The Future of Fintech for Traditional Financial Services
March 5, 2021
Innovation Doesn’t Excuse Information Overload in Financial Services: An “SSR” Benchmark to Strike the Right Balance
“Innovation” may be the most used buzzword in financial services. When announcing improved technological capabilities, companies clamor to say they are the first, the fastest and most futuristic. But what constitutes as true innovative financial services – and what do consumers think?
Last fall, my colleague Anne Green penned a piece on the “last mile” of digital transformation in financial services. She explains how our role as communicators includes the responsibility to call out when systems and processes must be transformed, and determine how to make those transformations seamless for our clients’ customers. There is a difference between tech evolution and true transformation. Innovation can be present in either, but they aren’t created equal and shouldn’t be communicated with equal fanfare.
What is Financial Technology (Fintech)?
Fintech is the adoption of new and innovative tools and technology that improve processes, systems, and customer service in the financial services sector.
The Gap in Fintech Adoption is Wide
While some consumers still balance a checkbook by hand, others may have not stepped foot in a bank branch in years, managing all their financial needs digitally. Every trend, however, points in the direction of a hybrid – online, mobile and in-person - model that must include accessibility to multiple touchpoints.
The COVID-19 pandemic only accelerated the move toward finance’s digital transformation. A recent G&S Communications consumer survey found that quarantine prompted individuals to conduct more of their banking needs from a phone or tablet. Consumers report that they now use the online banking platforms offered by their financial institutions to:
Manage personal finances
Communicate with the institution via chat
Fintech Trends Are Becoming Second Nature
Consumers expect speed, ease, flexibility and a personal touch with the financial technology they use every day. And yet, when asked what attributes are most important to consumers when selecting a financial institution, only 2% of consumers cite the utilization of the latest innovative technology as their top priority. Only 17% cite the ability to conduct most banking needs online or via mobile device.
This disconnect between consumer behavior and consumer psychology demonstrates that innovation isn’t about what service providers have to gain, but what they have to lose. Integrating new tools into our day-to-day lives is becoming second nature, and if the solutions we use go stagnant, we’ll move on to what’s coming next.
Tech booms throughout history have seen many frontrunners lose momentum by losing focus on continued innovation. Skype, the early leader in web-based video chatting, failed to keep up with new capabilities offered by the likes of Apple’s FaceTime and Zoom. The first big players in social media like Digg and Myspace stayed rigid in their structures and left the door open for more experimental platforms like Facebook to take over.
The lesson to be learned for financial service companies is, once you’re behind, you’re already too late. Reputation is so closely linked to where your organization ranks among industry innovators. The exponential growth seen with consumer technology over the last 10, 20, even 30 years has made it clear that a strategic communications plan on digital innovation is not a nice to have, but a necessary investment for survival. Right now, the communications arm is especially imperative when touchpoints with consumers are limited.
However, the need to communicate on how your financial institution’s innovative services does not mean there is a need to over communicate. Again, consumers want a seamless tech experience. Your communications efforts must be seamless as well. Savvy communication professionals should realize their important “gut check” role to distinguish between digital evolution and digital transformation and recommend different outreach based on what’s happening. And with any communications, here is an “SSR” checklist to ensure you aren’t talking past or above the people you truly want to engage:
Keep It Simple
One of the hurdles with digital transformation is the learning curve. The more complicated the tool, and the more investment required from the financial consumer to understand how to leverage new abilities, and the more convoluted communications must be to properly explain what is being offered. Be mindful of when and how you roll out new tools. If the demand on the consumer to wade through pages of explanation is too high, resistance will prevail.
Keep It Short
Again, financial consumers express innovation as a lower priority than attributes like trust and security when it comes to deciding which institution to utilize. Keep communication about the rollout of fintech to the “need to know” basics and emphasize how the latest financial technology creates a safer, more secure experience for the consumer.
Keep It Relevant
Innovation can’t be for the sake of innovation – it has to ultimately satisfy a consumer need. Stay responsive to what capabilities financial consumers are really asking for:
What questions and topics are raised most with the online banking chat feature?
What tools are customers already using from other sectors that you can learn from?
Financial digital transformation is an ongoing process, what we like to describe as laying down the track as the train is moving. With a greater understanding of how the pandemic has impacted our relationship with technology, and with the companies trusted to conduct vital services, we can inspire more purposeful financial innovation and productive conversations.
Access our in-depth report on what's next for financial services in our Reshaping the Future series here.