More people than ever are now accustomed to digital transactions—even the more senior or sceptical consumers who typically prefer going to a bank branch for their transactions, were forced to make the switch to digital. As we go back to normal, the expectation is that the majority of us will continue using digital channels. A similar shift took place in the B2C space, with many businesses who did not offer digital alternatives for transactions, rushing to enable e-commerce and m-commerce options for their customers.
This shift presents an opportunity for Fintech companies to capture market share and grow their portfolio exponentially, but it also comes with key challenges.
Are Fintechs ready to accommodate and cater to more “traditional” generations?
According to Statista, from 2010 to 2020, UK citizens primarily using online banking grew by 34%. But in 2019, only 19% of consumers who switched to mobile banking were Gen X or Baby Boomers. The pandemic has helped bridge this ‘generation gap’, and today we see less digitally-savvy users entering the digitised financial services space. To cater to these new segments, Fintechs have to ensure that they have products relevant to different age groups and lifestyles, and that their tools and services are user-friendly.
Some believe the way to do this is to create Fintech platforms that offer the same level of customer service as brick-and-mortar banks. If older clients feel supported through their digital experience, they will feel more comfortable entrusting technology with their wealth.
Are Fintechs’ infrastructures and processes sufficient to support such growth potential?
This is a significant point of discussion, especially for Fintech companies that offer B2B services. Businesses are turning to Fintech for programmes such as BaaS to provide their customers with a streamlined checkout process without needing to apply for a banking license. For example, businesses who want to offer customers a credit card have to team up with a Fintech company with a banking license to make it possible.
The trick is being able to offer businesses everything they need while making it easy to integrate into the system they already have and with the ability to scale with the company.
One opportunity for this lies in the adoption of APIs. APIs allow Fintechs, banks, and other service providers to join forces, share technology, and expand their networks.
APIs make horizontal and vertical integration easy and allow for a culture of collaboration. They also generate new revenue streams and send solutions to market faster while providing innovation and functionality for all users.
Danny Healy of MuleSoft stated at Fintech Magazine, “Fintechs come in all shapes and sizes, and banks will want to adopt the right strategy to, yes, compete with them in some cases. Increasingly, however, banks will look to fintechs to partner with. Not all the good ideas can be thought of within a bank, and API strategy allows you to put the capabilities in the hands of people outside the bank who might have great ideas.”
Are Fintechs capable of expanding their footprint and partnerships fast enough to take their share of the increased demand?
As Fintechs take up more space in the industry, they need to keep pushing forward. The issue is constantly finding scalable solutions to meet the demands of everyone who wants to use a Fintech service.
No matter who they are working with, Fintechs have to keep up with their customers’ needs and desires. An enterprise-grade Customer Relationship Management (CRM) platform is a potential solution to manage such growth in a sustainable way.
CRMs such as Salesforce offer Fintechs a way to streamline their data and processes. They eliminate data silos by providing an integrated platform that replaces multiple systems for client visibility, revenue, and areas for improvement. Because CRMs allow Fintechs to interact with their customers in real-time, the companies can convert more leads and develop a base of loyal clients.
Having all of the data in one secure place also reduces operational risk. A company’s reputation can be instantly damaged due to insufficient processes, cybercrime, miscommunication, errors, and lack of compliance. CRMs decrease the chances of these risks so Fintechs can concentrate on their products or services, whilst avoiding regulatory fines and reputational damages.
CRMs allow Fintechs to provide a better all-around experience for clients. The platforms allow Fintechs to communicate with customers at the right time, through the right channel and with the right proposition.
As an example of the value CRM solutions can bring to Fintechs, Upstart, the first lending platform to leverage AI and machine learning to transform the borrowing process, use Salesforce’s Marketing Cloud to automate personalised 1-to-1 customer journeys to engage with customers at scale. Upstart implemented over 20 unique customer journeys on Marketing Cloud to achieve 2x-4x conversions rates.
The future of Fintechs
As technology continues to advance, Fintechs will have to adapt and grow with it. While it’s impossible to predict the future, Fintech companies will likely have plenty of room for expansion, especially as we move forward from the pandemic.
To grow, Fintechs must find a way to meet the increasing surge in demand for digital finance, and that’s where WHISHWORKS can help. We partner with an ecosystem of digital innovators including MuleSoft, Salesforce, Tableau and Confluent, to help companies accelerate business outcomes through digital enablement, seamless connectivity, and data transformation.
If you would like to find out more about how you can leverage technology to meet the increasing surge in demand for financial services, we can help. Give us a call or email us at email@example.com.
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