Three areas where fintech start-ups are revolutionizing the customer experience
With advancing technology and increasing customer expectations, it’s getting harder and harder for traditional banks and financial planners to stand out from the crowd in the minds of consumers.
But what forward-thinking financial institutions are realizing is that the way to attract and retain customers is to use emerging technology and smart design to provide high-touch, customized customer service.
Fintech companies have embraced this outlook wholeheartedly, becoming a dominant force in the global start-up ecosystem. In fact, PwC estimates that the cumulative investment in fintech globally could vastly exceed $150 billion within three to five years.
Here are three areas in which fintech companies are pushing the boundaries of world-class customer experience.
1. Combining social technology with investing
The traditional investment-management industry has a lot of pain points that have long gone unresolved. Gaining access to high-level, professional investment advice often requires a large upfront capital contribution, with the added inconvenience of face-to-face meetings with wealth managers. Even so-called “budget” online trading platforms still have many of their products, and corresponding fees, tied to larger institutions.
That’s precisely why Yoni Assia co-founded eToro, a fintech that brings the new concept of “social investing” to the forefront. Rather than blindly handing over money to a mutual fund and crossing your fingers that the manager outperforms the market, eToro allows investors to see what some of the top traders and investors are doing on the platform — and to adopt elements of their strategies to their own portfolios.
While at the 2016 Web Summit event in Lisbon, Assia spoke about the burgeoning union of social technology and finance. Borrowing a phrase more common among tech firms than banks, Assia said large financial institutions are increasingly partnering with firms like his to improve the user experience of managing investments, integrating the “benefits of innovations like social investing, but under their own branded experience.”
Assia says customers crave a more emotional connection to their finances. In the end, it’s the sharing, connecting and communicating with other people from all walks of life that makes social investing such a different customer experience than traditional investing. “Traditional financial institutions tend to detach people from their money and what they really want out of life,” Assia says. “We look at the emotional connection between people and their investments, and give them a platform to help one another achieve their financial goals.”
To retain customers, the customer support organization must maintain that same level of emotional connection to provide a seamless experience at all stages of the customer journey.
2. Deeper insights into personal finances with natural language
How consumers monitor, track and analyze their finances is changing rapidly with technology. Apps like Mint.com provide charts, graphs and breakdowns of individuals’ budgets and spending habits. But as machine learning evolves, so will the level of insights that software will be able to provide customers.
Wizdee, a start-up based in Portugal, is combining business intelligence reporting with natural language technology to give consumers deeper, on-demand — and in some cases, predictive — insights into their own personal finances.
Wizdee provides its tool as a white-label app to some of the largest financial institutions in Europe, which is then branded and provided to customers on their PC, mobile and tablet devices. “Banks can then gain a better understanding of their clients through data analysis,” says Bruno Atunes, Wizdee’s chief technology officer. “They’ll know which clients are a good fit for specific products or services, because they’ll have an in-depth understanding about their budget and spending habits.”
Legacy institutions today are starting to realize that partnering with business intelligence technology experts like Wizdee, and providing superior solutions under their own branding, gives them access to more customer data to analyze and use to improve customer experience in the future.
Atunes and the team at Wizdee see personal finance applications increasingly moving towards artificial intelligence and machine learning technologies. “Banks that find ways to integrate these new technologies can provide highly differentiated solutions to their clients,” Atunes predicts. “Because banks have traditionally been focused more on sales, ones that use cutting-edge technology to improve customer service will stand out from the competition. The future really is about better service, because consumers are already beginning to demand it.”
Armed with smarter data, customer support organizations can wow customers with customized support and offers that reflect a true knowledge of the individual.
3. Redefining customer service in insurance with IoT
It’s no secret that one of the slowest industries within finance to embrace technological advancement is insurance. The health-insurance industry in particular has come under fire in recent years due to high premiums, poor service and lack of trust.
Dublin-based insurance tech start-up WeSavvy aims to change the way policyholders perceive and experience service by applying Internet of Things (IoT) technology in novel ways. WeSavvy’s IoT cloud platform, for instance, has the capability of connecting to just about any health-related device, with fitness wearables serving at the main use case.
The goal is for insurers to be able to reward their policyholders that engage in healthy activities, giving them points towards lower premiums if the wearable indicates they’ve walked a certain amount of steps each week.
WeSavvy founder, Hesus Inoma, came up with the idea when, after adopting a healthier lifestyle, he was still refused a lower premium by his insurance agency. He realized that the agents he was speaking to, and the insurer in general, didn’t have the correct information about his new, lower-risk profile. “Insurers lack understanding of their customers due to their failure to engage effectively and frequently with them,” Inoma says. “The result is a failure to appropriately tailor products and related services to each specific customer’s needs. By giving insurers access to connected devices, data sets and information from each customer, insurers can develop a more meaningful understanding of the customer in order to service them.”
Inoma predicts that, in the future, insurers will be utilizing data sets from an enormous array of connected devices. This includes things like smart fridges, home security devices, smart scales, smart toothbrushes and smart clothing. Still, the insurance industry has many hurdles — including consumer concerns about security and privacy — to overcome before the link between IoT and customer service can be fully realized.
As WeSavvy, Wizdee and eToro illustrate, fintech companies are changing their industry for the better by using technology to create a more emotional, high-touch experience for customers. In the process, they’re offering a blueprint to the big players for how to engage and retain customers in the world of rapidly changing technology and expectations.