WTF – What the FinTech?
Overused and Misunderstood
In the past years, there’s been an overwhelming obsession with “FinTech”.
It’s the big shiny thing on the block that screams cool and new.
I try not to cringe when I hear “FinTech”, but I can’t help how overused and misunderstood the concept is. It’s become a buzzword, like “innovation.” FinTech has always existed, but what’s changed is what it represents.
Before we begin let’s just make a distinction between what we would call hard core Fintech (a game changer) versus Fintech lite. If you categorize Blockchain as hard core Fintech then you are on the right track. Blockchain will disrupt our world as much as or more than the Internet did. The opportunity to displace former institutions of trust (banks, trusts, etc.) and for that matter currency as we know it, is real and underway. On the other hand by “Fintech lite” we are referring to UI/UX and digital experiences which are fundamental to the modernization of finance, but really something which has been around for a very long time. For the purpose of this blog, we will discuss Fintech lite.
By “Fintech lite” we are referring to UI/UX and digital experiences which are fundamental to the modernization of finance…
When you see a site with great user-centric design, you are engaging with FinTech lite and you should ask yourself where the tech plays a role. Customers are sold on the value an experience brings. The most valuable experiences are those with a single-focused product. Unlike standard financial institutions that are large, slow, and saddled with product options, FinTechs are able to leverage their unique brand experience, product focus, and technology to offer a fast, clean, and compelling experience.
Don’t forget it – while FinTechs, at their core, are about technology and the product, experiences create additional value that lagging financial institutions are struggling to manufacture.
Photo licensed to BLUERUSH
You can see how the definition of Fintech is confused and enmeshed in basic UI/UX advances.
Human-centric sites act as conduits steering customers and potential clients in the right direction. Usability of these sites can prompt the visitor to reach out to an advisor rather than let their situation linger. Moreover, there are often specific financial tools within the website design that have been hand-crafted to improve outdated methods of say, wealth management, in new and dynamic ways.
These tools are FinTech.
Expending the Definition
As a prospective recipient of financial services, on a FinTech-ified website I could be given an annuities calculator, told of my financial shortfall, given a personalized recommendation, and be directed to contact an advisor for additional help and services. These steps replicate walking in to a branch but use new technology to elevate my virtual experience.
The website acts as a low maintenance, low cost robo-advisor, the intent of which is to motivate the user to ask for additional services and guidance. FinTech gives me access to the same products I would find at a branch, but in a more accessible and personalized way.
This infrastructure is more than just streamlined website design. FinTech disrupts the traditional modalities of finance using tools and methodologies developed from an insightful knowledge of how customers transact financial business.
The Misconception Continues
With the standardization of digital platforms and user experiences, online interactions all begin to feel the same. That’s where the definition of “FinTech” gets diluted and confused with the vague definition of “an online experience.”
I’m guilty of it – just this week I brought up that we should create a “FinTech Experience” by revamping a website for a major bank that wanted to reinvent itself. But I wasn’t speaking about FinTech specifically.
Something truly FinTech would involve disrupting the customer engagement style of this bank in a way that lessens the burden on advisors, allowing them more time to engage with high-touch high-reward clients.
All this must come in addition to implementing human-centric user experience methodologies – something that is made possible by companies that understand how to integrate technology into the financial landscape.
Photo licensed to BLUERUSH
What does this mean for those of us interested in FinTech – buyers, sellers, customers? We must be weary of the terminology and usage associated with “FinTech”.
Don’t get trapped in the buzzword hype.
Good human-centric design should be a given nowadays as those who have not kept up are being left behind. Consultants who modernize UI/UX are a dime a dozen. Disruptive technology that marries elevated customer experience with the precise and knowledgeable application of financial tools is a gated space that requires an exclusive and expert understanding of the financial sector.
Not everyone is able to accommodate these crucial components and you should consider this when making choices about your FinTech strategy. Look out for Part 2 of this series coming soon where we will discuss the fiscal implications of employing Financial Technology.
Since 2003, our tools have helped the top North American financial institutions, including wealth, banking, and insurance, to create empowering and competitive digital financial experiences. We’re revitalizing financial tools and services to help your customers make active financial decisions with absolute confidence in your products.
If you’d like our expert opinion, contact us.