The fintech industry has played an instrumental role in implementing legacy financial services to adapt their offering, becoming faster, cheaper and more accessible. This power shift has changed the grip the big banks have traditionally had on the market and provided the everyday retail banking customer greater control of their finances.
The shift was mainly due to fintechs and digital financial services offering customers a new way of engaging with the financial services ecosystem. As digitisation continues to evolve, what was seen as a novel approach to banking is now the baseline. Consumers, now more than ever, expect a personalised experience –a financial service experience that goes beyond transactions.
Traditionally, fintechs have focused on facilitating financial activities–sending payments, managing investments or tracking budgets. Providing these services is still the benchmark, but in such a saturated market a key tool for differentiation is building (financial services-led) communities. Communities are a way of linking consumers together, using characteristics such as occupation or geography, among others.
“As digitisation continues to evolve, what was seen as a novel approach to banking is now the baseline”
Services that recognise and create communities are automatically able to personalise their service to meet the customers’ needs. The product is no longer a generic offering, but a tailored service that resonates with the consumer, transforming users from passive account holders into active participants in their financial journey. This shift benefits both users and fintech companies in profound ways.
Deeper customer connections
Transactions are usually quick, impersonal interactions. A community, on the other hand, is built on collective engagement. Users can exchange ideas, share financial tips, and learn from one another’s experiences. This creates a space for conversation and connection, keeping customers invested in the platform beyond transactions. The financial journey becomes a shared experience, cultivating a more holistic and engaging experience.
Valuable customer insights
Communities provide a platform for users to voice their financial challenges, aspirations, and pain points. This unfiltered feedback is a goldmine of data for fintech companies. By actively observing these conversations, companies can develop products and services that directly address real needs, not just generic assumptions. Having access to a constant stream of user feedback and insights can fuel innovation and ensure solutions resonate with the very people they’re designed to help.
Enhanced brand advocacy
Happy and engaged community members become brand ambassadors. They recommend the platform to others through word-of-mouth, a powerful tool in the competitive fintech landscape. A supportive community promotes trust and loyalty towards the company, leading to long-term customer relationships. Users feel valued and supported, not just as account holders, but as individuals on a financial journey together.
“Transactions are usually quick, impersonal interactions. A community, on the other hand, is built on collective engagement.”
Humanising financial services
For many, finance is seen as boring or even intimidating. By nurturing communities, these digital services humanise the experience, breaking down many of the digital barriers that appear confusing or scary. Even for digital natives, the lack of personalisation in many of these apps has made the experience unappealing. In a crowded marketplace, it’s the human touch that makes the difference.
Digitisation has fueled a one-size-fits-all mentality in financial services, leaving many customers feeling underserved. However, the fintech world is still in the midst of its evolution, as seen by the innovations coming out of the industry, pushing the boundaries of what’s possible. As customers become more aware of the potential and added value their functional banking services can provide, it will be the fintechs that understand the social nuances that stand to lead.
