Fintechs are converting customers in droves. Last year they locked down more than $12 billion in global investment. Why? Killer customer experience.

We’ve seen Spotify, GoGet, Airbnb and Uber disrupt four industries that might have thought they were immune to tech disruption. Now fintech businesses are on mobile devices too.

Fintech businesses are disrupting the business models of the arena’s traditional players. Consider that global investment in fintech ventures tripled between 2013 and 2014, from $4.05 billion to $12.2 billion, and you’ll get some idea of how hot this sector is.

They are bringing the same major change as those four earlier disruptors – upending their sector’s customer experience expectations. They’re changing the way relationships between financial services providers and their customers work, and those customers’ expectations about the way advice is given will never be the same.

The greatest advantage these fintechs have, and the one with the greatest impact on CX, is their ability to move from idea to value quickly. Startups are managing to offer their customers the solutions they want now, now, and big banks need to emulate this – huge development teams, thus far, haven’t granted short time to value. Embracing the capabilities of technology, on the other hand, could.

A good example is Prospa, launched in the US as a ‘marketplace lending platform’. Now with over two million users and $7 billion in funded loans, Prospa connects borrowers and individual lenders for loans between US$2000 and $35,000. Its investors include Sequoia Capital and Credit Suisse NEXT Fund.

Prospa’s proposition? Speed. Business borrowers aren't waiting months for their loans to be approved and funds to be available. In some cases, they’re waiting hours.

Don’t disappoint customers


It’s not only fintechs encouraging financial services into the technological future. It’s also the latter’s customers, who absolutely expect the personal, predictive service and reporting they get from suppliers in other industries.

So, how can financial advisers stay ahead of the curve? First, they need to make the technological investment to meet or exceed those customer expectations. They need to give proper consideration to how they could truly transform the customer experience in insurance, in lending, or in wealth management.

iSelect is taking customer service to the next level, making the consumption of relevant and valuable information and insight in real-time effortless for its customers. Companies can expect to compete on customer experience – in fact 60% of consumers are likely to switch brands if customer experience is inconsistent, and 58% are if customer experience is not tailored to their needs – and iSelect is completely disrupting the customer experience model.

How can you deliver that sort of immediate, personal service to a client when you’re using Excel and Outlook? There’s no long answer to that question. The short answer is that you just can’t.

What does the future look like for financial services?


The future is only going to be even more data-driven for information-hungry customers. Today’s travel apps tell people when the next train is coming or how soon they’ll have to leave the house to catch the bus, and the future of public transport won’t just build on this, it will overturn it completely. When you use Uber you can see the car approaching your location. In all of these apps you can see in real time the way everything links up.

We know that a customer’s expectations are not based on the last contact with a particular company – they are based on the CX they receive broadly. So financial services customers will increasingly expect to see their funds under management in real time. When there is a sudden change in the market, they’ll expect to be updated directly and immediately by their advisers, rather than discussing it in quarterly meetings. They won’t expect to receive their most important reports from their advisers annually by email. And definitely not in the mail. That model will no longer work.

To meet and exceed customer expectations, financial services companies must catch up with the technology and digital trends. They must innovate to transform their business and customer service models to be more personalised, relevant and timely. And they must close the gap between idea and value for customers – because customers won’t wait for the best customer experience, they’ll just go to a company that is already offering it.

This urgent change is not for technology’s sake and nor is it because of compliance and regulation. It is a case of disrupt or be disrupted.

While almost all wealth managers view digital capabilities as key for future competitiveness, 75% report that their digital applications need to improve. To find out more about how to remain competitive in the changing landscape, download our ebook The future of wealth management is digital.