Fintech transformation amidst evolving client expectations

Digital transformation needs to be grounded in the reality of evolving consumer expectations. The last three years have seen a radical change in what consumers expect and how they interact with their financial services providers, across retail banking, payments, and e-commerce. Consumers today are acutely aware of the impact of rapid digitization trends. Their choice of a digital platform or a financial service depends on the seamlessness and agility of the service offering. 

Taking a cue from consumers, fintechs are developing immersive hyper-personalized digital journeys across channels. They are leveraging new and emerging technology to provide better analytics and real-time insights, and improve time to market with frequent functional releases, faster data conversions and implementations. Offerings are further enhanced with fully integrated and interoperable products that are deployed securely on a hybrid cloud, at an optimal total cost of ownership.

Amidst a rapidly evolving ecosystem of financial institutions, merchants, payments and e-commerce networks, and governments, fintechs are pivoting toward new use cases, new partnerships and new ways of doing business. Examples include instant lending for small and medium businesses with AI-based credit decisioning platforms, digital payments within a social circle of trusted people, and point-of-sale ‘buy now pay later’ (BNPL) options for online and in-store purchases, as well as online know-your-customer (KYC) onboarding underpinned by AI technology capable of detecting ‘deep fakes’. Here are three key priorities that can drive success for established fintechs re-inventing themselves to keep up with rapidly evolving consumer expectations.  

1. Leveraging The Application Programming Interface (API) Economy 

APIs allow fintechs to connect with new business partners, offer their services in existing markets, and open access to new markets. Many fintechs choose to monetize their platforms via APIs. This inspires developers to create new use cases to improve and extend existing products and services, making it easier to build newer products and offerings while creating an API economy. The API economy is a key enabler for turning products into platforms and creating a network effect by building vibrant marketplaces and contributing to efficiencies, growth, and innovation for enterprises. Leveraging public APIs that power consumer-facing apps, fintechs are now engaging with customers directly via mobile devices, social apps and in the metaverse. Through private APIs, fintechs offer employees and partners new and innovative tools to better serve their customers. 

Embracing standards such as “open API specification” enables interfaces that allow humans and computers to discover and consume services without access to source code. Open platforms also strengthen security by enabling the use of tokens, signatures, and encryption, for example, banks that use external APIs can offer smarter and more efficient ways to conduct banking transactions.

2. Designing Immersive Experiences By Leveraging Data Insights 

Fintechs excel at deriving meaningful insights from data. With the emergence of 5G, augmented and virtual reality and the metaverse, companies have access to more information about their customers than ever before. And, with streaming data immediately available through these platforms, companies have the capability to respond to customer choices in real time. By acting swiftly on those insights, fintechs can offer targeted services exactly when they are needed, and even enhance end-user journeys across channels, with advanced data analytics and event-based architectures allow dynamic routing of customer events for faster delivery of goods. 

3. Hyper Personalization Delivered in Real Time

A significant proportion of technology investment today is dedicated to transforming customer experiences to be more differentiated, immersive, secure, and personalized. Fintechs are leveraging emerging technology to design solutions that delight customers, regardless of how digitally naïve or native they are. These solutions combine demographic and psychographic data with past behaviors and preferences while taking into account consumers’ current context and location. In the past, most products were designed to offer systemic and consistent responses. Today, products are being architected to provide flexibility to meet real-time customer preferences and allow them to re-arrange user interfaces intuitively and dynamically for a personalized look and feel.  

Driven by the rise of digitally native consumers, increased digital adoption and relentless demand for personalized experiences, fintechs have the perfect opportunity to assert their role in the global financial ecosystem. Successful fintechs build a pervasive culture of product differentiation, deep client centricity and intelligent automation. It is the perfect storm of innovation where the consumer is the ultimate winner.

The article has been written by Sachin Kulkarni, SVP - Delivery, Global Services, Fiserv