Almost half of Americans feel their financial health is worse now than it was before the pandemic, but the good news is that most people place a lot of trust in financial institutions to help them navigate this uncertain time. More than 80% of lower- and middle-income families want to receive information and resources about managing their finances from their banks.
This is an opportunity for banks to utilize fintech to help build trust, customer wealth and their bottom line, all at the same time. It’s also important for fintech companies to ensure that banks know what they can do, who they can help, and how easily their products can be adapted into existing bank transactions and strategies.
When banks help link their customers to financial resources they need, these customers are less likely to default on their payments or loans. This approach also promotes loyalty, which is a good business strategy for banks to keep their customers for the long term.
Banks today are much more agile and more innovative when it comes to helping struggling customers. Fintech can intensify those efforts and ensure they are personalized for the customer, scalable for the bank and easy to deploy.
Banks have been around for decades or even, in some cases, more than a century. Fintech companies are the new kids on the block, and it’s up to these start-ups to make sure banks know who they are and what they can do — and deliver on expectations.
There are a number of ways for fintechs to make sure banks know who they are. Fintechs can leverage their existing relationships with banks to showcase their successes and in doing so, attract more banks and financial institutions. But to do so, fintechs need their partners’ help.
One way to help prove their company to new audiences is collecting testimonials and case studies that showcase unique ways in which fintech companies can provide assistance. Fintech companies should put an emphasis on documenting their successes and looking for ways to share those successes.
Plenty of studies have already been done showing exactly where people need help. For example, the three areas where Americans need the most professional help right now are: paying down debt (28%), retirement planning (26%) and investing/portfolio management (24%). Fintech companies involved in these areas can utilize this kind of information to show the importance of their product to new banking customers.
Fintech companies should also be on the lookout for incubators run by banks or financial institutions. This allows fintech companies to put their product in front of potential customers, and prove why their concept, solution, or product is better than others. It can also give new companies access to valuable tools such as office space, advice and networking with potential partners and investors.
Today, there’s a greater awareness that communities have diverse needs, based on their geographic location, population, culture and history. But for large banks, it can be difficult to personalize services. Fintech tools can help banks understand where neighbors are struggling and the best way to provide resources or products to help them.
For example, minority communities are more adversely affected by inflation and financial issues stemming from the pandemic. According to NPR, 55% of Black and 48% of Latino adults say they currently face serious financial problems. One in five 5 Black and Native American adults say paying for medical care or prescription drugs is a serious challenge.
Fintech can help banks understand more about the communities they serve and, on a larger scale, find specific solutions to help banks tailor their services. They can also help individuals understand more about their own finances and make decisions that keep them financially stable, even during challenging times.
People today can do most of their banking with their mobile phone, but there’s still a way for banks to make their customers feel good when banking with them. It’s less about the awe of a beautiful building with shiny, marble floors, and more about making sure customers feel stable in their own finances, with access to the resources they need and a feeling of support in time of need. This matters.
To do this, banks must keep up with the latest changes in the fintech ecosystem, understand trends and keep up with technology. At the same time, fintech companies need to make sure banks know who they are and how they can help people in all communities maintain financial health and wellbeing.
Rochelle Gorey is co-founder and CEO at SpringFour.
