3 Proven Financial Services Growth Tips From FinTech Leaders

How do the most successful FinTechs build and scale so fast? What are established financial institutions doing to successfully keep up? Discover the top proven success tips from FinTech leaders on the operational decisions they've made that had the most significant impact.

1. Simple Changes Matter

Many believe that big tech firms thrive because they juggle numerous projects, but if there's one takeaway from the golden age of Silicon Valley, it’s that simplicity is always the answer.

Google, for instance, has 271 products, yet advertising accounts for 80% of its revenue. Uber's product-led growth (PLG) team made a single tweak to their app that doubled conversion rates in 2017, outperforming all other product changes that year.

There are straightforward adjustments you can make to processes that can have an exponentially larger effect than the resources required to implement them.

For example, in 2021, insurance and pension provider Aegon significantly cut down on their paper and print output with a single system change - secure email. This was a simple solution to implement but had a profound impact on their bottom line.

“This dramatic reduction in the need to print and post important paperwork is one of the key ways that financial services companies can make significant CO2 emission savings by examining their day-to-day operations. Invariably, this will mean digitising processes to create greater efficiency, security and regulatory compliance, discarding legacy ways of working which are inconsistent with net-zero targets.”

— Ronnie Taylor, Aegon’s Chief Distribution Officer

The secret to identifying the simple changes with the potential for the greatest impact on your bottom line is in the data and asking the right questions. Start by looking at the significant costs in your budget or where processes are most stagnant.

Your business analysts and systems teams are invaluable in this process. Do you know the impact of paper and postage on your budget?

2. Customer Amid Chaos

In a time of unprecedented disruption in financial services—pandemics, challengers, technological innovation—customers can easily be forgotten.

Today’s consumers are more discerning than ever. In a constantly changing world, they want to stop reacting to events and create the life they desire.

The ease of account migration has led to a surge in bank account switching. Between October and December 2021, close to a quarter of a million switches (248,902) occurred. This is 36,302 more than in Q3 2021 and 59,629 more than in Q4 2020.

Interestingly, as Deloitte has termed it, this “loyalty crisis” isn't driven by cash incentives but by service quality, with challenger banks benefitting the most.

People want assurance that companies align with their aspirations and prioritise their best interests.

While it's easy to get overwhelmed by technology, data, and complexity, leaders who succeed are those who focus on customer-first business principles.

“Get back to first principles [...]. The financial services and fintech sectors have a perception of being very complicated and difficult to thrive in without prior experience. However, every industry has its own challenges and complications. Don’t be afraid to dive into complex topics, break them down, and understand them. By taking the time to understand what a business’s goals are, who the customers are, and how the products help those customers, things quickly become clearer.

— Liza Haskell, Chief Administrative Officer, Tide

Always ask questions to uncover the "why" and "how" of projects until you can clearly articulate how they will benefit customers.

Encourage your experts to simplify complex topics, processes, and technologies. Never shy away from being inquisitive.

3. Do Automation Right

Even before COVID-19, there was a growing need for increased digital enablement for staff. The pandemic has only intensified this demand.

Various business units are competing for resources to develop automation for Full-time-equivalent (FTE)-related ROI—essentially, replacing manual work with digital processes.

It's crucial to take a broader view in this scenario. Gartner's 2021 CIO trends report predicts that by the end of 2022, 25% of automation business cases will fail because they focus on FTE reduction rather than customer satisfaction or new revenue. Again, business principles should guide these efforts.

Gartner's report highlights that in attempting to reduce manual work within specific process stages, leaders often overlook how critical edge-case work performed by employees can be to macro-level processes.

"Employee resistance and a lack of focus on business process outcomes are the two most common pitfalls that come from relying on headcount reduction as the key business driver for automation projects. When project success is predicated on the ability to eliminate FTE, the full replacement of a person’s activities becomes the project driver rather than process improvement."

— Fabio Chesini, Senior Director Analyst, Gartner

The aim for any automation initiative should be bottom-line driven. Start by analysing metrics such as resource costs, process completion rates, SLAs, and the manual time required for processes across all business units.

Involve employees and experts to ensure automation addresses every edge case, and design systems with enough flexibility to monitor, optimise, and adapt for continuous improvement and bottom-line success.

References:

Impediments to Scaling Your Startup, OpenView Partners, 2021

Is Google Advertising Revenue 70%, 80%, Or 90% Of Alphabet's Total Revenue?, Forbes, 2019

Uber's Simple Change That Doubled Conversion Rates, TikTok, 2017

Upsurge in Customers Switching Accounts for Better Online Services, Finextra, 2021

As Consumers Move On, Stay Close, EY, 2021

Deloitte Risk Advisory Services, Deloitte, 2021

Are You an Aspiring Woman in Fintech? Here Are 5 Tips From Industry Leaders to Help Your Career, The Fintech Times, 2021

Predicts 2021: Banking CIOs Must Digitally Enable Employees to Support Transformation, Gartner, 2021

Reviewed By:

Sabrina McClune, 19.06.24

Sam Kendall, 19.06.24