FinTech Flashback: Customer Experience in Times of Crisis
FINTECH FLASHBACK is a series on FinTechtris that takes a look back at topics first discussed over a year ago and provides updates, dialogue, and further developments of what’s going today in the industry.
Over a year ago, we discussed Customer Experience (CX) as being the most impactful factor for financial services companies. With CX, all interactions between an organization and client (throughout an entire customer lifecycle) are considered. Customer experience in FinTech (not to be confused with customer support) includes traditional elements (of price, product, scale), convenience with interactions across multiple channels (i.e. mobile, branch, call center), responsiveness to customer issues, and proactive engagement between a company and its clients.
The latest cards or newest accounts get the biggest industry headlines, but at the core of every banking relationship is still customer experience. Poor CX leads to consumers withdrawing deposits, closing accounts, and switching banks. Best-in-class CX increases customer loyalty, deepens existing relationships, spreads positive word-of-mouth.
Unfortunately, the mistakes from banks and fintechs get magnified when it comes to data security, customer access, and overall errors:
Dave’s security breach exposes 7M users’ data - Last month, a hacker took advantage of a 3rd party partnership that fintech unicorn, Dave, had with Waydev (analytics platform for engineers). The info (names, phone numbers, emails, and hashed SSNs) of over 7M users was exposed for free on a public forum. Dave took action quickly to have passwords reset, notify users of what was compromised, and work with authorities to report the attack.
Santander’s online banking outage - last Friday (8/28), customers were unable to access online or mobile banking for Santander, from the morning until the afternoon. Cards and ATM access still functioned properly, but clients couldn’t pay bills online or verify if they had received their paycheck via direct deposit.
Chime’s outages - In 2019, the top neobank in the US, Chime, suffered multiple outages that left customers stranded at restaurants and stores unable to use their card or access their account. Between July and October of last year, Chime had 3 outages in total due to its payment processor, Galileo Technologies, who had experienced an operational issue impacting some of its clients. Despite Galileo partnering with other neobanks, there were recurring issues mostly with Chime.
Citi makes a $900M transfer error - Large financial institutions with over 50 years of history, usually have legacy infrastructure in their operating systems. Many of the top banks have undergone digital transformation internally to replace these structures, but the transition has not been fully completed. Citi had switched software systems from the 90s to industry standard versions last year in a phased rollout that is still unfinished. As a result, there was an incorrect transaction processed and a large transfer made to a client by mistake.
In today’s financial services ecosystem, banking is completely virtual and the connection between a client and their bank is limited to email, chat, or phone support. Staying ahead of a potential crisis in customer experience is a critical theme for both young fintechs and large banks. As much as product features and bonuses grab the most headlines, the basics of access, security, and response represent the foundational structure for all banking relationships. For the companies that not only get this right, but leverage customer experience as a value-add differentiator — the acquisition and company growth can be exponential from year-to-year.
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