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UX supremacy: What can FinTechs teach the rest of the financial sector about creating delightful products

Aparna Chandrashekar   /    Content Specialist    /    2022-02-25

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Think about the subscription economy - everything from Netflix, Spotify, YouTube to news and groceries are now available through an automatic subscription model rather than buying as you go. In the subscription economy, consumers must repeatedly decide to keep buying and the companies that retain subscriptions over time build a rather unbreachable moat. 

Take Netflix for example, the staple king of the subscription economy as we know it. Netflix not only retains its existing subscriptions, it also attracts new subscribers at a mind boggling rate, despite the all-too-popular account-sharing between multiple people. How?

The secret sauce to their stickiness is their ability to personalize experiences at scale so that no user ever feels disconnected from the product. Netflix pays attention to behavioral metrics - they listen to the data and personalise for the consumer. They observe the number of users who watched a particular episode of a show, how much gap there was between episodes; they even personalise trailers and posters for the users according to their watching habits.

Netflix had multiple trailers to introduce users to the House of Cards. For instance, women who watched Thelma and Louise saw posters featuring the female protagonists. 

And thus, Netflix’s customer loyalty remains unparalleled in the streaming industry.

Now think about financial services. Consumers rarely buy financial products/services in isolation - more often than not, it’s a cause-and-effect relationship. Financial services are need-driven and barely ever pleasure-driven. Which is why consumer experience in financial services might be overlooked by the providers such as banks or legacy lenders because the demand for financial services doesn’t often increase automatically with just an improvement of experience. 

Or so we’ve believed. In fact, the rise of FinTechs and the super app revolution has taught us that demand for something as unglamarous as a trading account with a broker can be propped up substantially if the consumer experience is on point. The digital-first generation may not always understand what’s behind the curtains of cutting-edge tech but they definitely do love the magical feeling of getting what they want before they want it. 

They’re more than likely unaware that they’re establishing a regulated financial account with an Ola Money/PhonePe set up, but they know exactly what services they’re buying into.. The more features and the more capabilities that come along with that account, the stickier they become.

Fintechs have been using the basic principles of the subscription economy - hyper-personalisation, convenience, and friction-less multi-channel experience - to keep customer journey at the core of their business. 

Why trust fintechs with Customer Experience?

The single most important currency in Customer Experience (CX) is trust. One survey asked CMOs and brand managers “what issues keep you up at night” - 95% of them said “establishing trust between my brand and the consumer”.

Source: Nagarro

Fair enough. Trust is in short supply. Even shorter when it comes to people’s money. 

The 2020 Edelman Trust Barometer report said despite a strong economy, none of the four societal institutions - government, NGOs, media, businesses - is trusted. 

The power dynamic between financial institutions (FIs) and consumers was thus far tilted in favour of FIs. Not anymore. There’s a deluge of options for customers, if not you, then someone else. So how do you get consumers to trust you with the best experience?

Certain FinTechs might have the clues - 

De-jargonize the information gap 

When it comes to lending, borrowing, insurance and other financial products and services, the end consumer has little information about how it works. Add to this the constant news around economic uncertainty, bankruptcies, other financial challenges and the user’s apprehension aggravates. 

When apps and product sites are filled with jargon and little to no transparency, customers don’t get complete and transparent information about any regulatory changes, hidden charges, etc. 

Take Wise, a fintech company that specializes in money transfers, for example. The company uses its pricing calculator to clearly explain its charges. 

The cost of implementing an outstanding business phone line can be hefty. A business phone line can cost you anywhere between $20-$30 per user per month. Instead, keeping the language on all your existing communication channels easy-to-understand and simple, with handy tooltips for more complicated processes, is where fintechs can really score one above the legacy institutions. 

Engage customers 

Consider the demographic dividend in India.  About 34% of India’s population are millennials and 27% are GenZ. These digital natives will drive what banking will look like for the next few decades. They’re used to ease, speed, convenience - all of which are central to building solid consumer experience. 

Millennials and GenZ are used to plugging their personal information into an app and being instantly connected to the world. They’re more likely to link their bank accounts to pay for recurring services, retail purchases, and digital wallets. Fintechs have an unique advantage here - they’re adept in deep analytics and A/B testing. The typical fintech is now pulling out data by the terabyte. Real-time data - number, texts, voice, images and thousands of other data points - now exist for literally every action that customers make, every product that you sell, and every process you use to deliver those products and services. Whether it’s making changes to the size of the buttons or identifying ‘high potential’ prospects/customers, fintechs are able to hyper-personalise products and services. 

This also allows you to constantly engage your customers by cross-selling or up-selling other services by using predictive behaviour analytics based on their needs. Intelligent product recommendations can be built based on the customer's profile, demographic data, spending patterns, affordability, etc. 

A/B testing, the solid ground on which much of the fintech experimentation stands, also allows them to refine consumer experience like no other. In the lending industry, drop-offs aren’t a small number - 97% of online banking applications that are started are abandoned. A/B testing allows businesses to constantly predict the outsized impact of a small change - what time of the day to send nudges, what’s the best suited platform for a nudge for the user etc. At Finbox, we help lenders with a nudge driven conversion kit that improves conversions by 50% through automated, cross-platform nudges/offers. 

Another great example of engaging customers is user-centric design - A user-centric design thinking approach involving empathy maps, minimal touch points, remote processes and adaptive journeys. At FinBox, we help lenders boost conversions with adaptive journeys that require risk-optimized checkpoints. We evaluate customers on a 50+ parameter ML scale, based on which premium users are onboarded with fewer clicks as opposed to standard borrowers (who must pass through several checkpoints). The premium user journey has seen 50% lesser drop offs while the standard journey reduces NPAs by up to 30%.

Heed the customer 

A total of $9 billion was raised by fintechs in 2021. There’s logic to why investors are flocking to fintechs - they’ve been able to take financial services and specific vertical solutions and create a confluence  that allows platforms to grape something greater than the sum of its parts. 

More importantly, they paid attention to the customer’s exposed nerves and made banking seamless.

An interesting challenge we took on at FinBox was figuring out why customers were dropping off from renting from Rentomojo - India’s leading rental platform that rents out furniture, appliances, electronics, and more serving over 100,00 customers across the country. Their process to assess risk and underwrite rent-worthy customers was manual - generally known for being error-prone and time-consuming. Customers complained that the journey was not seamless and friendly. This subjected RentoMojo to a 20% drop-off during the onboarding phase. That’s where Finbox came in. RentoMojo automated the entire onboarding journey and started accepting bank statements via FinBox BankConnect. RentoMojo successfully improved its Net Promoter Score (NPS),  by 70%, which led to its Playstore rating increasing to 4.4 from the previous 3.6, reduced drop-offs by 40%, and lowered risk assessment turnaround time to five minutes in 83% of cases.  Read the full case study here! 

The bottom line 

Automating everything and over-reliance on technology is hardly the answer and most companies have learned this the hard way. Customers want to be seen and heard, they need an outlet. A well-resourced team is essential to handle loyalty - proactively and reactively. The last mile human touch is key to collecting qualitative insights and data that Artificial Intelligence tools miss out on and enrich product and platform experience. 

We’ve completed surviving a grim couple of years. Yet technologically speaking, it was truly a couple of years of innovation. Customer experience is now a key differentiator to attract and engage customers. The success of fintechs is a telling sign of the times - that the road to success for digital-native financial businesses goes through an obsessive focus on the user experience.