The Covid-19 pandemic rocked all industries as it forced consumers and business owners alike to shelter in place. For the banking industry, this meant having to rely on technological solutions more than ever before.
FinTech and its related services helped the banking industry to survive the pandemic through 3 key factors. These factors are enabling remote work environments, empowering customer-centric business, and personalizing user experiences. As a result, more financial institutions have adopted and embraced innovative technologies.
In this article, we will discuss how FinTech was able to support the banking industry throughout the pandemic. Plus, we will cover what the adoption of technology-based solutions means for the industry moving forward.
Enabling Remote Work Environments
The first priority for supporting the banking industry was figuring out how to connect financial teams when working in-office was out of the question.
Through adoption and migration to the cloud, FinTech companies provided banks with stable and reliable digital platforms to do business on.
There are 3 key factors that FinTech utilized to help banks operate from virtual environments:
- Cloud Computing: The cloud is a digital space that provides everything a business needs for building efficient infrastructure. Data is stored in one central location on the cloud, allowing authorized personnel to access data and files from anywhere at any time.
- Omnichannel Strategies: For remote business to work successfully, customers and business teams alike must have open channels of communication. Omnichannel strategies ensure that all tasks and activities can be achieved no matter the channel used. This includes call centers, online platforms, and even in-person service.
- Total Digital Transformation: Migrating to the cloud is only one step in the digital transformation process. The pandemic offered the perfect opportunity for FinTech to demonstrate the advantages of digital transformation, as banks tried to ensure they could still provide necessary services to customers.
In fact, the financial industry was able to not only support itself through the help of FinTech but was also able to provide more jobs. As of May 2021, the finance and accounting industries had collectively added over 550,000 jobs with an unemployment rate of only 5.8 percent.
Empowering Customer-Centric Business
The pandemic sparked fear and doubt in the hearts of consumers. Because of this, banks needed to achieve a high level of trustworthiness to keep customers coming back and to help them embrace the new digital ways of doing business.
To do so, banks had to take on a customer-centric attitude – an attitude and practice that is a fundamental building block for FinTech.
The Deloitte Center for Financial Services recently published Beyond Covid-19: New Opportunities for FinTech Companies. In this report, Deloitte gives examples of how FinTech companies used their strengths to overcome pandemic challenges and better service customers.
These examples include:
- Waiving fees on chargebacks and instant funds transfers
- Creating hardship plans with waived late fees
- Allowing customers to pause policies or services during slow business times
By focusing on lessening customers’ financial burdens associated with certain services, FinTech companies can help banks more effectively meet consumer demands and expectations.
This, in turn, creates a more loyal and eager customer pool for the banking industry, helping customers gain more trust for their financial service providers thanks to the support they have received.
Building Trust through Personalized User Experiences
FinTech involves a lot of back-end development to ensure financial processes run smoothly and correctly. However, FinTech’s front-end development strategies are just as – if not more – important.
Front-end development refers to the side of technology, platforms, or applications that customers and account holders use. These are the interfaces they interact with to communicate with their bank and carry out essential tasks, like making payments.
By personalizing the front-end of applications, FinTech can provide customers with help that directly applies to their situation and needs. Front-end development is also responsible for providing customers with the proper resources and navigation to use digital products and services intuitively.
In December 2020, McKinsey & Company published survey findings entitled How US Customers’ Attitudes to FinTech are Shifting During the Pandemic. Through these surveys, they found that:
- 42 percent of respondents reported using at least one FinTech
- 16 percent of consumers use FinTech payment accounts (PayPal, Venmo, etc.), making payment accounts the second most popular FinTech type
- 24 percent of consumers use a FinTech banking platform, making it the most used type of FinTech
By focusing on front-end development during the pandemic, FinTech helped increase the acceptance of digital solutions for banking. This made the importance of building personalized user experiences that garner trust from customers all the more apparent.
The Covid-19 pandemic that rocked the entire world in 2020 is finally slowing down in 2021. As business returns to something closer to normal, we are able to see how different industries adapted during this turbulent time in history.
FinTech was able to provide the banking industry with innovative and digital solutions that helped banks rise above the restrictions of the pandemic.
Not only did banks thrive during the pandemic, but many FinTech services also helped banks to optimize their workflows and cut operational costs. We are likely to continue seeing a sharp increase in the adoption of FinTech solutions as a result.
The success of FinTech in the future ultimately depends on the trust of both banks and consumers. Continuing to focus on customer-centric strategies and building personalized experiences will be crucial moving forward.
Written by Mauro Mambretti, Chief Sales Officer at CPQi LATAM.