In a recent blog post at The Financial Brand, Ron Shevlin, director of research at Cornerstone Advisors, makes some excellent points about changing expectations in the financial services market. After pointing out that start-ups like Rocket Mortgage, SoFi, and Kabbage are offering financial products with easy applications and rapid decisions (they deliver answers in 15 minutes or less), Shevlin points out that Fintech startups have established new benchmarks for what it means to deliver “convenient” financial services.
He writes:
Fintech startups are capturing a market position that is important to a large and growing number of consumers: the “most convenient” position….
Convenience (as a strategic differentiator) is driven by demographics. Younger consumers — without complicated financial lives, without a lot of money to manage and invest — value convenience over service and advice. With the influx (more like tsunami) of Millennials into the market over the past 10 years, convenience has become the dominant basis of competition.
Fintech startups are establishing the bar for convenience.
Are these startups making bad lending decisions? Consumers don’t care. All they see is that the process takes a tenth of the time and effort that it does with traditional FIs. And when the “customer experience” is all about the application and onboarding processes — because service and advice aren’t as important to applicant at this stage in their financial life — the firms with the fastest/easiest process become the “most convenient” in the eyes of consumers.
Being perceived as the slow laggard in the market is not an enviable position. But that’s where many traditional FIs are these days.
If “convenience has become the dominant basis for competition,” then financial organizations of all kinds need to assess their product offerings in terms of convenience. As Shevlin points out, simply offering longer branch hours isn’t the cutting edge of convenience if a competitor enables first-time home purchasers to apply for mortgages on their smartphones and receive approvals within 15 minutes.
Building Convenience into Your Financial Products
Are you capturing your share of this fast growing segment of consumers? Do you offer mobile services that still require applicants and customers to visit branches and storefronts? Does missing your new customer growth targets keep you awake at night?
DSi can help. We offer complete solutions for mobile account opening for DDA accounts, lenders, and other financial organizations. We have ready-to-use services for identity document authentication, automatic form-fill, identity verification, and real-time product segmentation. We can help make your online services more convenient for new customers in all markets.
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