At the end of the day surely a bank account is a bank account and an ISA is an ISA, right? Fundamentally it’s correct there are only so many ways that you can put a cash card into an ATM and draw out money – but for me it’s the provider’s customer experience (CX) that is the biggest differentiator, that and combined with their available rates and other associated costs.
Traditional financial services providers, such as Lloyds, HSBC, Travelex are hindered by their size, legacy technology stacks, risk-averse processes all which are severely limiting their ability to innovate.
Fintech companies such Revolut, TransferWise are majorly disrupting the market with more agile business models, systems built from the ground up using the latest technologies and a customer experience which is designed for the mobile user first – a potent combination.
To give you an idea on how different the customer experience is with ordering something as simple as a new card. I recently went on a snowboarding trip to the US and 2 weeks before I went I carried out my market research and decided to order a Revolut global money debit card and a M&S credit card.
A week after I filled my online application for my M&S card, I received a huge bunch of paper work through the post, which all needed to be countersigned and sent back by post. Needless to say, I didn’t hear anything back before going on holiday without my M&S card. When I got back from holiday, I had problems activating it online as it kept asking for a specific code which was not in any of the correspondence. Giving up online, I called their automated customer service line, and finally managed to activate the card without requiring the above code (which begs the question why did they need it in the first place for activating online). The whole process took over 3 weeks, a mountain of paper work some of which needed to be sent via post and a card I didn’t use because it didn’t arrive in time.
In contrast, I first of all downloaded the Revolut app, within a couple of mins I had registered and ordered my card from directly within the app with the physical card being delivered 2 days later. Now it may be a clever marketing gimmick, but the card arrived in some very smart packaging which made me smile when I opened it up
When have you ever said that about receiving a finance product before? And finally, the app even allowed me to set my own PIN number – so no needing to remember another obscure code which I’ll easily forget within a day. Time taken to go live – 2 days, no paper work and one happy customer.
Now I realise this is just a one-off example (and in M&S defence there’s probably more hoops you need to jump through to receive a credit card) but I’ve got a feeling that Fintech companies across all the different sectors are disrupting traditional finance services due to their different and innovative way of thinking in everything that they do which delivers a far better customer experience. For me this is reason why traditional financial services need to be worried – because before long if they don’t change the way they do things they’ll end up being obsolete only serving legacy products to legacy customers. Which can’t be good for anyone.
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