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The potential for financial technology grew in 2020, as consumer-directed personal money management became more popular than ever amid the pandemic. Around 50 per cent of customers use banking apps or websites weekly, according to an Accenture survey of 47,000 customers. That’s up from 32 per cent in 2018. And 76 per cent of millennials use an investing app at least once a week, according to the Q4 2020 Streetwise financial report published by E-Trade in October. From increased use of online banking apps to the individual investor boom, the trend is expected to continue in 2021.
But as with any industry, simply providing a service or technology isn’t enough for a business to thrive. There must be greater efforts to lure consumers and earn the right to keep their business. According to a December 2020 Accenture study, business growth and consumer trust improve when banks “infuse humanity and personalization” into their digital service. Establishing a personal, online connection with customers, zeroing in on the target audience, and presenting an easily accessible user interface, can attract and engage customers in the long term. And the key is not to just check the boxes, but also to execute these tasks at a high level.
Personal connection in the customer experience
Despite the ever-increasing lean on online transactions between customer and provider, that does not equate to consumers desiring less of a human touch. During the COVID-19 pandemic, a lowly 27 per cent of financial services customers thought of the industry as “customer centric”, according to Salesforce. It’s of no surprise then that leaders in the industry admitted that improving customer experience dropped from first in 2019 to fifth on their list of priorities in 2020, according to a November Salesforce survey of 2,800 industry heads.
One such Canadian-based firm, Stock Sharks touts their ability to provide that personal touch with a mantra of quality over quantity. Operating in the finance field as an investment resource, the education technology company specializes in research, education, and, notably, online community. It helps both the individual investor and hedge fund to learn about the markets from seasoned traders. In 2020, Stock Sharks debuted a custom chat interface to allow its members to more easily communicate directly and quench the appetite for investing data. The three-year-old global company claims that it has an annual growth rate of 65 per cent. The development of the online community with individualized access, plus an influx of new traders and investors in the market, has contributed to much of Stock Sharks’ success.
“Any single one of our members can FaceTime myself or anybody on the Sharks team for questions and a walk-through in any particular situation,” said Sheraz Ali, co-founder and head of community, education, and research at Stock Sharks. “Our one-on-one relationships with our members are next to none compared to our competitors.”
Connecting a Niche Customer to a User-Friendly Interface
As consultant and entrepreneur Patrick Brewer wrote in 2019, identifying the niche consumer directly affects sales and the ability to cultivate a positive customer experience. Marketing efforts should ditch abstract strategies meant to cast a wide net. Instead, businesses should target specific demographics to attract clients, following up with individualized services to maintain engagement.
Focusing on a niche segment helps a business in specialization, especially in today’s competitive world. To find a niche, the first step is to do thorough market research and identify the gaps in the market. This is followed by finding problems in the industry that can be solved through a cost-effective solution. The practicality, profitability and persistence of the solution is then tested on a small sample. If the solution is optimal, then a niche can be developed targeting the people who face the problems. With the increased competition, there might be tens or hundreds of companies working in the same niche. Then, we need to build a user-friendly interface for our solution that makes it less of a professional business and more of a personalized service.
A user-friendly interface helps to improve conversion rate and increase revenue. Utilizing clear calls-to-action through keeping language short and clear, incorporating subtle design elements, leaving enough white space to breathe, having consistent fonts, having thorough FAQs, limiting jargons and making the ‘Contact-Us’ to stand out. Consistent branding should be integrated and the content should be cohesive with the requirements of a lay-man customer.
Tapping into unconventional zones
Fields like Healthy Fast Foods, Tiny House Constructions, Ethical Business Consulting, Website rentals, Raw Pet Foods, Dry Car Wash, etc. are picking up. These are untraditional zones where the niche market is small but the customer loyalty and reason for switching in high. Even in the digital finance world, such unconventional opportunities lie vastly. Ease of digital use consistently adds value to a financial business bent on attracting and engaging with their customers.
Rapid Filing Services’ self-directed tax filing website allows customers to manage multiple tabs at once, an open plan in which they can easily manoeuvre between forms. And since it established Prior Tax in March 2006, it has evolved into the top online tax filing service for prior-year tax returns. Prior Tax clearly has a target market: people who are behind on filing their taxes. And its competitive advantage stems from personalized customer service available on multiple channels, from phone to live chat to social media. All easily accessible even before, or if, a client ever chooses the service.
“I think prior-year customers usually have some hesitation to file because their tax returns are already late and they have an innate fear of the IRS,” said Willem Veldhuyzen, founder and president of Rapid Filing Services, which serves about 30,000 customers each year. “Our key differentiator is us being able to reach out to them and help them understand their situation, and the access to the other services such as tax advice, professional review, a CPA, and to a live person who will help give them peace of mind.”
Fintech business investments in the United States grew to over $100 billion from nearly $2 billion from 2010 to 2018, reported The Pew Charitable Trusts. More than half of that investment happened in 2018, evidence of the strength of the industry and growth expectations. That strength and growth are eventually measured not only by capital raised but by customer sales. Oracle’s 2020 survey of 93 financial service executives gave a glimpse of the value of customer experience to business success. Almost half (45 per cent) listed fulfilling customer needs and demands as the top customer experience objective in the next 12 to 18 months. Achieving that goal is not a one-step process. Companies such as Stock Sharks and Rapid Filing Services have not just focused on one element of the customer experience, but rather an amalgamation of improved digital interfaces and identifying niche groups then delivering to them human and accessible service to grow their business and brand.