Consumers are ready to embrace innovation in the financial services industry and there are more than a few fintech startups ready to supply it.
As of 2021, there were nearly 11,000 fintech startups in the Americas, more than any other region. Consumer adoption of fintech services has moved steadily upward, from 16% in 2015 to 64% in 2019. And the global fintech market is expected to grow at a compound annual growth rate of 23.58% from 2021 to 2025, leading EY to report that, “although some challenges have yet to be overcome, it seems that growth in the fintech space steadily continues.”
What’s driving the fintech digital transformation boom?
Perhaps the biggest challenge stemming from the proliferation of these financial technology solutions is the pressure on fintechs to demonstrate profitability to investors. No longer are proof of concept or the ability to generate demand sufficient barometers of success. Increasingly, investors are looking for more consolidated operations that reduce costs and increase efficiencies.
As services such as PayPal, Venmo, and Stripe become commonplace for a large swath of consumers, the focus for fintechs is turning from finding new audiences to engaging and retaining their customers to ensure the long-term profitability of their brands.
As the fintech market matures, many principles of digital transformation that have been applied to other industries are taking the forefront. These include how to: register users more quickly and securely, automate parts of the customer journey for speed and efficiency, create a 360-degree view of the customer, and communicate at scale while retaining the human touch.
4 ways fintechs can use digital transformation to become more profitable
1. Faster and more secure registration
Many fintechs use a freemium or self-service model to allow prospects to engage with their platform with the hope they will upgrade to a paid experience. Therefore, creating a smooth and frictionless experience at this stage of the journey is critical to ensuring the customers who try out your platform will stay with it.
Security solutions such as silent mobile verification, two-factor authentication (2FA) and SIM swap checks are necessary for any digital payment or processing platform, especially during the registration phase.
- Silent mobile verification works in the background to instantly verify users based on their mobile phone number. This eliminates friction during the registration process and enables secure log-ins without interruption.
- Two-factor authentication is a security process that requires the user to provide a second means of authentication in addition to their user name/password, to prove that they are who they say they are.
- SIM swapping occurs when cyber criminals request a new SIM card from your mobile operator and transfer your existing phone number to a new SIM to steal data, money, and even identity. SIM swap solutions check for any changes to a user’s mobile identity by confirming the account’s activation date to stop illegal SIM swapping.
Users have come to expect experiences that verify their identity and understand it’s necessary to keep their transactions secure.
Learn more about how fintechs are using mobile identity solutions such as silent mobile verification and SIM swap checks to keep transactions secure.
2. Chatbots to improve the service experience
Ensuring scale without increasing support team headcount is one of the biggest challenges for any startup. Increasingly, chatbots are being used to lessen the burden on call center and tech support teams.
Many issues common to new customers can be automated, freeing up valuable support resources to focus on engaging customers with new products and solutions. Research suggests that companies can reduce customer service costs by as much as 30% by using a chatbot solution.
- Automated chatbots can be used to:
- Answer common questions from users
- Update users on the progress of requests or support tickets
- Encourage users to complete the registration process
- Remind users about invoice payments
- Offer loan and financing tools and calculators
- Recommend products/services
- Promote financial education
Today’s chatbots can deliver highly personalized conversations that maintain context between channels and service agents.
Learn how AI-powered chatbots are bringing a new level of automation, speed, and availability fo fintechs.
3. Customer data platforms for more targeted communications
One way to maximize existing customer relationships is to offer cross-sell, upsell and referral opportunities so that customers derive greater value from your solution, use it more often, and become brand ambassadors in the process. In a recent survey, of millennials (24 – 40-year-olds), 71% said they get frustrated if their banking experience is impersonal and 72% said they would tell six or more people when they have a positive experience.
Before you blast customers with campaigns for features and tools that may not be relevant to them, it’s important to establish a single platform for understanding their financial interests, needs and life stage.
A single customer data platform (CDP) allows you to centralize all of your users’ information (regardless of how it was collected within your system) and create segmentation lists based on behaviors, demographics, and usage/purchase history of the products you offer.
With this information in hand, it becomes much simpler to customize campaigns that will resonate with specific user pain points. Having this understanding of user interests also helps guide the creation of new products and services based on actual customer data.
Learn how a CDP can connect insights from all your touchpoints to unlock a 360° view of your customer to target specific opportunities for upsell and cross-sell.
4. Greater conversational experiences across digital channels
Well-structured communication flows are essential for engaging customers throughout their journey with your product. Increasing customer engagement leads to more conversions and a greater ROI. To create conversational customer experiences: choose the channel that best suits your customers’ preferences (email, SMS, mobile push notifications, etc.); identify behavior triggers, actions, or segments; and learn when consumers are most likely to see and respond to your message.
This information allows you to customize and contextualize each message you send to increase customer engagement and action which leads to increased profitability.
When choosing the best omnichannel communication platform for your fintech, it’s important to consider:
- Channel availability: Does it incorporate all of the channels your customers use most, such as SMS, push notifications, in-app notifications, email, and WhatsApp?
- Data integration: Does it integrate with your CRM, ERP and contact center?
- Channel integration: Does it support an omnichannel strategy (all channels are connected through one engagement hub) or just multichannel (with limited flow of data and contextualization between channels)?
- Ease of use: Is it easy to create new messaging flows through a drag-and-drop design without the use of a programmer?
- Messaging cost scalability: Can the platform handle demand peaks or increases in your base without overcharging for your growth?
- Compliance: Is the platform secure? Is it continually updated to reflect changing industry regulations? Does it work to decrease the complexity and cost of compliance?
Learn more about Infobip’s global communications platform, with the most popular customer channels natively integrated so you can manage all touchpoints, automate processes, and analyze results from one customizable dashboard.
With the added heat on fintechs to demonstrate profitability in today’s hyper-growth market, automating operations to increase operational efficiencies and customer engagement is a natural next step for growth, so you can focus on improving your core business functions and delivering ROI.
Elevate your financial CX