The fintech industry in the United Kingdom has been leading the way in terms of innovation, but the sector has seen its investment levels sink to a four-year low. Despite this, the UK remains the dominant player in European fintech. For many fintech firms looking to expand, the United States presents a land of opportunity, given its lag in certain key areas such as the adoption of open banking, fast payment systems, and truly mobile-first experiences.
However, the road to success in the US for these fintech companies isn’t as simple as transplanting their UK strategies across the Atlantic. This article delves into the unique challenges and opportunities these firms face in the US market.
A new kind of disruption
One key difference between the banking landscapes in Europe and the US is the digital infrastructure. Despite an increase in digital adoption, approximately a third of Americans still rely on the proximity of a physical branch as a deciding factor for their banking needs. This contrasts sharply with Europe, where fintech success has been built on a robust digital-first banking atmosphere.
Consequently, European fintech firms cannot simply rely on their digital prowess to win over US consumers. These companies must consider ways to provide in-person experiences that complement their digital offerings. This could involve integrating call centre services into their mobile platforms or rethinking onboarding processes to include offline touchpoints.
Building on existing strengths
Fintech companies built their success on providing hassle-free banking experiences. To carve out a niche in the US market, these firms need to build upon their strengths. This involves delivering increasingly personalised and engaging experiences to their customers.
Anticipating customer needs, rather than merely responding to them, will be vital in the next phase of fintech customer experience (CX). For instance, customers could be reminded of an impending late fee, creating a more trustworthy user experience and fostering a sense of partnership with the bank.
CX as a strategy, not a tactic
For many banks, enhancing the customer experience has been a process of incremental improvements. However, the success of fintech firms has highlighted the need for a robust customer experience strategy, built into the digital infrastructure from the outset. Fintech firms like Starling have excelled in this area, creating a modular banking platform that delivers exceptional customer experiences.
If successful in acquiring a US bank and rebuilding it on the Starling engine, the company will not only export its software but also a new operating model focused on superior customer experiences.
The land of opportunity
While the digital-first approach of fintech firms may not immediately resonate with American customers, these companies are still likely to find success in the US. This is because, unlike traditional banks, fintech firms have made the customer experience a cornerstone of their strategy.
By taking this customer-centric approach to the US, fintech firms could redefine what banking looks like in the country.
Nick Merritt, Executive Director, Designit
