How are Fintech banks reinventing customer service?
Fintechs - a mash-up of financial + technology - have been shaking up the traditional banking sector for more than a decade now. While the movement is ground-breaking, the thinking behind it is incredibly simple: make banking easy and accessible for everyone by taking it digital.
This hugely impacts the customer service aspect of money management as we know it. It means that without stepping foot inside a bank, the everyday customer can carry out transactions large and small, send and receive money, lend or borrow, invest, pay bills and more, and be completely in control of their own transactions. No more big bank fees attached for simple services, no more paper-pushing or tricky approval processes, and no more middle men to work around.
Being able to carry out these transactions without a traditional bank account is one of the most important aspects of fintech platforms. It’s leveling the playing field in terms of financial inclusion, and ensuring universal access to financial products and utilities that were previously out of reach for people in emerging economies.
The face of fintech customer service is evolving. Fintechs don’t require physical locations, which helps them to keep their overheads low. But this doesn’t mean that the human element of customer support can be completely forgotten though: customers want and need a little love and attention.
Who’s using fintechs?
According to the Federal Reserve, 22% of American adults are either unbanked or underbanked: that’s 63 million people who have no choice but to rely on alternative financial products, such as payday and pawn shop loans, to get by. By lowering the entry barrier, fintechs are empowering these people with access to financial products that were previously out of reach.
Decision-makers in all income brackets have opened new fintech accounts, but the highest penetration was among high and low income groups. McKinsey found that 45% of people earning more than $100,000 and 41% of people making less than $25,000 per year use fintechs.
While fintechs are enabling people to bank better, faster and more conveniently than ever, the fintech customer experience is key to the sector’s success. This article explores in depth how fintechs are challenging the status quo, the differences between fintechs and traditional banks, and what’s in store for the future.
What matters when it comes to managing money?
Ease of use, convenience and accessibility have won the market for fintech customers, but just like traditional banking, trust remains key to the future success of the sector.
The customer experience in traditional banking has long centered around trust, and understandably so. The typical customer would be entrusting the bank with their life savings, salary deposits, mortgages and other big-ticket money moves. A recent study by McKinsey found that fintechs are catching up with traditional banks in terms of customer trust. While 30% of financial decision-makers said the reason they would choose a traditional bank was trust, 27% indicated they trusted fintechs more.
The report went on to reveal that fintechs surpassed traditional banks in terms of speed, convenience, innovation and more, confirming that the new players are levelling up - and doing so quickly.
What changes have fintech banks pushed the entire banking sector to implement? How have traditional banks responded to this?
Fintechs aren’t going anywhere, and traditional banks have been advised by some of the world’s most notable consulting firms to join the movement rather than fight the tide. Previously promoting exceptional customer service and trustworthiness as their key characteristics, traditional banks are increasingly, product innovation has become the priority.
Banks have been forced to transform their core infrastructure, with the aim of being more dynamic and accessible. Apps that allow transactions to be carried out at any time and from any location have been just the tip of the iceberg. In recognizing the threat the fintech customer experience posed, banks have begun to partner with fintechs, invest in them and even model themselves on them.
There are many examples of traditional banks stepping up their tech game to compete with the elements of the fintech customer experience that have made the sector a success. The Royal Bank of Scotland created Bo to help customers manage money better, ING’s Yolt gives customers an easy overview of their finances, and Goldman Sachs launched Marcus, a consumer digital savings and lending operation.
How have the customer's demands changed in recent years and what will the future look like, from this customer experience/customer service point of view?
A Deloitte report from 2020 recognised the changing demands of customer, finding that in a post-pandemic world, 96% of consumers preferred digital transactions for their day-to-day financial needs.
While the disruptor darlings are favoured for slick interfaces, speed and efficiency, fintech customer service is a huge element that can’t be ignored by developers and organisations. The human touch is still important to consumers, and fintechs have the challenge of achieving this without a bricks-and-mortar set up that allows customers to visit a physical location and experience face-to-face interactions,
Making fintech customer support a priority has won positive feedback for Saldo, confirming that customer service is just as important as it was in the past. Saldo makes itself available to customers via phone, email and customers frequently make use of being able to chat with customer service representatives.
What stands out to existing customers, according to feedback received, is the know-how of the operators who tend to be able to solve an issue on the spot, without forwarding a call to someone else. It’s a good thing too: a study by McKinsey found that not being able to provide a quick solution to a trouble-shooting question was likely to lose a customer faster than any other issue they might face.
The future of fintech customer service
As the sector continues to evolve, solutions are coming thick and fast, and in many formats. While some traditional banks are joining with fintechs to complement the offering, others - such as Saldo - are actively listening to their customers to understand exactly what it is they want, allowing them to define their own fintech customer experience.