Fintech is a big deal.
What makes it such a powerful tool is how it works to effectively position your Financial Institution as an advocate your account holders.
Let me share a recent example of what a danger legacy business practices are in a world that has moved on.
I recently had to use one of those big box office supplies stores’ ‘business centers’. They tout their state-of-the-art production facilities and how they’re built to help ‘you’ get your work done better, faster and smarter. Yet for all the hype, when I asked how much it was to fax a document, their first question was, “Is it long distance?”
Long distance. In the age of mobile phones and the Internet. I asked why it matters in today’s mobile, interconnected world. They said long distance was extra. But that wasn’t the end of it. When they quoted me $2 a page for faxing – long distance - a document, I decided to scan it. I went to pay and I was told my card would be charged a $5 deposit – not toward the cost of my project, but a $5 fee that would be credited back to me in a couple days.
That means they charge me a high price and on top of that, hold onto $5 of my money for a couple days on top of it, for no particular reason, other than they can. You may be shaking your head at this kind of top-down business model. Or maybe you're not, which is kind of concerning. But it’s not as unique as you may think. A lot of companies in a lot of industries have been continuing their legacy business models and not adapting to the modern world.
Is your financial institution one of them?
Because banking is so regulated, building in fees and various other types of revenue boosters have been a long established practice. But today, technology is changing the way neo-banks and fintech firms find opportunity without leaning on these age-old fee models.
They are completely re-thinking the model and looking to a new way to market to customers. They are using marketing tools to better understand their customers and are finding ways to better target the needs of individual customers. They are curating the banking experience on a granular level. They are making it as frictionless as possible and as user-friendly as possible. They’re making it accessible and convenient for the customer, not the FI. But all this doesn’t mean you have to go out and buy a bunch of new technology. You already have the most important asset that any neo-bank or fintech could desire – customers that know you. You have relationships and that is the most valuable possession of all. What you need to do is to show those customers – consistently – that you are there for them, and not vice versa. You need to make it clear that you understand that if it wasn’t for them, you would not exist.
Advocacy doesn’t need the latest and greatest fintech tools. But if you have an advocacy-focused organization, then fintech can take it to another level. Finding ways to leverage your core advocacy role with technology is where FIs can make a huge leap in growing their base and increasing their business in an increasingly competitive world.
By leveraging your core competency for advocacy with new tools, you have a powerful advantage of building an experience that is customer-focused and customer-driven. It’s not computer science – it’s good common sense. And the best thing you can do for your business.