As we’ve covered in the first in our series of two fintech insight reports, digital-only banks (also known as fintech or challenger banks) are growing in popularity, especially amongst younger consumers. Targeted marketing campaigns, innovative features and impactful social media strategies have helped fintech score millions of customers, but despite this, only 9% of Brits can name a challenger bank.
Stats from the past couple of years have proven that although the intent is there to switch banks, few actually go through with it. 4.8% of Brits intended to switch banks last year, but in the year previous, only 1.4% had actually switched. Additionally, while 49% of consumers prefer to have multiple bank accounts, fintech customers are even more likely to solely rely on digital-only banks - 81% of Starling customers, for example, prefer to have more than one bank account.
The fact is, consumers aren’t ready to fully trust fintechs and take them seriously. While these new challenger banks see consumers rushing to sign up before they jet off on holiday to take advantage of free cash withdrawals overseas, for example, many of these same consumers are nervous to let their traditional bank accounts go and commit to the challengers as their only account.
We explore how fintechs can change consumer habits and build trust in their services, turning commitment-phobes into loyal customers.
It’s not enough for fintechs to simply be present on review platforms (and, unlike many traditional banks, they are), they need to be actively displaying and listening to that feedback too.
Reviews are an incredibly powerful decision-making tool – 96% of consumers read or use reviews in some way. With fintechs grasping social media and digital marketing so effectively to reach younger audiences, it goes without saying that they should be displaying their great feedback across their online channels too – from their website to their Instagram account. After all, if they’ve created some great, unique tools that help people manage their money better, save for the future and have changed their attitude towards spending altogether, why wouldn’t they want to shout about it? Short, impactful quotes from their happiest customers used across their marketing is a great way to build trust in both new and existing customers.
It’s not just about collecting and displaying feedback, though. In a time when fintech banks are still a relatively new concept, the key to earning customer trust and loyalty is in listening to, and acting upon, their feedback. Customer reviews are one of the best ways to understand customers and how they feel about the business, but they can also be used to shape future marketing campaigns and even develop new products. Challenger banks need to collect feedback from their customers regularly, not just after someone has signed up with them. It’s vital to track their thoughts and emotions across their entire customer journey, such as after an enquiry with customer service, or once they’ve started using a new feature within their account. Inactive or disengaged customers in particular should be asked for feedback. What will bring them back? What’s stopped them from using the bank as their main banking account? The only way to know, is to ask.
Gen Zs and Millennials may have particular banking habits and challenges now, but those will change as they get older and their circumstances change. Challenger banks need to be able to stay on top of where these consumers are in their lives, what problems they face, what they’re passionate about, and what they’re spending money on, in order to continue to deliver the right products and marketing messages.
While innovative features is one of the reasons fintechs have been so attractive to young consumers thus far, continuously coming up with new features isn’t a sustainable practice. Traditional banks are already catching up, with many beginning to offer similar perks.
Innovation is important, but what fintechs really need to focus on is proving stability and reliability. Consumers need to know that these new banks can be trusted to look after their money, only then will they stop using them as holiday spending pots and start using them as their main banking and business accounts.
Want to learn more about who uses fintechs and why, as well why we believe customer experience is their key to success? Download our ‘Generation fintech’ insight report today!
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Laura works in the Content Team, but does way more than write blogs. Specialising in digital copy, she makes sure our SEO is up to scratch and regularly keeps the website flowing with fresh and engaging content. She also plays an active role in Feefo’s charitable efforts as a key member of our charity committee.