The financial technology industry is booming, but while adoption of digital money management platforms has been on the rise, trust in fintech firms has lagged. The World FinTech Report 2017, by Capgemini, LinkedIn and Efma, revealed that 50 percent of the world’s banking customers use at least one fintech product or services — but only 23.6 percent of them trust their fintech providers.
That statistic is worrisome. The report showed that consumers still trust incumbent financial institutions more when it comes to fraud protection, quality of service and transparency, so what can fintech firms do to compete?
I see three main factors hindering fintech when it comes to winning the trust of consumers:
- It’s a brand new industry, it takes time to adapt to a new norm – even if we (consumers) demanded that new norm
- Lack of human connection – even if I only walk into my bank or pick up the phone once a year, I still know that someone is there to answer my questions. Consumers are being weaned off human-touch customer service for intimate services such as money management, which survey says, makes them uncomfortable.
- Vulnerability – 2016 has been a year of cyberattacks, breeches and overall fear. Taking financial information digital is unsettling when consumers know hackers are out there with intentions to expose digital weaknesses.
These concerns are relevant, but they shouldn’t hinder fintech. This is an opportunity for a few fintech firms to emerge as leaders and experience a strategic advantage over competitors, but communication is key.
An aggressive and all-encompassing communications strategy can address all three the of the above pain points. No industry standard has been established, so fintech leaders have the opportunity to open up a dialogue and craft it to address these consumer fears.
Let’s address each broken link in consumer trust from a communications standpoint:
It’s a brand new industry – Consumers are still struggling to understand what exactly fintech is. Firms need to start with addressing how their product can alleviate current inefficiencies in the financial services industry while also administering ancillary perks. Education is the first step to increasing consumers’ familiarity and confidence in the fintech industry.
Lack of human connection – Most fintech firms have great on-demand support staff ready to jump into action to assist with any consumer need, amplify this message! Just because there isn’t a physical location with a person waiting to help users doesn’t mean they will be left hanging to fend for themselves. Again, educating consumers about the capabilities of new platforms will be integral to success. Communicating via social media platforms, website chat applications, email marketing and digital content can all help to drive home this message and reassure uncertainties.
Vulnerability – The fact that money is a central element in fintech calls for some serious digital security. While security measures might typically be subjected to the fine print, this is a time to put them front and center. Fintech firms need to be vocal about the extensities to which their security measures span so that consumers’ fears can be put to rest, or at least on the back burner. This is another opportunity for fintech firms to take the lead, be at the forefront of cybersecurity research, development and thought leadership. Firms need to publicly address the importance of cybersecurity within their organization and stress the unwavering dedication they have to ensuring consumers are safe using their platforms. Even though a firm can’t guarantee a breech won’t happen, educate consumers on the game plan in case one does. Don’t wait for a crisis before addressing what will be done.
Strategic communications can close the gap between consumer adoption of fintech and overall trust in the sector. Those firms who strive to address and alleviate consumer uncertainties and pain points will likely find themselves quickly climbing the latter to gain a competitive advantage while the industry is still in its infancy. Words to the wise – act fast because nothing in the digital world will wait.
