Bridging the trust gap in fintech
TrendsFintech & Financial Services
The financial technology market is on the rise. According to Market Data Forecast, fintechs are expected to reach a market value of roughly $324 billion by 2026. But while the industry continues to experience steady growth, the progress isn’t made without its share of challenges.
There remains a degree of skepticism among consumers. A Bank for International Settlements (BIS) survey published in May 2021 found that most people feel more comfortable with banks than fintechs, believing they are more equipped to protect their personal data.
Uncertainty regarding unfamiliar technologies and recent headlines emphasizing data breaches, has led to some hesitation. Increasing fintech adoption will depend on how well brands can bridge this trust gap. Fortunately, a strong customer experience (CX) strategy can help address some of the more common concerns.
Emphasize trust, safety and security
Data breaches are on the rise across all industries. A report from Risk Based Security found that over 37 billion records were compromised in 2020, a 141% year-over-year increase. 2020 also saw the highest number of records exposed in a single year since 2005.
Consumers want reassurance that their personal information is secure, especially when it relates to their finances. A robust fraud detection and prevention program, with the right processes and controls in place, is key for fintech companies looking to build trust. Advanced Know Your Customer and identity verification features, such as two-factor authentication, voice match recognition and face verification can complement end-to-end encryption in an effort to keep consumer data safe.
Communicating these efforts, along with data-use transparency, can go a long way in earning and retaining customer trust. Throughout the customer journey, there is an opportunity to be proactive — show empathy for typical customer concerns, outline key security features and describe how customer data will improve their experience. Bringing your security initiatives to the forefront leaves little room for doubt.
Educate and empathize with customers
Fintech companies are a relatively new phenomenon and don’t necessarily have the same level of brand recognition as traditional financial institutions. This is particularly true for older generations who may prefer in-person transactions over banking on a mobile device — let alone making a bitcoin investment!
A general unfamiliarity with the industry’s latest technology makes it even more essential for fintechs to offer appropriate training and education to increase transparency. One way to combat this is through on-demand educational content like FAQs, tutorials and Wikis that consumers can read through to gain a better understanding. Additionally, having empathetic support staff willing to go the extra mile to explain and educate wary customers on things like ‘how to make an investment using the app’ can serve as a significant differentiator. Brands that offer customer-centric service and content that is communicated in plain language will narrow the trust gap and entice new customers.
Personalize CX delivery
A personalized approach to the customer experience helps to establish rapport and develop deeper relationships with consumers. Fortunately, the technological foundation that fintech companies are built on can help address this need. Brands can gain a better understanding of customer expectations from the data collected across multiple digital touchpoints and then apply these learnings to deliver service in a more meaningful way. For example, by using predictive analytics to suggest relevant products and solutions that meet a customers current investment or savings goals.
Personalizing the customer experience is an integral part of building confidence, as long as it's coupled with a strong trust, safety and security strategy. If a fintech brand is not honest and accurate about how consumer data will be used, then it could do more harm than good. Those that are successful in their personalization approach stand to gain significantly, with Boston Consulting Group estimating a 10-30% increase in revenue for financial service providers that personalize the customer journey.
Even though security concerns and unfamiliarity with new technologies are impacting the state of trust, fintech brands can do a lot to address these issues. Increasing transparency about how customer information is being used, designing personalized experiences for better rapport and engagement, and making the effort to educate consumers about new technologies are all critical for the way forward.
Partnering with an experienced digital customer experience provider can also help brands overcome trust barriers. An experienced CX partner will understand the ins and outs of the financial services industry and be able to offer solutions that help overcome common challenges.
Connect with one of our fintech experts to learn how TELUS International can help your brand build trust with our digital and customer experience solutions.