Fintech Companies Need to Do Better in Order to Win Consumers Trust

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With roots in business tech, the ever-expanding fintech market has grown to encompass a wider variety of consumer financial services and has more room to grow–if fintech companies can figure out how to win back the trust of potential customers before moving forward. The technology that enables and inspires many fintech startups is more accessible than ever and the convenience that financial management tech offers is much needed. Attitudes toward fintech companies themselves, however, are less than positive and currently in decline.

Overcoming Hurdles

Progress now isn’t a matter of developing the next best app or devising another popular payment platform. It’s up to fintech companies to instead assuage the fears–founded and unfounded–of both consumers and big-name investors.

Data Concerns

Data analysis has become an essential part of managing any technological consumer-driven business, in everything from online and live casino to, of course, fintech. But there are growing concerns among users about data privacy and what happens when they permit access to their data. Consumers were much more eager to share their data with companies willingly just a couple of years ago, but now they are worried about what they share and who they share it with. Even if they are benefitting from sharing their data, through targeted ads or personalized banking, for example, people are cautious about their private information.

Keeping Up With the Times

With pandemic concerns, people were much more willing to give up personal data as part of efforts to contain the virus. Participating in containment efforts and associated technology like “track and trace” apps was framed as a necessary choice to help stem the spread of COVID. Events like this could work as a catalyst to help turn the tide for fintech companies in the future if comfort levels around data sharing shift or if fintech can accurately grasp what makes people quick to share in crisis: that the data is actively being used to do good.  

Making a Name

Worries about privacy and misunderstandings about what data is used for are not the only things driving people away from fintech. It’s an increasingly bad user experience. Different financial services have been continuously making headlines for alienating their consumers and as more options join the market there’s little sense of customer loyalty.

Rebuilding a Reputation

Some fintechs have gained notoriety for taking advantage of financially marginalized users, allowing certain sectors like adult-content creators and sex workers to use their services while they are still building a foundation and then banning those users when they have a large enough user base to survive. Other fintechs receive extraordinary scrutiny for unique circumstances, like the Robinhood investing app which made news when one of its users, Alexander Kearns, died by suicide after seeing a negative balance of $730,000 on the app.

In June, Wirecard Card Solutions was suspended by UK regulators, causing a domino effect that resulted in hundreds of thousands of frozen customer accounts. One of the biggest names and largest operators in fintech presently, this is a disaster for the reputation of fintech companies that will take lots of time and effort to get out from underneath.

Pros and Cons

The sheer accessibility fintech has come to offer, particularly in a world that will most likely continue to be affected by coronavirus, does give current operators some advantage. For some people, fintech companies have transformed from a convenience to a necessity. But the real test on the longevity of the industry will be its ability to come together and hold itself accountable, finding ways to regulate within itself. Without establishing standards to build trust with consumers and larger financial bodies, the existing market may just cannibalize available options for the way it wants to operate.