By Brian Brodie is Group Chief Executive at Freedom Finance with 37 years of experience in the personal finance industry.
For the past decade, technology has inadvertently influenced day to day lives and now determines the way we communicate, consume information and even watch TV. Technological developments have also transformed expectations around services, with customer demand driving change on an unprecedented scale. The personal finance industry is no exception.
Modern technological advancements increasingly allow financial service providers to better meet the needs of tech-savvy generations, who value speed and ‘hassle-free’ access to products. Online chats and automated services provide an efficient way to respond to customers but, as the world continues to digitise, what should not be forgotten is the importance of the human touch. For many, personal interaction plays a significant role in making financial decisions, especially for more vulnerable customers who might need more guidance and support around the options available to them.
It is clear that in the coming years, what will differentiate the most successful financial services providers, will be the ability to merge the best of new technologies with human touch, and adapt services to each customer’s requirements to provide them with clarity on the right options available to them.
Recent developments in artificial intelligence and machine learning bring enormous potential to improve user experiences and help businesses respond to customer needs. Machine learning allows for a high degree of personalisation within the customer journey. It has the ability to learn endless ‘rules’, so systems are capable of learning the right outcomes for each customer at the touch of a button. This allows fintech platforms to give customers tailored options and personalise communication.
Moreover, with the use of advanced analytics, businesses can now identify gaps in the market, allowing them to respond more flexibly to market demands, by launching new products and propositions.
Recent research from Freedom Finance has shown that the modern personal finance market can be an overwhelming place. With customers having access to more options than ever before, 45% of UK adults say that the process of making personal finance decisions makes them feel overwhelmed and anxious. As a result, over a third regularly delay or don’t make important financial decisions. Not consolidating loans or credit cards or not switching to a better mortgage deal, costs UK consumers £18.7 billion per year.
Clarity is what all customers increasingly want. According to our survey, a quarter are worried about agreeing to terms and conditions that they don’t understand, and 44% said they are confused by APRs. What is more, 71% of people across the UK told us they want better clarity from financial service providers about products they qualify for and which are right for them.
Open Banking also responds to modern customer needs and Freedom Finance is among the first lending platform to offer it as a service to customers. Open Banking removes the need for physical documents to be made available and makes the lending process smoother and more efficient for both lenders and borrowers. This single improvement alone can speed up the customer journey from days to minutes. Open Banking allows customers to offer their data to help lenders get the necessary insight into how affordable a loan is, and this can help deliver more tailored solutions with more clarity.
Alongside technology, trust continues to sit at the heart of the customer-lender relationship and remains an essential part of any financial journey. Across the generations, one-to-one conversations with real humans is still valued as an important part of the process of making personal finance decisions.
Taking out a mortgage or a loan is an important decision, and individuals require trust in services to provide them with the right options. This is why, at Freedom Finance, we are dedicated to making it easier for our team to be on hand to answer questions, either by phone or even offering face to face appointments online. Having access to our trusted team allows customers to ask questions and educate themselves on their options, so they can make well-informed decisions about what they are signing up for.
The modern finance market is crowded with options and choice, and customers often lack sufficient support and guidance. It is imperative for successful fintech businesses to strive to offer customers clarity, not just endless choice. It is clear that ‘one size does not fit all’ but using the right blend of technology and human support can make these important decisions easier and clearer.