needs better. Organisations can then use this data to enable customer behaviour and preference analysis and apply machine learning to build predictive models that will help meet and anticipate customer’s needs and desires.
2. Lighten the customer experience
Fintech companies revolutionised the financial service industry customer experience by offering the same product or service more conveniently.
Successful Fintechs alleviated the unnecessary steps customers had to take to make transfers and update personal details or process expenses. Now, customers can enjoy accessible banking at their fingertips from their own homes, whether they are transacting personal finances or doing business at scale.
3. Hyper-personalise the customer experience
As the Fintech revolution proved — AI-powered financial advisors can administer personalised investment advice based on the customer profile and financial goals. This type of service is hard to replace, as it delivers always available and personalised service at scale. For other industries to stay competitive, it’s crucial to apply hyper-personalisation to ensure customer loyalty and high lifetime value.
4. Innovate
AI and machine learning offer solutions through voice and chat that help improve the customer experience across various touchpoints, such as phone, online, mobile or chat.
For example, companies can use AI to improve customer service by reducing phone waiting times and physical queues. Eventually, companies that embrace the technology as their ally but keep the human-centric customer experience are the ones that will come up on top in the future.
5. Leverage partnerships
Traditional banks like JPMorgan Chase, Goldman Sachs, and Citigroup have invested in Fintech companies to expand their service portfolio.
The giant in the world of credit, American Express, acquired the automated lending platform Kabagge in 2020 – to extend American Express’ range of financial service offering to their shared target customer.
In the future, organisations should consider sharing opportunities with technology-powered startups. At the beginning of their journey, most startups don’t represent a severe threat, but that doesn’t mean they won’t become one, especially if we consider customers changing preferences and attraction toward convenience and ease of use that technology enables.
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