One of the biggest changes to come from the coronavirus pandemic is the effect it’s had on consumers’ expectations. The increased reliance on digital solutions has, in turn, opened people’s eyes to the convenience (or inconvenience) of managing their financial affairs online.
Yobota recently commissioned a survey of over 2,000 UK adults to explore how satisfied customers are with their banks in 2020. The majority (58 percent) said they want more power to renegotiate or change their accounts or products, with a third (33 percent) expressing frustrations at having to choose from generic, off-the-shelf financial products.
Demand for greater control and more flexible, personalised products is on the rise. These demands can be met, but only if financial institutions and technology vendors are progressive in the development and application of fintech.
Whether banks build it or buy it, there is a fundamental need to understand how fintech is created. And, moreover, how to do it well.
Addressing the regulation barrier
Finance, and by extension fintech, is a heavily regulated industry. A fintech creator’s ability to navigate the regulatory landscape and ensure it remains compliant with all the necessary checks is key to winning the confidence of the public, as well as potential clients and partners.
Often, a huge volume of work is required. Rules can change over time (even temporarily, as we have seen in some cases this year), and there’s always room for interpretation in the principle-based regulatory approach.
Having a team of compliance experts on board is crucial to effectively handle any regulatory demands, particularly as the business scales – both in terms of its user base, and as it crosses borders into new regulatory environments.
Businesses must always remain forthcoming and transparent about the steps they are taking to protect the consumer, and consequently the reputation of their business partner(s).
What problem are you solving, and who are you solving it for?
It is easy to overlook the basics when you set out to bring a new product to market and instead get bogged down in developing features. I would encourage vendors to take a step back and consider the bigger picture before delving into the technical aspects of product development.
What challenge are you going to solve first? Is it an issue related to payment infrastructure, insurance, or investment management? Fintech is an incredibly broad industry, so it’s important to be clear on your goals. Are you going to improve or replace something that already exists, or are you looking to bring something entirely new to the market? These are all questions that should be asked in the very initial stages of development.
Features are important, but they are often a secondary reason a customer will buy or use a product. So, it’s important that your offering provides a valuable solution to a very specific problem before worrying about the finer details.
To that end, knowing your client is crucial. Product and engineering teams need to have a clear focus as to their end goal and have a strong understanding of who they are building the product for.
A technology vendor must be specific and strategic when it comes to pursuing the right clients (a particular type of financial services firm, for instance), while also keeping in mind the cultural fit between their team and prospective partners. Ensuring there is a mutual understanding of what the overall vision is and how it will be achieved – including the practical implementation, timeline and costs – will establish a strong foundation for the business-to-business relationship.
Aligning the best technology with best practice
Meaningful digital transformation is achieved when the best technology aligns with best practice. Developers must resist the urge to jump on the latest technology trends, which might, at best, increase the cost of development or, at worst, significantly set back progress.
Effective innovation ultimately comes from creating a stronger value proposition for clients. If exciting new architectures or programming languages don’t achieve this, then it is best to leave them out of the equation.
Fintech needs to be created in modern ways, with proven foundational principles in mind. Engineers must be certain their product will remain relevant and valuable for years to come, even if they are no longer there to support it.
The end user is key
The coronavirus pandemic has made it patently clear that the most successful finance companies are those that have formed partnerships to create technology which can be used seamlessly between separate banking products and accounts. Yobota’s aforementioned research is evidence of that; banking customers are becoming increasingly frustrated with inflexible products and services.
The quality and functionality of digital solutions is going to remain of utmost importance going forward. Once people have a taste for the speed, ease and convenience of being able to manage their finance affairs digitally, they will not settle for a return to in-branch meetings, lengthy telephone calls or slow exchanges of paperwork.
That is why the voice of the customer must always drive development roadmaps. After all, the happiness of the end user is the strongest indication of success.
Fintechs must consider how they can deftly leverage new and advancing technology to continue to make the customer experience even better, while also improving their underlying product. Interoperability – the ease of integration with other providers – is also an important consideration to bear in mind.
Progressive fintech promotes partnerships and interoperability to reduce the roadblocks that customers encounter – and it will find innovative ways to bring all of these services into one product.
The success of finance companies in the months ahead will, in no small part, be determined by their ability to keep pace with the technological change that is taking place. There is no doubt that developing fintech solutions that are fit for purpose in today’s market is a tall order, but the reward comes from seeing the difference it makes to businesses’ and consumers’ everyday lives.