Fintech Customer Experience: How to Improve it in 2024

FinTech is a growing industry at the intersection of technology and financial services. This is a powerful incentive for technological progress, which expands its influence on different sectors of the economy, allowing them to develop. For example, FinTech has been most active in consumer services, banking, money transfers, payments, insurance, asset and capital management. The industry is revolutionizing the way businesses and consumers conduct financial transactions.

According to McKinsey, revenues in the fintech industry will grow almost three times faster compared to the traditional banking sector between 2023 and 2028. First of all, this is caused by the ability of neobanks to disrupt the industry, innovate, and differentiate. Fintech products are focused on solving customer needs and putting customer experience first. Here are the latest customer engagement trends for fintech

The FinTech market is expected to grow from $340.10 billion in 2024 to $1152.06 billion by 2032, at a CAGR of 16.5%. As AI develops, more fintech companies will use it to automate customer touchpoints, decrease human errors, and increase security. According to the research, 90% of Fintech companies are using AI, and this number will continue to grow.

As the industry has matured and the market is saturated with various fintech solutions, customers are more demanding now than before. That’s why it becomes more challenging for fintech businesses to win customers' hearts and differentiate their services from traditional banks. In order to attract new customers and retain existing ones, fintech businesses should invest in building a customer experience in fintech and always improve their customer experience.

FinTech in 2021. Retrospective

Enhancement of customer experience in banking services

In my opinion, nowadays many banks are still in the same position as before when they chose to provide customer service or not and still had a good profit. Gradually they find themselves in a situation where they need to look for a revenue stream and therefore try to maximize the number of their customers, as the margin of their products falls. Today it is not the bank but the client who chooses.

The modern client is interested not as much in a good bank rate or the price of banking service, but in the convenience and speed of using the bank, the ability to work with the bank only remotely (especially during the COVID-19 pandemic), the availability of a good mobile application with various services for family, work and study. An important criterion is whether the bank has a high-quality KYC service to recognize the identity of the counterparty.

New banking products. Crossing of financial products 

The S-PRO team is currently developing a product for an American company operating in the African market. And transport paying products are gaining popularity there, for example, special bank cards. The number of such products is growing, as is the competition. This is a trend related to the first trend - customer experience. People need a lighter digital experience, which often involves paying for something. When a person wants to buy a product in instalments online, it’s also a fintech story but it happens at the intersection of eCommerce and fintech.

Banks used to hold the whole market, but today they have a lot of competition from startups. Young companies are more flexible, they see customer prospects faster, and they don’t need to do extensive analysis. In addition, there are many young talents who can and want to create something. Banks, in turn, are also interested in this, because they invest in such young companies and then can buy them. Here the issues are in the framework of collaboration with new players - large banks are already able to cooperate with startups. But middle-class banks still need to learn to do the same. Startups are actively becoming distributors of banking services.

Of course, banks are still trying to create their own financial products, such as banking products for accountants, for opening a new company, etc.

Cryptocurrencies are becoming more popular

The third trend is cryptocurrencies, a subsection of trends 1 and 2, I would say. In 2021, this fintech product continued to penetrate the banking sector. And cryptocurrencies appeared precisely because of customer experience. For people who need dynamics, speed and simplicity, such products are more convenient for payments. And in some areas, Bitcoins or Ethereums are best suited for this.

There is an increase in the number of companies that conduct their business exclusively through Bitcoins or Ethereums. Cryptocurrencies have good financial turnovers and need strong operating activities and convenient banking services. But at the same time, it’s difficult for them to get legal and to get normal bank accounts.

Today there are more and more cryptocurrency startups that work in financial services, payment processing, and software. They work as a wallet service, can securely store cryptocurrency from a range of different attacks, support all cryptocurrencies as well as do a decentralised exchange and provide many different opportunities: Cobo, Javvy, Finhaven, Digital Currency Group, Binance, and others.

By the way, among our projects is a digital-bank, which works with large crypto companies, and provides them with various banking services. This is when you can come and put cryptocurrency in the bank. Also, you can get legal financing through a bank, but in cryptocurrency.

Impact of the COVID-19 pandemic on the fintech industry

In general, the impact of the coronavirus outbreak on the industry depends on how much money banks make from their offline services and how they can operate online. The share of online banks is likely to have increased, while that of offline banks has decreased.

Different banks operate in different industries, with their own area of expertise. Some provide B2B services, others have certain products, and others just have a bank for the population. 

During the first wave of Covid-19, the impact of the pandemic on the banking sector was negative, as turnover, orders and profits fell in many companies. Demand for bank loans decreased, and banks earned less on lending. In this situation, in order to maintain a positive level of profits, banks increase the fee for certain financial activities and services and develop Internet banking, including mobile banking. Citizens are increasingly shopping online and making payments through electronic banking. Among other things, since the beginning of the pandemic, the WHO (World Health Organization) recommends the use of contactless payments. Even before the outbreak of the coronavirus, the demand for digital banking grew due to the lack of time and desire to contact the physical branches of banks. The pandemic has stimulated the development of online banking platforms to make every banking service available online.

Understanding Customer Experience in Fintech in 2024

Online financial operations have already become a part of our lives. The number of worldwide mobile banking users is expected to exceed 2 billion by 2026.

That’s why financial institutions need to keep their fingers on the pulse of a constantly evolving market to meet their customers' needs and be customer-oriented.  Here are the most important factors customers expect from the financial services industry:

• Products that are not just useful but usable
• Customers want products to be intuitive and easy to navigate on the go
• Personalization and ability to adapt the product to personal or business needs

Here’s what you can do in order to ensure that your customer is satisfied with your product at each step of the customer experience in fintech:

• Organize regular Net Promoter Score surveys to understand your customer experience and expectations
• Create omnichannel analytics to track data across each communication channel
• Ask customers to run online surveys about their interaction with your app
• Use AI to analyze customer data better and provide personalized solutions
• Analyze customer support tickets and find repetitive requests 
• Track the metrics of customer churn and regularly analyze its reasons
• Enhance your customer experience with the help of AI chatbots

Emerging Customer Engagement Trends in Fintech

Now let’s see the customer engagement trends each fintech business should implement in 2024.

Embedded finance

Embedded finance is when financial services are integrated into nonfinancial apps and websites to improve customer engagement and help them make financial operations on the go. One example of embedded finance is embedded payment, where customers do not have to enter their credit card credentials each time they want to make a purchase. Another example is giving customers an opportunity to get a loan without the need to visit a bank.

AI-powered personalization

The adaptation of AI into fintech has many benefits for both users and businesses, such as personalized investment portfolios, personalized financial advice based on customer needs, and better risk management and security. 

According to Business Insider, AI can improve the following three areas in fintech: conversational banking, direct customer interaction, fraud detection, and risk management. Here is how online banks can get the most out of AI:

• Round-the-clock chatbots
• Automated loan approval process
• Personalized financial advisors

Omnichannel strategy

Nowadays, customers do not go through a standard funnel but use many channels before making a decision. It's important to ensure that customers get a seamless customer experience in fintech across all channels and can switch channels without losing data or history. Here are some of the omnichannel strategy use cases for fintech:

• Customer onboarding
• Product recommendations
• Digital self-service options
• Customer support
• Data analysis
• Real-time engagement
• Predictive customer analytics

Personal finance help

According to the survey, 70% of Americans feel financially stressed. Most people have problems managing their personal budgets and saving money. That’s why financial apps may improve customer experience by providing helpful analytics on spending behavior, payment history, and personalized advice.