Five missed opportunities in Fintech
The real issue that the Fintech & FS customer base have.
Who’s who and who’s trustworthy?
Financial services customers have real trust issues.
No one knows who’s who. Or who does what. Or what they should do. Or who they should do it with.
And although they don’t want to turn back to the traditional banks, who they don’t trust, they’re not sure which of the new players to trust going forward.
But here’s the killer insight, the barrier to entry, the big opportunity;
Most importantly of all, they don’t trust themselves!
Behavioural change towards a more responsible consumer.
Behavioural economics has shown us that people suck at managing finance.
We’ve known about the pension and savings shortfall and how woefully unprepared huge swathes of the population are for retirement since the 90’s.
The value we really need to add is not better functionality, its improving financial behaviour in customers.
But without educating and guiding the people on how to improve their own behaviour, how can we expect adoption and advocacy of our superior functioning technology?
Irresponsible people don’t become responsible through shorter user journeys.
So, my advice is this; address the problems of irresponsibility and poor financial behaviour, and help customers to not suck at managing finance.
Five predictions/suggestions for the future of Fintech
1. Hire psychologists as well as technologists.
The next Fintech unicorns will focus on behavioural change and personal responsibility, not transactional technology.
2. Apply Jobs (JTBD) theory.
Fintech firms that focus on delivering against the functional, emotional and social needs of customers will triumph. There are too many start-ups founded on what could be, rather than what should be.
3. Figure out your B=MAT.
Fintech firms that focus on ability (functionality) will lose against those who understand that to change behaviour you have to understand or develop motivation and, in providing the ability, supply a trigger for activation/adoption.
4. Build ensemble probability.
Technologies with multiple applications (in the FS vertical and others) will triumph. In a connected world, consumers don’t see verticals, they just see a fluid lifestyle. Integrate your tech horizontally (this is where data driven innovation really comes in).
5. People will pay for financial therapy ahead of functionality.
We all want to be better versions of ourselves. Health, relationships, nutrition. Finance is next. Therapy, retreats, coaching, courses, etc. Plug in functionality will still be saleable up the chain, but it won’t be as valuable as before.
To summarise;
Create better financial customers not better financial products.
It’ll be a bigger market for everyone.
(I have a deck that expands on these suggestions and a toolkit for their application. I also have a presentation around consumer behaviour in FS and the associated cognitive biases that lead to poor decision making and financial irresponsibility. Please email me if that is of interest.)
