Fintech start-ups are shaking up the financial services industry. Take Lending Club, for example. It has created an online credit marketplace that connects borrowers to investors — completely bypassing traditional financial institutions. Betterment promises low-cost investing, with money allocated to index funds by algorithm — no need for an in-branch financial advisor there. Then there’s Kabbage, offering 100% online, automated lending, with fast applications, instant decisions and money available on the go through a mobile app. That’s hard to compete with if you’re a community bank or credit union constrained by tight regulation and tighter budgets.
One way to hold your own in an increasingly competitive digital world is to incorporate fintech strengths into your own organization. Here are three things they do very well. Learn from them and future-proof your community financial institution.
1. Keep your focus narrow
Fintechs often create innovative solutions for a very specific challenge consumers are having—say, getting affordable credit (Lending Club), investing without the drag of fees (Wealthfront) or processing credit card payments for small businesses (Square).
Take a look at your customers. Where are their pain points? How can you eliminate each one? A narrow focus helps you design targeted initiatives. These can be as simple as streamlining and differentiating your lending process with an efficient loan origination tool that allows your customers to apply anytime, anywhere they choose.
2.Embrace new technology
Fintechs understand the power of technology to transform processes. They don’t necessarily invent everything from scratch. Rather, they borrow bits and bytes and put them together in unique, goal-oriented ways.
Within your organization, too, the idea isn’t to use technology for technology’s sake. Instead, it’s to pick and choose solutions with clear benefits—whether that’s speeding up document access with an enterprise content management system or automating your campaigns with email marketing. Ideally, you want tools that work well on their own but are easily integrated with other components so you can upgrade over time as your budget allows.
3.Make customer experience your number-one priority
Fintechs pay a lot of attention to customer experience. Without a friendly, intuitive digital interface, they’re nothing, because they can’t fall back on in-person customer interactions to fix experience shortfalls.
More and more, you can’t either. Financial services customers increasingly interact across multiple channels, and if they aren’t satisfied with the experience, they have other alternatives readily at hand — including fintechs. One solution is to share information across your organization so customers can tell their story just once and problems can be solved at the first point of contact. A customer relationship management (CRM) tool that does this has an estimated return on investment of $8.70 per dollar spent.
By providing a great customer experience with every interaction, through every channel, you can improve client loyalty, generate referrals, increase revenue and efficiency and strengthen your brand. The stats are in and the fintechs aren’t going anywhere. Make sure you have a plan to stay competitive and beat them at their own game.
Find more insights into fintech strategies in “The Experience Gap: The real threat facing community banks and credit unions” or call us at 1-866.475.9876.