The exponential growth of technologies and their offerings are profoundly influencing the industries, majorly the Fintech. As fintech is known for speed, agility, and incentives to deliver technology, one of the advantages that established institutions have is the ‘trust’ factor.
As the market expands, the number of competitors in the market is rising, and therefore choices are abundant in the market. But for the new players, the bar for trust is higher therefore just providing new products won’t be beneficial. Helping consumers to become financially stable or healthy is a vital fintech offering, yet it also represents a significant business challenge. Here are three significant ways in which consumer trust is built in the fintech domain.
1. Setting value, not price
As per a study by Omidyar Network, in conjunction with Oliver Wyman, the global management consultancy, fintech firms are now more preferred in comparison to the traditional financial services. Companies need to take a step forward in communicating well with their target audience.
2. Referral arrangements are preferred
The new players in the market consider B2B relationships as their revenue source; therefore they tend to neglect any advertising practices. Companies seek revenue from referral arrangements to avoid conflict amid the interests of their advertisers and their mission to assist consumers’ financial health. The increased consumer benefit can assist in delivering higher conversion rates and greater ROI.
3. Third-party Involvement
Third-party beneficiaries are providing support, and are common as they are one among the financial health-oriented fintechs as compared to the whole sector. The primary reason behind this is the essential services that are being offered-- personal finance, budgeting tools and savings which are often related to traditional services, generate interest or interchangeable revenues. The secondary aspect of this model is the non-financial entities that can derive value from the increased financial health of consumers they have relationships with.
Apart from the significance of revenue models, financial health-oriented fintech companies have understood that it is essential to develop guiding principles that embed their commitment into strategy, culture and processes. These principles are essential for maintaining trust and also a foundation wherein they can answer difficult questions that present themselves as conflicts between customers and revenue.