Fintech is shaping customer engagement: What you should know

2020 and 2021 saw a massive expansion of digital offerings across almost every industry. Many organizations implemented new partnerships to provide digital commerce and payment tools, or even invested in creating their own tools to meet the sudden and urgent need created by the pandemic.

This trend was particularly evident in the digital health market, which has expanded rapidly and is expected to be worth $1.5 trillion by 2030. Companies offering payment processing and insurance solutions have also been on the rise – they were most represented on CB Insights’ list of 2022’s most promising fintech companies. According to Allied Market Research, the global customer engagement solutions market was valued at $18.5 billion in 2021. With a projected compound annual growth rate (CAGR) of 10.2%, it is expected to reach $48.4 billion by 2031.

The strong will survive

Now, however, the companies and solutions supported by that boom have begun to take hold. Some digital implementations have proven to be more costly to businesses and frustrating to customers than they have been beneficial.

For this reason, Forrester predicts that by 2023, a third of digital businesses will reconsider or restructure projects that have proven to be overly complicated and yield little return. The organizations that come out on top will be those that offer truly effective tools, and demonstrate a clear investment in continued improvement.

Fintech Differentiators

The companies that succeed will also be those that operate in sectors with consistent need. Both health care needs and utility payments are inescapable facts, which means the companies working to offer simplicity in these areas have a trusted base of consumers who are deeply invested in connecting to a solution that works for them by offering what they consider most important .

Customer behavior is directly shaped by the need for ease. McKinsey found that 67% of customers prefer digital self-service options to talking to a customer representative – provided those options work. After all, Gartner research suggests that the quality of the customer experience determines 66% of loyalty.

In addition to simplicity, security will be a key factor in determining customer behavior. According to Deloitte, 81% of consumers lose trust in an organization that is the victim of a data breach, and 25% stop interacting with that organization altogether. This applies in particular to companies that handle data related to health and finance, which are particularly sensitive.

The companies that succeed will also offer not only their own set of solutions, but also integrations with solutions that customers are already familiar with and satisfied with (such as Venmo, Paypal, and Apple and Google Pay). Consumers already enjoy this convenience in their payment experiences in other sectors. The need for simplicity, security and top-level integration in digital health and utility payments represents a significant market opportunity.

Key insight

Payments represent one of the most frequent interactions organizations have with their customers, and the best opportunity to either delight those customers and build loyalty, or disappoint them and contribute to churn. Fintech innovations across industries have led consumers to expect a smooth and even delightful experience from all their online payment interactions.

In 2023, the companies that will continue to grow will differentiate themselves by offering truly integrated and efficient digital payments.