Remove Friction From the Customer Journey – Top Trends in Fintech
Adapting banks and credit unions to the fast-paced digital world is not without challenges. For some, adaptation is not only about continued future success, but how to respond in a quickly changing financial landscape. The rise of fintechs has proven that financial services transactions can be done with less friction and frustration along the customer journey. Customers have higher expectations and want services that are fast, seamless, intuitive, and easy.
In their report, The US Banking Customer Experience Index (CX Index™), Forrester measured how well a brand’s customer experience strengthens the loyalty of its customers. The latest report demonstrates that for retail and direct banks, there is a correlation between revenue and a higher CX Index Score. Increasing an already excellent CX Index score by one point drives revenue potential four times as much as increasing a poor CX Index score by one point.
Stagnation in most banks’ scores means that customers don’t think experiences are improving. The report finds many banks scores bunched up together in the middle of the pack, pointing to the potential problem of differentiation. Yet, fintechs have made incremental gains and are reaching a critical mass by setting new standards for innovation and customer experience.
Here are three top trends fintech which are contributing to high CX Index scores:
The introduction of smartphones has been a game-changer for managing finances. Going to your local bank branch for transactions is becoming a thing of the past. By 2022, consumer visits are expected to reduce by 36%. At the same time, mobile transactions are projected to grow by 121%, eventually composing 88% of all banking transactions. In fact, 36% of smartphone users are planned to use payment apps in 2019, a 13.5% increase year over year. It is estimated that 61.6 million people in the US will be making mobile payments this year alone.
Fintechs are taking advantage of this continued shift to mobile, introducing mobile accessible services that improve accessibility to users but also simply the user experience. The integration of near field communication (NFC) devices and QR scanners at many points of sales (POS) are making mobile transactions much more convenient as its popularity continues to grow. Through their new business models, fintechs can often compete at a lower or innovative pricing model which further attracts consumers to try the new and innovative services.
Artificial Intelligence (AI):
Artificial intelligence (AI) is having impacts across society and the economy as the technology continues to develop and improve. PwC considers AI to be “the biggest commercial opportunity in today’s fast-changing economy” and estimates the technology to represent 14% of GDP growth by 2030. This means that by 2030, AI could contribute $15.7 trillion to the global economy. More than the current GDP output of China and India combined.
Fintechs have leveraged AI as the underpinning of solutions ranging from financial planning tools, to how they support their customers. AI has allowed fintechs to offer a broader option of customer support channels, around the clock, enabling them to address their customer needs and provide a superior customer experience. Gartner reports that by 2020, AI-powered virtual customer assistants (VCA) and/or chatbots will take over 25% of customer assistance and maintenance services.
Companies that build AI as a part of their expertise will be able to take advantage of incremental opportunities to use it securely, innovate and strengthen their operations. Implementation of AI in fraud detection, process automation, maintaining the supply chain, managing the risks of cyber attacks and making the financial sector work more effectively by eliminating human intervention
Internet of Things (IoT):
PwC predicts that by 2020, more than 50 billion devices (“things”) will be connected, and, in the same year, forecasts that IoT revenue will exceed $3 trillion. IoT is transforming the way consumers, businesses, and government interact with the physical world. The ability to electronically monitor and manage objects makes it possible to bring data-driven decision making to new activities. This creates an opportunity to optimize their performance which will drive increased time-savings for people and businesses. Optimistically, it is believed this will improve our quality of life.
With the integration IoT, fintechs are enhancing data protection and improving customer service and experience, while wearables are becoming a powerful branding tool. Wearable devices are furthering accelerating the trend of mobile, enabling fintech customers to perform digital payments and other mobile financial transactions.
Fintech may be at the forefront of innovation and re-invention of the customer journey, however, many of the trending technologies are still in their developmental stages. Established financial institutions and start-ups alike will need to embrace and integrate these emerging technologies to streamline processes.
One completely customizable offering to help financial institutions reduce friction comes from Digital Onboarding, which aims to turn account holders into profitable relationships by ensuring new customers and members activate and fully utilize the new accounts they sign up for. Banks and credit unions invest hundreds of dollars to get someone to open a new account, yet, between 25-40% of new accounts get closed within the first year. Reducing attrition by even a few percentage points makes a significant impact to the bottom line. Leveraging machine learning and digital channels, including email and SMS, Digital Onboarding makes it simple for financial institutions to customize journeys for new customers and members, encouraging them to convert. The flexibility of the types, timing and content is impressive.
Meanwhile, Voleo is opening a new channel for customer acquisition through a white-label investment platform, which is available for turnkey partnership or traditional license. Our collaborative investment platform is driven by teams, and on each an average of 14 invitations are sent with 10 people accepting. The extremely high acceptance rate showcases how removing friction from the registration process increases conversion. Each person represents a qualified lead enabling financial institutions to offer proprietary products and core banking services.
Across the financial sector and beyond, collaboration is becoming one of the most important ways to delivery new customer-focused technology. Is your organization currently collaborating or considering to collaborate with a fintech? We’d love to talk! Reach out to us at firstname.lastname@example.org.