How Fintechs Keep Costs Down While Raising Up Customer Experience
By Dan Rogers
The financial tech market has been exploding over the last handful of years. In 2019, fintech startups reached $55.3 billion in investments globally, and 64% of consumers used at least one fintech service or platform.
Since the COVID-19 shutdown began a few months ago, more people than ever have taken advantage of digital means to do their banking, borrowing, shopping, and other financial transactions. Average weekly usage of finance apps has gone way up. Over roughly three months, U.S. consumer usage of such apps has increased by 20%, and in some countries, including Japan, by as much as 55%. We’ve collectively gotten a lot more comfortable adopting digital tools — in fact, we now prefer it.
63% of people are more likely to try a new digital experience now than they were before coronavirus appeared. — Lightico
On the other hand, 2020 has also brought a major tightening of the purse strings among the investors who power fintech startups. The pandemic has created uncertainty in nearly every area of life and business, and with many companies under stress, access to funding has become challenging — especially for early stage ventures. Investors are more inclined now to keep their money on established fintech firms with clear business models.
Fintech startups rarely have a lot of cash on hand. In a Genome survey of more than 1,000 tech startups globally, more than 40% had less than three months of capital available, and two-thirds couldn’t last more than six months. This leaves a lot of fintechs looking for ways to extend their cash runway even as they wow customers with dazzling new experiences.
Elevating customer service to match the innovative experience of the product
“How are fintechs innovating to provide relief and enable recovery?
… [by being] laser-focused on a seamless and delightful digital customer experience.”
Fintechs pride themselves on being innovative. They’ve disrupted banking, lending, wealth management, and more. They’re angling to create new, streamlined experiences for customers, but often, there’s a disconnect between the app experience itself and the experience customers get when they seek support.
For instance, customers easily learn how a finance app works, search for products, and conduct transactions. But when they have a question about a transaction, they end up waiting way too long for an agent. Or they have a simple question about how a transaction works, but the brand’s live chat agents are overwhelmed, so there’s a wait.
Today’s consumers and business users expect instant, friction-free customer service. Live agents are great for expert opinions and personal conversations. But more often, customers are looking for simple information and answers. If they can’t get those answers quickly, their entire impression of a brand declines.
Remember: 45% of consumers don’t care if they interact with a live agent or a chatbot, as long as the solution is quick and effective.
Making excellent customer service scalable and affordable
For startups in particular, it can be hard to scale up a highly personal, entirely agent-driven customer service organization — as evidenced by the many legacy financial services providers who still rely upon remote call centers staffed with hundreds and even thousands of people.
The math on legacy customer service systems doesn’t always add up. If you’re charging an individual user $15 a month or 3% per transaction to use your app, and that user spends one hour on the phone or live chat with customer service, chances are you’ve already lost money. Simple unit economics dictates that if the cost you spend providing a service surpasses the revenue you get from the customer, you’re losing money on that customer.
Of course, this is an extremely simplified equation. The hope is that your collective user base doesn’t have to tap into your customer service all the time, and that the money you lose on a few customers is recouped through others. But then again, if you’re hoping that your customers won’t call, aren’t you losing an opportunity to engage them?
Leveraging automation in your customer service is a great opportunity to save capital and provide a superior experience. The average customer service call costs roughly 10x the cost of interacting with a bots. Investing in AI-driven bot interactions expands gross margins with each customer engagement. And at the same time, using automation and AI enhances the customer service experience — which is important, because simply being cheaper would not be enough.
Ease of implementation
Well known, scaled-up fintech brand names are already leveraging bots at scale. But the same technology is available to early- and growth-stage fintechs at roughly less than 1/10th the annual cost of a single customer service rep.
The even better news is that it’s incredibly easy to get up and running with AI and automation. You don’t necessarily need an IT team or outside consulting expertise. A lot of automation tools — like Helpshift — are self-service and can be customized to your organization pretty easily. You can learn more about this economical offering – and try it for free – at Helpshift.com.
Fintechs that inject their customer service with AI and automation get a double benefit — savings on the support they offer, and an elevated experience for customers. Companies such as Helpshift have productized AI-driven bot interactions that provide superior customer experiences and save you money with each customer service engagement.