5 Ways Automation Can Help FinTech Startups Win Customers’ Trust
Before your customer decides to use your service, they should understand why they should trust you. Here are five technical ways you can go to help them be more confident about your solution.
Over 500 out of 750 companies surveyed by the Capgemini Research Institute in 2018 reported a 60+ percent increase in customer satisfaction thanks to fintech automation. Other benefits of automation? Improved cross-selling, faster service delivery, and, as a result, stronger financial health.
With such effects, automation might be the quickest way for your product or service to earn more customer attention and trust. Moreover, if your solution is competing with banks, then automating any of their services at least partially might help you get a competitive advantage. Here are five ideas you might consider for your fintech solution.
1. Offer more personalized communication with chatbots
Of all the options for financial service automation, this one is the best known and most liked: 95 percent of users expect they’ll use chatbots in the future.
It’s not that people like talking to machines. Rather, chatbots address the most common requests in the most comfortable way — i.e. conversationally — at any time of the day.
Clustar’s research shows that chatbots can cut processing time for support tickets in half or even by a third, not to mention that you can expect way fewer complaints. A couple of years ago, Gartner predicted that over 85 percent of interactions with customers would be handled by chatbots in 2020.
Now is the best time to take advantage of chatbots to help your customers interact with your product or service.
Prominent example: The Swedish SEB bank has two chatbots: Aida for their customers and Amelia for their employees. Aida successfully handles nearly 13 percent of IT support tickets, while Amelia solves internal issues without any delays.
EGO insights: With the rise of specialized software platforms, developing a custom chatbot is a relatively quick venture in 2019. Of course, you need to hire the right experts to get what you want, and the scope of work does increase if you want to take advantage of artificial intelligence and machine learning to help your chatbot provide informed advice, mimic natural language, and offer other smart features.
2. Help customers make better decisions with artificial intelligence
Over the years, AI has been considered one of the most promising technologies for the fintechindustry. (Source: Trends in Fintech And Investor Communications, Mediant, December 2017)
Think of AI as the quickest way to get actionable insights from a huge pile of financial data. How much time can you save your clients on performing manual research and getting through pages of information by providing automated analytics?
In fintech automation software, AI can help clients with tasks such as client profiling, claims processing, legal document analysis, risk assessment, and more.
Prominent example: The Contract Intelligence Platform at JPMorgan Chase recognizes and then analyzes scanned legal documents to provide users with the most relevant and important information. What now takes seconds previously required 45,000 days of human labor.
EGO insights: Developing AI-based functionality can be compared to developing a midsized software project. Once designed, the solution should also be provided with a large enough volume of high-quality training data to make sure it will make accurate decisions. And should there be any new ideas on how to adjust the algorithms after training, fine-tuning may require additional resources.
3. Let your users avoid the routine with robotic process automation
Robotic process automation (RPA) is often confused with artificial intelligence, so let’s be clear about the difference: AI is more about making decisions, while RPA is about taking sets of preprogrammed actions.
According to KPMG, a global network of independent firms offering advisory, audit, and tax services, RPA has the potential to cut costs related to financial management by up to 75 percent.
Typically, robotic process automation is applied in the financial sector to processing customer applications, monitoring compliance, analyzing audit trails, and more.
RPA can be useful if your customers often work with legacy solutions and have headaches with transferring data between different IT systems and validating it. Instead of redesigning users’ established workflows, you can introduce an additional software layer to automate some of their routine tasks.
Of course, if your fintech service relies on manual labor, RPA might be applied to automating parts of your employees’ everyday routines as well.
Prominent example: The Guardian Group, a leading Caribbean insurer, partnered with Sutherland Global Services to develop RPA software to connect new and old systems for processing all kinds of financial data. Thanks to automation, these legacy systems now communicate with each other while avoiding any sophisticated interfaces. This “automation journey,” as the Guardian Group calls it, began in 2017. We don’t have data on KPI changes, but what we know for sure is that RPA eventually helped Guardian Group to expand beyond the Caribbean.
EGO insights: Robotic process automation might seem to be the simplest option to implement in your solution among all those offered in this article, but it depends on the complexity of the routines you’re trying to automate. In some cases, end users might take advantage of existing platforms like UiPath and WorkFusion, so you’ll want to see if you can partner with these or similar services. In other cases, you’ll require a reliable software development partner to be able to maintain and quickly update your RPA features according to users’ changing needs.
4. Create an API for cross-integrations and industry-wide presence
Another way to improve your fintech solution is to let others expand it without your direct involvement. Third parties can build add-ons, plugins and, in particular, automation extensions. To allow for this, you’ll first need to develop an API and find a few key partners interested in building extensions for your service. After a few extensions are in place, your solution will quickly be noticed by other emerging fintech services looking for opportunities to save on development costs by integrating functionality provided by bigger market players.
You might already know that an API can also be a defining feature of a product, as it was for Adyen, an online payment solution that’s now not only used by Facebook, Airbnb, Spotify, Uber, and Netflix but will replace PayPal for eBay in 2020 because it offers lower costs.
An API can be the defining feature for B2B startups offering their clients not just a service but a software solution that requires integration. So bringing automation through an API will work best if your corporate users have software systems requiring tight cross-compatibility with your solution for top performance.
Prominent example: We couldn’t find a perfect example of a fintech startup whose API would be an extra function rather than their killer feature. Yet there are companies such as Trooliothat offer products that are as simple as can be: Through the Troolio API, you can verify your customers with a simple JSON exchange.
EGO insights: Building a reliable API for fintech automation requires narrow expertise in software development and security. You’ll want to make sure user data is safe and encrypted at all times and that the API itself won’t allow any malicious actors to bring your solution down or spoil it with malicious code. This gets even more critical if your API handles money transactions, so seek out the most seasoned software experts in the field.
5. Leverage smart contracts to automate complex transactions
In 2019, the blockchain is used widely among fintech startups to ensure data and financial security.
One blockchain feature that’s often underestimated, however, is smart contracts, i.e. software protocols enforcing the performance of previously agreed transactions. What’s great about smart contracts is that the parties involved don’t need any intermediaries such as brokers, legal advisors, and banks.
Smart contracts have all possible outcomes programmed and automated inside of them so all sides can be sure the agreement won’t be violated. Further details of a smart contract’s functionality depend on the requirements and the context.
If your customers sign agreements with contractors or buy/rent something expensive, then probably you can help them automate agreement fulfillment with smart contracts.
Prominent example: When it comes to smart contracts, one of the most fascinating use cases is buying real estate. This is what Propy offers. Propy lets users buy an apartment from anywhere in the world using an app; the service takes care of the rest and strictly adheres to legal protocols.
EGO insights: You can take advantage of already developed blockchain platforms such as R3 Corda (designed specifically for financial services and not actually a blockchain solution) and Ethereum to offer smart contracts to your clients. There are also services like Etherparty that don’t require any expert skills to create smart contacts. Offering something similar to your clients on your own will require significant time and investment.
The bottom line
Fintech is all about making finances more bearable with technology. There are plenty of technologies able to make our lives easier, but their use and maintenance causes additional problems. To overcome these problems, financial services automation turns out to be the best option for your users: It’s not about making their work simpler; it’s about making it as simple as it can be.
Depending on your fintech solution, you might find various ways to help your customers automate their financial routines. Consider the needs of your users first to make sure what you’re automating will be an advantage rather than an unnoticeable burden.
And should you need a business partner to come up with a new automation feature and implement it in your solution, get in touch with us to find out how we can help.