The Fintech industry is experiencing a purple patch, courtesy of a strong faith displayed by investors. Over the past year, the Fintech industry has attracted a record number of investments and this has allowed many startups to hit the ‘unicorn’ tag so quickly, despite pandemic disruptions. But, is Fintech really customer-centric, or for that matter does it really care for data privacy and security policies protecting customer data and personal safety? Although it has secured capital for continued growth, there is still an important box to tick off to ensure its long-term success in the fintech space– increasing client trust.
In 2021, the total capital investment in Fintech grew to $102 Billion. With investors pouring billions into the innovative tech visionaries, and predictions to reach a market value of $324B by 2026, the industry has never been in a more favorable position. That said, to continue growing upward, building stronger relationships with clients will be imperative, as even though many use Fintech services, research shows consumers need more reassurance when it comes to new-age financial solutions.
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It’s Crucial for Fintechs to Continue Educating Consumers and Gain Client Trust
A new study by Mastercard revealed that, even though over three-quarters of people in the US are linking their primary bank accounts to an external fintech account, only 14% admitted trusting the process. Similarly, consumers in Europe have also expressed concerns regarding fintech operations, this time questioning the process of ensuring data security.
According to Viktorija Mažūnė, Customer Experience Officer at ConnectPay, an online banking service provider, there are a few reasons that may be behind this. The most prominent one is that Fintechs had to pave the way through an already robustly established sector, which means confronting the long-standing notion of how banking services should be provided, in parallel challenging consumers’ understanding of banking operations in general.
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ConnectPay is an online banking service provider for internet-based companies, offering a wide range of payment solutions, including SEPA and SWIFT payments, IBAN multi-currency accounts, Corporate Cards, Merchant Accounts, and BaaS.
“As with all market newcomers, Fintech had a bumpy ride at first. Accustomed to traditional banking, people were cautious to trust financial companies describing themselves as an “Electronic Money Institution” or a “Payments Institution”. Also, many questioned regulations Fintechs are under and if their funds would be secure, even though they are held to the same regulatory standard as banks,” Mažūnė explained. “Over time, these preconceptions have reduced, however, it’s crucial for Fintechs to continue educating consumers about how they operate and the value they provide, to reassure and build trust.”
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The expert overviewed the pandemic’s impact on the matter as well, noting it had a noticeable effect on the perceived credibility of Fintechs. This, in turn, has opened new opportunities regarding client relationships.
“The pandemic changed peoples’ views, including the way they think about banking services. Sudden lockdowns forced even the big banks to move operations online, therefore, consumers that were loyal to brick-and-mortar also had no other choice but to follow,” she commented. “This shift only reinforced the notion of reliable and efficient online banking solutions for those hesitant to leave face-to-face services behind. What it also did is bring a previously untapped target audience—more open to the idea of Fintech—to the digital world, which the industry can leverage to build new, strong relationships.”
When it comes to establishing a deeper connection with the current customers, as Mažūnė noted, it boils down to co-creating user experience. Gaining insights directly from the client base allows addressing their specific needs and tailored solutions accordingly, building trust in the product and the process itself.
“During one of our recently conducted surveys, 92% of the customers reported that they are very satisfied with the support and relationship they have with us. The same survey showed that 70% of our customers are completely happy with the overall experience, while 30% were happy, but noted areas they would like to see improved, which is what we are doing—constantly refining our services based on our clients’ feedback.”
The biggest challenge, however, remains the same—navigating between compliance and seamless experience. “Robust regulatory policies are welcomed yet having no compromises on safeguards and still aiming to present the consumer with an intuitive and easy process can be a hard balance to find. Then again, it all comes back to trust and collaboration; by engaging in a dialogue with clients, we are in a more favorable position to strike a perfect balance,” she concluded.
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