As fin-tech innovations from financial institutions and startups roll out, a frequently underestimated challenge is the importance of trust in accelerating the adoption of these solutions. Building trust underpins the success of any digital financial product — right from the design to the delivery of the product.
The World FinTech Report 2017, by Capgemini, LinkedIn and Efma, revealed that 50 percent of the world’s banking customers use at least one fin-tech product or service, but only 23.6 percent of them trust their fin-tech providers. The need to gain trust in a business is better expressed in the 2016 Edelman Trust Barometer Study which revealed that when a business has earned the trust of customers, 68% are more likely to buy their product/services, 59% recommend them to a friend, 41% share positive opinions online, 38% will go out of their way to defend the company and 37% are willing to pay more for the product/service.
Though traditional financial institutions seem to be more at an advantage due to their long years of existence than startups, it is not unusual for millennials — who are fast becoming the majority of customers — to express their distrust in the solutions rolled out by these institutions.
Financial institutions and startups can employ one or more combinations of the following ways to build trust and gain consumer confidence:
Get your Branding Right from the Start
“A Brand is a Promise,” is a popular connotation of what a brand represents. From the logo, name, colour selection to images, a fin-tech company or product must exude warmth and confidence. Every element that forms the touch-point should be designed to communicate capability. The simple decision of a company to prioritise the images of people using its apps over the app interfaces can go a long way in converting visitors to its websites to test the products.
Some companies anticipating barriers to their products have gone further to “humanise” their products through the human persona. A recent case study is UBA’s new e-banking chat-bot called Leo. Leo is described by the Bank as “the UBA Chat Banker who enables customers to make use of their social media accounts to carry out key banking transactions”.
Fin-tech brands can embrace consumer education, a form of content marketing to build trust among prospective users of their product(s).
Associate with Established Brands
This is often the way to go for startups; they can associate with a financial institution, an organisation, an event or a publication which has earned credibility over time. The aphorism, “people buy from who they know” rings true.
Fin-tech startups can collaborate with traditional financial institutions to better serve their existing customer base as a value-added service provider. An example of this is the 3-in-1 Business offer from FCMB, a well-known commercial bank in Nigeria and Paystack, a fin-tech startup, to help customers easily receive online payments.
In reality, partnerships can be difficult for startups; they are perceived as a threat by most traditional banks, there is a lack of cultural compatibility and bureaucracy can hinder such partnerships.
Speaking at industry-wide events is a proven way to associate with established brands; these events are extensively covered by the media.
These associations improve the online visibility of startups and in turn, drive traffic to their user acquisition channels.
Invest in Security and Compliance
From a visit to the website, the app to the social media pages, security best practices should be implemented across all the touch-points of a fin-tech solution. Having an SSL/TLS certificate for websites reassures tech-savvy customers of how secured a platform is.
Though meeting compliance with industry regulations can be challenging for startups, basic compliance requirements such as KYC needs to be met. Using robust APIs for data sharing and transfer, fin-techs can reduce the burdens this can cause on the user experience. Building on this, robust authentication algorithms should also be put in place.
Compliance in areas such as license and certifications can also be acquired through partnerships and license-sharing agreements. Having a third party organisation prove a fin-tech’s compliance and meeting of security requirements also provide a credible way to gain the trust of users and potential partners.
Craft a Great Customer Experience
All the aforementioned points may open your doors to customers, but only a pleasing customer experience can get them to stay. Customer Experience starts from understanding the customer journey and replicating this journey on digital platforms with a simplified user experience. Customers should be able to complete processes or tasks on other apps within your application/platform.
Rather than a one-size fit all in product design, personalization also provides an approach to make fin-tech products more endearing to customers.
Provisions should be made to handle challenges that customers may face; corrective error handling and a responsive customer service through the product or social media pages.
Users find it difficult to recover from a bad experience in their first attempt to use a solution. Some go as far as writing negative reviews, which can hurt the reputation of a fin-tech product or company.
Finally, as customers become more tech-savvy, fin-techs need to be more transparent about the data they collect and process. Fin-techs cannot deny the volume of data they have access to and this can be scary to users.
A reminder of Google’s mantra, “don’t be evil” can provide fin-techs a moral compass for guiding their affairs in staying clear of activities that can lead to a breach of this trust. Issues that can lead to a perception of the breach of trust should also be proactively catered for in the terms and conditions users are made to agree to, on signing up for these solutions. With a combination of two or more of these recommendations, a fin-tech can push through limiting barriers to earn the trust of customers.