Challenges Faced By Fintechs In Building Trust With Their Customers

Fintechs, neobanks, and new-age financial apps are at the epicentre of transformation that has taken the world by storm. Technological changes are making payments faster. The meteoric rise & adoption of UPI in India is a live testament. UPI payments crossed the 7 billion monthly transactions mark in October '22. 

Clocking over a billion daily transactions doesn't seem like a far-fetched goal anymore. 

Newer business models and financial products are changing consumer behaviours and expectations. Suddenly, a massive mall of financial products & services is available to consumers with a click. The list is long: credit lines, small ticket loans, digital gold, pocket insurance, virtual cards, pay later, spare change investing and contactless cards.

And everybody wants a piece of the action!

The competition is getting hot and Fintech brands need to build their 'trust equity' fast in the ecosystem as the pie increases. But trust in a brand is built over time. It only happens after a while and requires consistent effort.

Consumer preferences lean towards trusting banks & institutes their family and friends have banked over the years vis-a-vis Fintechs yet to penetrate the market. Fintechs must work harder than their banking counterparts to deliver a trustworthy proposition. They have to push the envelope to grab the attention of their target audience, get trials of their services and retain them over time.

With cybercrime on the rise, Fintechs must ensure their systems are robust & foolproof. Communicating this again & again to the consumers on every interaction helps instil trust. Brand impersonation fraud is another challenge Fintechs face, where fraudsters dupe customers by mimicking the brand’s name. Actively educating the customers about these pitfalls and how to prevent them becomes essential.

Amidst all these challenges, new-age financial apps must survive and build brands in an environment that balances business sustainability, consumer expectation, regulatory & compliance requirements and growth in a dog-eat-dog world.

So how does one build trust amongst these challenges?

Here are a few ways Fintech brands can build trust that has compounding rewards in the long term.

Personalising Customer Experiences

As a thumb rule, brands that personalise leave a lasting impact on their consumers versus those that don't. Here are a few ways managing experiences can contribute to trust enhancement -

a) Understanding customer segments better and customising journeys

b) Rewarding loyal customers and affirming their positive behaviour

c) Offering curated offers at the right time (instead of one size fits all)

d) Communicating in a language customers understand. Avoiding jargon and enabling vernacular experiences

Clarity & Transparency

A vast majority of consumers in our country understand money and how it works, yet, for many, the experience with financial products has been sour. Convoluted calculations, hidden charges, and complex terms & conditions have made their organic reaction to mistrust whenever they hear an unfamiliar name. Helping them understand how they are charged, explaining the pitfalls & charges levied, and approaching this challenge with some empathy can help brands stand out and build long-term relationships.

Flashing Medals & Badges

For any new brand, building consideration amongst the target segment is the first battle to win before acquiring customers. Flashing trial numbers, highlighting partner logos, security certifications, success rates, preferred badges, reviews & ratings etc., come in handy to get a trial chance. Adding these on wait screens, welcome kits, email footers, and social pages can help bolster trust in the consumer's mind.

Collaboration & Value Creation

Besides the core offering, delighting customers with ancillary value products helps maximise their experience.

'Underpromise & Overdeliver' should be the mantra here.

Collaborating with a partner brand to unlock different products, sharing a free financial health report or a credit report or a checklist, and providing a trial experience are a few ways to achieve this.

Responsiveness & Reachability

Promptness in communication, whether a brand broadcast or a customer conversation, is a low-hanging fruit.

Brands can achieve these by -

a) enabling a simple ticketing system to track complaints/escalations

b) adding chatbots and curated FAQs (better if enabled with NLP & ML, so they get better in time)

c) adding video recordings of 'how-to-do-this' content

d) priority support for critical issues and a responsive customer success team

e) building support communities where power users guide & help others

Consistency & Time

Delivering what is promised and doing it consistently is a non-negotiable point that brands must adhere to. Mistakes are bound to happen as the business grows. Acknowledging pitfalls in service levels & making up for them goes a long way for brands.

It is important to understand critical moments, be they positive (like a loan application approval) or negative (like a payment failure) and err on over-communicating rather than waiting.

The number of people who need better services in the financial sector in India is enormous, and Fintechs have only scratched the surface.

Hitarth Saini

Guest Author Head of Marketing, Freo