Challenges faced by fintech brands in building trust with customers

Our guest columnist gives his take on how fintech brands can build 'trust equity' in the highly competitive space.

Fintechs, neobanks and new-age financial apps are at the epicentre of a transformation that has taken the world by storm.

Tech changes are helping to make fast payments. The meteoric rise and adoption of UPI in India, is a live testament. UPI payments crossed the seven billion monthly transaction mark in October 2022. Clocking over a billion daily transactions, doesn't seem like a far-fetched goal anymore.

New business models and financial products are changing consumer behaviours and expectations. Suddenly, a massive mall of financial products and services, is available to consumers with a single click. 

The list is long: credit lines, small ticket loans, digital gold, pocket insurance, virtual cards, pay later, spare change investing and contactless cards. And, everybody wants a piece of the action!

The competition is getting hot, and fintech brands need to build their 'trust equity' fast in the ecosystem, as the pie increases. But trust in a brand, is built over time. It only happens after a while and requires consistent effort. Consumer preferences lean towards trusting banks and institutes that their family and friends have banked on for years.

Fintech brands must work harder than their banking counterparts to deliver a trustworthy proposition. They have to push the envelope to grab the attention of their target audience, get trials of their services and retain them over time.

With cybercrime on the rise, fintech brands must ensure their systems are robust and foolproof. Communicating this again and again to the consumers on every interaction helps instill trust.

Brand impersonation fraud is another challenge that fintech brands face, where fraudsters dupe customers by mimicking the brand’s name. Actively educating the customers about these pitfalls and how to prevent them, becomes essential.

Amidst all these challenges, new-age financial apps must survive and build brands in an environment that balances business sustainability, consumer expectation, regulatory and compliance requirements, and growth in a dog-eat-dog world.

So, how does one build trust amongst these challenges?

Here are a few ways fintech brands can build trust that has compounding rewards over the long term:

Personalising customer experiences

As a thumb rule, brands that personalise, leave a lasting impact on their consumers, versus those that don't. Here are a few ways managing experiences can contribute to trust enhancement:

a) Understanding customer segments better and customising journeys

b) Rewarding loyal customers and affirming their positive behaviour

c) Offering curated offers at the right time (instead of one size fits all)

d) Communicating in a language customers understand. Avoiding jargon and enabling vernacular experiences

Clarity and transparency

A vast majority of consumers in our country understand money and how it works. Yet, for many, the experience with financial products has been sour. Convoluted calculations, hidden charges, and complex terms and conditions have made their organic reaction to mistrust whenever they hear an unfamiliar name.

Helping them understand how they are charged, explaining the pitfalls and charges levied, and approaching this challenge with some empathy, can help brands stand out and build long-term relationships.

Flashing medals and badges

For any new brand, building consideration amongst the target segment, is the first battle to win before acquiring customers. Flashing trial numbers, highlighting partner logos, security certifications, success rates, preferred badges, reviews and ratings, etc., come in handy to get a trial chance.

Adding these on wait screens, welcome kits, email footers and social pages can help bolster trust in the consumer's mind.

Collaboration and value creation

Besides the core offering, delighting customers with ancillary value products, helps maximise their experience.

Underpromise and overdeliver should be the mantra here.

Collaborating with a partner brand to unlock different products, sharing a free financial health report or a credit report, or a checklist, and providing a trial experience, are a few ways to achieve this.

Responsiveness and reachability

Promptness in communication, whether a brand broadcast or a customer conversation, is a low-hanging fruit. Brands can achieve this by:

a) Enabling a simple ticketing system to track complaints/escalations

b) Adding chatbots and curated FAQs (better if enabled with NLP & ML, so they get better in time)

c) Adding video recordings of 'how to do this' content

d) Priority support for critical issues and a responsive customer success team

e) Building support communities where power users guide and help others.

Consistency and time

Delivering what is promised, and doing it consistently, is a non-negotiable point that brands must adhere to. Mistakes are bound to happen, as the business grows. Acknowledging pitfalls in service levels and making up for them, goes a long way for brands.

It is important to understand critical moments, whether they're positive (like a loan application approval) or negative (like a payment failure), and err on over-communicating, rather than waiting. The number of people who need better services in the financial sector in India, is enormous, and fintech brands have only scratched the surface.

(Our guest columnist, Hitarth Saini, is head of marketing at Freo)