Naturally, the fear of FinTech looms large in the ranks of traditional financial institutions. The newly emerging FinTech sector is the saucy, young upstart in the financial world, turning the way traditional finance has done business for decades on its head.
At first, institutions took an adversarial stance towards FinTech startups, decrying them for simplifying financial processes that shouldn’t be simplified, and automating financial decisions best served by a human touch. Particularly disliked was onset of so-called robo-advisor technology that took the human factor out of selecting investments.
The fear of FinTech is very rational for large financial institutions. However, before declaring FinTech the foe, consider this.
Are consumers your enemy? Not likely if you want to stay in business.
Trust and loyalty for financial institutions is at a record low. The expectations of financial consumers have changed drastically. One strategy to improve loyalty is to provide new products and services that better serve consumers’ financial needs, enhancing their brand experience, and making them think highly of you. FinTech innovation can be a brilliant surprise for your customers, and serve them better at the same time.
Nothing breeds customer loyalty better than pure amazement. A FinTech experience your customers love can make that happen. For example, New York-based Moven, often referred to as a neobank, allows users to spend and manage their money from their mobile device, while providing real-time feedback on their budget and spending.
Another example is HelloLife, a holistic retirement income program from Great-West Life, London Life and Canada Life that enables advisors to collaborate with clients on a spending plan to last throughout their retirement.
FinTech doesn’t have to be large-scale to make a difference. Starting smaller with retirement planning tools, calculators, product selectors and apps can help your customers find what they want easily. That eureka moment scores loyalty for your brand.
FinTech goes hand-in-hand with disruption, which is a disturbing concept, no doubt. But from a consumer perspective, FinTech might be the best thing that’s ever happened in the financial world.
These “disruptions” are all changes consumers want, and FinTech is delivering it to them, easier, cheaper and possibly better than traditional banks.
Think about why consumers have little loyalty for financial institutions, even though they’ve sometimes been with the same bank for decades. The institutional and sometimes impersonal attitude is one reason. The fees and the complications are a second. And, the frustration with slow and cumbersome processes add to the dissatisfying customer experience.
Enter into this market FinTech: simple, easy, self-serve and fast. Exactly what the consumer wants. Frightening, perhaps. But true.
FinTech startups are great for consumers. They create healthy options for consumer CHOICE in the financial market, and their innovation forces big banks and brokerages to transform the way they do business.
At the end of the day, financial institutions serve consumers. Consumers like FinTech. Ergo, FinTech is mostly likely a friend. But there’s more. The Fintech ‒ Friend or Foe debate continues in Part 2.
BlueRush has helped many companies leverage FinTech, producing apps, automated product selectors, financial calculators and more. Talk to us about what you want to do. We may have some ideas for you.
Download a PDF copy of Part One: Fintech- Friend or Foe?