Whether due to pandemic-related factors or consumers’ ongoing desire for more convenient banking options, the fintech sector is booming. In the first quarter of 2022 alone, venture capital investments in fintech startups topped $29 billion, and the median pre-money valuation for late-stage fintech companies hit $257.5 million. That’s 44.5 percent more than 2021’s full-year figure. With all of this in mind, fintechs seem poised to dominate the financial market in years to come — so long as they can continue to compete with more-established financial institutions where it matters most: customer experience (CX).
FinTech Insights: Rising Prominence of Fintech Cloud and the Road Ahead
Unfortunately, many fintech startups view customer experience as somewhat of an afterthought to the “big idea” when they’re just starting.
The big idea is nothing if it can’t meet customers where they are. Startup leaders across industries, but especially in the fintech space, must understand that their success is not contingent upon having the best idea or the most innovative model. Rather, short- and long-term success for fintechs rests almost wholly upon their ability to exceed customers’ expectations from day one.
The Core of Customer Experience in FinTech
Building good CX takes time, and it means something different to every company. However, there are a few key elements of CX that neobanks and other fintechs should consider when designing their experience:
Customers turn to fintechs for convenience. The ability to move funds quickly, get an early payday, or create a budget right from their phones is what grabs them, but an inability to resolve their issues is what will lose them. With more and more of these businesses entering the market every year, and each offering similar if not identical services, customer retention often comes down to the level of support customers can expect from the company.
Customers want to be able to access service members in the ways that work for them.
Fintechs should prioritize the development of a robust multi-channel, hybrid approach to customer service that includes traditional channels (like phone and email) alongside digital options like online chats, messenger services, and social media accounts. Fintechs should ensure that all of these options are available and adequately staffed from day one and that customers are aware of the available options.
Part of making service accessible is personalizing the CX to each customer’s needs. Using customer data effectively can yield benefits in customer retention and experience building. Understanding your customer base has always been the foundation of good CX, but modern fintech users expect providers to go above and beyond.
Most people these days understand that banks collect data about their habits, preferences, and needs. They expect that information to inform their experience using the product and with the company’s representatives. Fintechs that aren’t taking advantage of that will fall behind those in delivering effective customer experience to consumers.
Top FinTech Insights: Embedded Finance Explored: How Financial Institutions Can Navigate New Territory
Once a fintech has considered how people will be able to interact with their teams, they must turn their attention to training those teams. Providing knowledgeable and comprehensive service is key to curating exceptional CX, especially for fintechs. Consumers are trusting fintechs with their money. It’s a huge ask — especially without offering the comfort of meeting a person face to face can provide. Digital or phone-based CX is the only point of contact that many users will have with the company, so it must go above and beyond their expectations.
Companies may want to invest in voice monitoring software that can identify escalating interactions for rerouting to a human or a more senior member of the service team. Once a person is speaking to a human representative, their problem is likely too complex for automated systems to handle, and service representatives should keep that in mind. The goal of every interaction a customer has with a fintech’s customer service touchpoints should be to make the customer feel understood and supported. They should feel the service rep is their partner in problem-solving rather than an obstacle.
How to Compete in the Fintech Space with Customer Experience Management
Ideally, fintech startups should consider all of the above before building their business. The smaller a fintech is when it begins designing its customer experiences, the more effective and tailored to its consumer base those experiences will be. Starting small can help these companies understand their unique needs, desires, and pain points when that user base is still manageable. With that foundation set, a company is more prepared to scale its CX operations to meet changing needs as the platform grows. Luckily, those that wait until later in their journey can make up the lost ground. One of the most effective ways for an existing business with an existing customer base to build better CX is to partner with a trusted expert in the industry.