We can all agree that the fintech and challenger bank revolution has had and will continue to have an immense impact on incumbent banks. But how is the fintech revolution impacting customers and customer experience? With the onset of fintech and new banks, customers were expected to avail of a seamless digital experience, beautifully designed products and services and new services and ultimately leave their old banks.
Has this happened? Are fintechs and challenger banks providing significantly more customer delight? If yes, why? If no, what went wrong? And importantly, what can old banks learn? I believe we are now at a point in the revolution to begin to explore these questions.
In order to determine if customers are delighted, and delighted enough to jump ship from their old bank and make what is typically a secondary account their main account, we must explore two essential areas in the banking customer experience where fintechs are still often failing:
The basics of bank services
1. Customer support
Customer support is an area a lot of fintechs and challenger banks fail in. In the instances of Revolut, Kontist, and N26, customer support is only available via in-channel messaging.
In the case of both Revolut and N26, customers are prompted to have their query answered by a bot which points the user towards FAQs of basic queries, before being passed on to a human. Waiting times can vary widely which can be annoying when you need something and are not a premium customer (Revolut and N26 both offer enhanced customer support in their top tier products).
However, with less-established banks and fintechs like Kontist and Tide (UK), customer support is sometimes literally non-existent. In September my Kontist account was compromised (more on this in the next section - 2. The Basics) on a Friday and I was unable to speak to a human until Monday morning!
This could be due to the size of Kontist (c. 40 employees). They appear to have a few dedicated customer support staff, and do not have the capacity to provide round-the-clock support. For instances where accounts are compromised, or immediate payments are needed, a lack of customer support is likely to be a deal breaker for customers.
In this instance, I truly wished I was a Deutsche Bank customer.
2. The basics of bank services
Making payments and accessing one’s money is the minimum a bank or unbundled FS product or service should offer its customer. While the traditional banks have had their share of issues with accessing funds and making payments, fintechs are also not immune to this. In these instances, the level of information provided to customers is often vague, which can frustrate new and loyal users alike.
It’s important to understand why new banks and fintechs are prohibited from providing the basics. These fintechs typically use BaaS providers and or third party card issuers in order to scale quickly or build their customer base while waiting for a banking license.
I experienced yet another disappointing experience with Kontist. One day I was unable to make a payment online and after half a day of waiting to get in touch with Kontist, I was informed that the debit card was unlinked from the account and that I had to wait approximately five more days.
From what I understand, this was an issue from Wirecard, not their BaaS provider, Solaris. Their advice was to transfer any necessary funds to another account I could use. Nobody from customer support informed me when my card was working, and the onus was on me to follow up. Imagine you are an SME and your only account is with Kontist and you are prohibited from running your business for more than 5 days? This is just unsatisfactory for a paid service and actually led me personally to close my Konist account.
Another instance with Kontist was a request for a change of address for a new card, after my account was compromised (see 1. Customer Support). Due to the fact Kontist uses Solaris as a BaaS provider, and Solaris is essentially the “Bank”, Kontist must send the address request change to Solaris. This took three days and was coupled with a wait of 5 days to receive my card in the post.
This took three days and was coupled with a wait of 5 days to receive my card in the post.
Revolut is another example of a fintech which has had its fair share of instances in which customers are unable to access their money or make payments. Revolut has sometimes lacked complete transparency in explaining to customers why their accounts are frozen, so it’s unclear to us if this is due to KYC / AML or an inability to scale up.
Who is getting it right?
In my opinion, two brands stand out in taking a proactive approach to delighting their customers: TransferWise and Monzo.
They are obsessed with customer experience, and this shows in their approach to customer support, the basics of bank services, price points and design.
I cannot stress enough how important having good customer support and basic access to payments and account access. Without these two, fintechs and new banks have no way to truly delight their customers. Getting these wrong means that their customers cannot truly appreciate their alternative pricing models, beautiful design and intelligent digital features.
What does does delight look like?:
Monzo personalising and expediting the chargeback process. For example, I had a duplicate transaction and Monzo informed me it would be quicker to contact the merchant directly rather than initiate the chargeback process. The merchant’s website was only in Norwegian and the Monzo rep navigated the website for me and provided me with the contact email within minutes. Superb!
The Monzo Help section includes the last three transactions for an easy means for disputes.
The provision of immediate and real-time updates in the event of payment outages (we all remember when Monzo was hit by the same outage as Revolut, Loot and other UK fintechs)
Pre-emptive prompts about how current events may impact the ability to transact. TransferWise pre-warned customers that payments in GBP will be limited to £10,000 per day on days with key Brexit votes.
Owning up to mistakes. TransferWise once failed to deliver a transfer from GBP to USD twice and offered me free TransferWise for life, on any transfer regardless of size. This may be an extreme example, but owning up and offering small compensation really makes a big differences.
These are just a handful of examples of the new ways fintechs and challenger banks are trying to attract and delight customers away from the incumbent banks. There are a host of other amazing brands out there that have found the right balance between obsessing over customer experience, scaling at the right pace, and not overpromising what they can deliver. Overpromising is unfortunately becoming the norm and we will be covering this in a future article.
The biggest learning that old banks can learn from the successful brands is how to take a truly customer-first approach in the areas that matter. Releasing a new shiny feature or cool new partnerships will be rendered useless if the basics are not on par with the latest thinking from fintechs. Old banks looking to digitise their support functions should take a long hard look at the brands that are failing in this space and capitalise on both their what they get right and wrong.