As per Michael Zetser, there is currently new development taking place in the fintech and the BFSI (banking, financial services and insurance) industry, with the new era bringing digital services. The COVID-19 pandemic only hastened this process, as financial companies had been forced to come up with innovations for continuing and improving customer engagement, which was achieved digitally. In fact, even before the pandemic, there had been pressure on the fintech industry to provide better usability and customer engagement.
Today, there is a profound transformation taking place where the world is becoming increasingly digital, prompting brands to use technologies for payments, insurance, transactions, wealth management and loans. But, there is still a gap that exists between customer engagement and delivering optimum digital services. What customer engagement trends are vital for businesses in the fintech industry? Michael Zetser has shared some vital ones that can help make a difference.
Referral marketing programs
Businesses have always been able to generate new and retain loyal customers through referrals. They have been effective because people tend to rely on recommendations from friends and family more than any other form of advertisement. Some of the biggest brands in the fintech industry are already aware of the importance of referral marketing and have begun to leverage it to attract new customers and also retain existing ones.
The purpose of a referral marketing strategy is to reciprocate consumer trust for building the credibility of the brand and growing the business. In its early days, well-known fintech giant Robinhood had used referral marketing and had been able to expand its customer base to a million even before it launched officially in 2014.
These days, there are a number of people struggling with financial literacy and Michael Zetser says that this can actually slow down the success of fintech brands. Financial literacy is not just about some financial skills and concepts. It also encompasses understanding and also implementing various financial skills, such as budgeting, insurance, saving, investing and more. The problem is that this is not very common nowadays, as there are still billions of people in the world who are unbanked.
According to research, the absence of reliable, sound and good financial advice and lack of financial literacy are hurdles in the path of financial wellness. Therefore, fintech brands that are offering their consumers services focused in these areas can get the upper hand over their competitors in the industry. Brands that are centered on assisting consumers can benefit significantly. Even though fintech tools are often used by adult millennials, they do need to expand their knowledge of financial literacy.
Those who are not financially literate are actually more vulnerable to economic instability. Fintech brands can offer critical and solid financial literacy and also improve customer engagement. This can be accomplished by offering resources, such as podcasts, audiobooks, webinars, e-books, articles and journals.
As a fintech investor, Michael Zetser entrepreneur says that customers are more likely to support and engage with brands that make them feel more than a number. Brands offering personalized services nowadays tend to have a wider customer base. This is something that fintech brands need to take note of because offering personalized services can help them connect to their consumers.
This strategy can also be helpful for customer retention and businesses can increase their revenue by 10% by offering custom solutions that can address the needs of their clients. As far as fintech businesses are concerned, offering personalized services can help them connect to a broader category of audiences. This is because they are capable of providing customized financial solutions according to the requirements, rather than taking a one-size-fits-all approach. Moreover, AI has also made it easier for companies in the fintech industry to offer personalized services.
One of the top customer engagement trends that Michael Zetser has highlighted for fintech brands is that of cashless payments. With more and more people owning smartphones nowadays, it makes sense that they should be able to switch to more convenient payment methods. This involves using their smartphones to complete transactions. The digital transaction rate is expected to increase threefold by 2030.
This shows that fintech brands that are offering digital transaction solutions to their clients, such as digital wallets, are likely to maintain their relevance in the sector in the next decade. Furthermore, fintech companies can also become more financially comprehensive when they provide digital transaction solutions. Offering digital transaction solutions to low-income cash clients that are independent of traditional bank accounts can also be helpful for boosting economic mobility.
These days, consumers have more expectations from businesses and with the competition increasing in the industry, fintech entrepreneur Michael Zetsersays that fintech brands should deliver solutions and experiences that can fulfill customer expectations, or they might have to deal with customer churn.