Since the Global Financial Crisis, traditional banks have suffered from a loss of trust and loyalty. Bank culture has often been described as toxic, with self-serving business practices. Fintechs usually position themselves as ‘not being like big banks’ and offering a more customer-centric culture. However, most do not end up delivering such promise, as the technology and reformatted processes end up ruling the relationships.
Over time, some users question the rigid ways that Fintechs answer questions on usage, and issues that arise in any relationship. (Fintechs often try to save on customer interactions by relegating service delivery to chatbots that cannot answer nuanced questions.) If a Fintech’s ability to respond in a satisfactory and timely manner outside the established process is very limited, many customers will be left unsatisfied.
The rise of Fintech has enhanced convenience, experience, transparency and choice for customers, with the promise of better price, faster processing, better access, better service and peace of mind.
With the support of new technologies, Fintechs have been able to build a more direct and convenient relationship with customers. This has resulted in many new products, tailored to specific needs and new ways of distribution. It has also resulted in the public having more options than ever when choosing financial services.
The ease of building a Fintech means that barriers for new competitors to enter the market are low, and the market is getting crowded. Just as had been for the banks previously, technology alone will not be the answer.
Fintechs must know that reliance on technology or approaching technology merely to do things faster and cheaper is not enough. Financial services still are about trust and sometimes the technology is an impediment to build that trust.
More than just looking at the next tool, technology fad or system enhancement, Fintechs, like all companies, must consider first the true needs of the customer needs and then find the best way to deliver that. If the technology allows the fintech to deliver this service cheaper, better, and faster, then we are in the best of the worlds.