By Alistair Cotton, CEO, Integrated Finance
The B2B financial services market is fragmented, and the banking ecosystem consists of a network of financial institutions that have historically struggled to communicate with one another, largely because they often work with outdated legacy banking applications. Consequently, this also means they are missing out on the opportunity to leverage valuable customer data and create a more standardised experience across multiple banks, and customers are currently feeling this.
As the ever-changing technological landscape develops, customers increasingly expect highly personalised services based on their individual needs, but fintechs that are stuck on legacy banking applications and tied to conduct regulation are struggling to collect the type of user data that facilitates hyper-personalisation and delights customers.
Collecting customer data is the starting point for customisation
Hyper-personalisation is made possible by the collection of real-time data capable of generating insights by using behavioural science and data science to deliver services, products and pricing that are context-specific and relevant to customers’ needs.
The starting point for this is having the infrastructure building blocks in place that make this data collection and analysis possible. A combination of analytics, behavioural science and UI and UX research capabilities enable companies to develop decisive insights from data, and build products that are able to adapt to the needs of the user.
Build, measure, learn
Since every product feature has to be maintained, improved and connected with other components, new feature releases that are not driven by behavioural user data are often redundant and end up being removed. Hypothesis-led development is integral to the design of personalised tech and services. Eric Ries’ now well-known development principles provide the structure for how many fintechs are today developing products.
When using the model, iteration is essential, as is building the smallest possible product (minimum viable product – MVP) that allows teams to get their product in the hands of customers and test hypotheses quickly. This requires infrastructure that is ready built and simple to implement underneath a fintech’s existing solutions.
In 99% of cases, young fintechs face the need to release a feature or a product while in-house development is either non-existent or getting too expensive. Building your own core banking systems and obtaining a banking licence is virtually impossible for early-stage fintechs; therefore, ready-built infrastructure is a no-brainer. Interestingly, most of the functionality required for an MVP is a baseline requirement expected by users. Ready-built financial infrastructure can free up founders’ time, allowing them to spend more time on how to differentiate their offerings and focus more on developing product capability that’s shaped by hyper-personalisation.
Driving at hyper-personalisation
Building emotional connections with customers is becoming a prerequisite for successful products. Fintechs that are able to capture this ingredient in their product experience are making significant progress in differentiating their brand and multiplying revenues. By being at the forefront of customer’s minds, fintechs that can personalise solutions for customers can also bring in new products that serve customers, creating additional or ancillary revenue streams.
Hyper-personalisation of services also offers distinct opportunities for developing solutions that solve deep problems for as-yet untapped customer segments. Financial products and services for women for example, is one area that has seen rapid development in the last 1 – 2 years, but still has some way to go before it reaches its full potential.
Overcoming obstacles: integrating an API routing layer
Financial services are often built on a stack of third-party vendors, and yet they rarely externalise the knowledge needed for these providers to properly integrate into legacy systems. It can also prove difficult to scale up while maintaining these providers. That’s why Integrated Finance have created an API first, developer friendly routing layer model; it gives a product team the ability to add or subtract vendors easily, as well optimise traffic flow by using multiple providers.
This API routing layer levels the playing field; helping smaller financial service providers compete with bigger and better-funded competitors. Account Management, Payments, FX across multiple providers are all unified; performed through a single, reliable API that gives fintechs the flexibility and scalability they need to enhance their core offering and reduce the time it takes to get a product into the hands of their customers.
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