Over the past few years, fintech start-up investments across the world have increased rapidly by the hundred billions with the US, China and the UK leading the way. These record-setting investments indicate the high level of interest by venture capital firms to try new services and fund them, but it means standing out in a crowded marketplace is a major challenge.
The fundamental goal of many fintech start-ups is to become a disruptor while building a business that commands a high valuation. One start-up’s success that many strive to replicate is TransferWise. With more than six million global customers and a $3.5 billion valuation, it’s easily the gold standard of fintech.
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One of the key elements behind TransferWise’s success was its ability to showcase online reviews and ratings to potential investors and present itself as fulfilling the need of customer satisfaction. This is why Trustpilot conducted a study outlining how online reviews are increasingly used by fast-growing fintech businesses to show investors their appeal as well as secure more customers.
Persuading a prospective customer that a new competitor is trustworthy is a challenge, especially in the fintech sector where customers’ savings and future financial health can be at stake. Although fintechs can point out that they operate in a highly regulated industry, many say that their most effective message is the reassurance offered by existing customers giving their service a high rating or a good review. The importance of the customer experience outweighs innovation in the eyes of start-ups and the most important way to highlight customer experience is through online reviews and ratings.
Nearly 66% of fintech companies that took part in the study strongly agreed that a reputation for openness and transparency is crucial for their brand. A similar percentage of 65% strongly agree that they have built their business around an understanding of what customers really need. To achieve this, they need to take control of their ratings, listen to feedback, act on it, improve their offering, and encourage users to rate them so their scores evolve and more new customers sign up.
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When businesses understand the need for positive and transparent feedback from their customers, they undoubtedly become more valuable to investors. Nearly 31% of the start-ups and scale-ups that were surveyed stated positive reviews and social proof are ‘critical’ for generating interest from investors, and a further 52% said they were important. Around a fifth (21%) of start-ups and scale-ups surveyed have been asked by investors to provide customer centricity proof points such as ratings and reviews, but a further 43% have proactively quoted social proof such as ratings when dealing with investors.
The research shows that a great customer experience rates above innovation, brand awareness, and price when it comes to winning. This means that ratings are a crucial tool in achieving fintech companies’ top-line strategy of both attracting new users and accessing the necessary investment to deliver on their vision. The conclusion is that online ratings help create unicorns. To catch the complete study – The importance of social proof in fintech.
