How to Build Real Trust with Your Audience as a Fintech Startup
From online banking apps to digital payment systems, fintech has revolutionized the way people handle their finances. However, with the rise of new and innovative fintech startups, the importance of building trust with customers has never been greater. In this article, we'll explore how you can establish and maintain trust with your audience, and ultimately gain a competitive edge in the fintech market.
Understanding the Importance of Trust in Fintech
Trust is the foundation of any successful financial service, and fintech is no exception. In most fintech businesses, important data is required from the customer. Things like bank accounts and financial information are not shared lightly, so a level of trust is absolutely necessary. While some clients may research things like security standards, partnerships, and overall reliability of a business- many will simply make the call on the spot.
There are many psychological factors that influence trust, and you can use these to your advantage in order to build superior trust in your business. Perhaps the most important of all is authenticity, so it's crucial to approach every trust-building exercise with this foundation.
The Role of Trust in Financial Services
Trust allows financial services to operate smoothly, and builds strong customer relationships that facilitate long-term business growth. When customers trust a financial service, they are more likely to share sensitive information, make financial transactions, and use additional services offered. This is because trust creates a sense of security and reliability. It is important to note that trust is not just about the security of the technology used, but also about the transparency and honesty of the company's operations.
For example, a fintech company that is transparent about how it uses customer data and has clear privacy policies in place can build trust with its audience. This is particularly important in a world where data breaches and cyber attacks are becoming increasingly common. By prioritizing trust, fintech companies can set themselves apart from their competitors and establish themselves as reliable and trustworthy partners for their customers.
Trust as a Competitive Advantage
In a crowded fintech market, trust can be a powerful differentiator. Consumers tend to choose services that align with their values and priorities, and trust is often top of that list. Building reputation and trust can ultimately generate leads for businesses. In fact, a survey conducted by the Government of Canada found that 32% of respondents wouldn’t use fintech for fear of their personal information being unsafe, 28% for fear of their money being unsafe, and 31% because they don’t understand it well enough.
Security is paramount, and building trust is a key method of addressing these consumer fears.
Let’s go over a number of strategies that will allow you to foster this trust, and ultimately serve your customers better.
#1: Leverage Existing Trust By Partnering With Established Institutions
One way that fintech companies can build trust is through partnerships with established financial institutions. By partnering with a bank or other financial institution, a fintech company can leverage the trust that the established institution has already built with its customers. This can help to ease any concerns that potential customers may have about using a new and unfamiliar service.
The example below comes from KOHO, a free spending and savings account for Canadians that allows users to build credit, earn cash back, and more. By answering this question in their FAQ section, they clarify their institutional partners, giving the reader a sense of trust and security.
#2: Be Transparent
By being transparent, fintech companies can demonstrate their commitment to their customers' security and privacy, which can help to build trust and establish long-term relationships. This can include publishing regular security audits, being open about how customer data is used, and having clear and concise privacy policies in place. Transparency is key to gaining customers' trust, and open communication makes customers feel valued and listened to.
In a survey conducted by Plaid, 76% of Americans said that they have more trust in financial companies when they convey their privacy practices.
Just like this example from Mogo, your Privacy, Security, and relevant Legal policies should always be accessible, easy to find, and personalized to your business’ actual practices.
Clearly Communicating Your Business Model and Fees
Security and privacy measures aren’t the only thing you need to communicate well. It’s crucial to ensure fees for services or products provided are clearly communicated to customers upfront, along with any other relevant company information. The more customers know about your business, the more comfortable they will feel. Sneaky fees and shady practices are not the building blocks for long-lasting relationships.
Much of Wise’s brand identity is built on this idea– no hidden fees, clear communication of the transfer. It makes the mental barrier to entry much lower for anyone considering trying out the service.
Providing Regular Updates and Engaging with Customers
Customers value transparency when it comes to updates, especially in situations where their finances are involved. Updating customers on new services, features, and other pertinent information can ensure that they feel involved– and reassure potential customers that they will always be in the loop.
We love Wealthsimple’s consistent and clear updates on the platform’s new features, and they cover all their bases with email updates, too.
#3: Showcasing Your Team's Experience and Qualifications
One of the most essential ways to establish credibility and trust is to showcase the experience and skill set of your team members. Showcase the experience, education and background of your team members. Not only does this establish credibility, it also adds an element of personality to your brand! We recommend showcasing your team on your website, but also leveraging LinkedIn as a professional platform to share them and their accomplishments.
#4: Providing Thought Leadership through Content
Providing valuable information or insights via a company blog or other content channels can position your company as a thought leader in the industry. This kind of content provides value to customers, while establishing the company as an expert.
#5: Ensuring Security and Compliance
Of course, one of the most important factors for building trust is to implement security measures that protect your customers.These are crucial features that cannot be ignored as it is more often than not one of the most important selling points for clients.
Implementing Robust Security Measures
Implementing robust security measures is not only necessary but implies that you take customers' concerns seriously. Measures to maximize security may include secure payment gateways, encryption, multi-factor authentication, and customer data protection and privacy. Don’t hesitate to work with an expert at this stage, and take the time to ensure you’re following best practices in the industry.
Staying Up-to-Date with Regulatory Requirements
As the fintech sector continues to grow and disrupt traditional financial services, governments are introducing regulatory requirements. It is important to stay up-to-date with changes in regulation to ensure compliance, which increases trustworthiness, credibility and legal standing.
Conclusion
Building real trust is vital for the success and growth of any fintech startup. Gaining customer trust requires a commitment to being transparent and communicative. At the same time, businesses need to showcase their expertise, ensure security and compliance and provide personalized, valuable communication to their intended audience. By following these guidelines, fintech startups can set themselves apart with a strong, trustworthy, and engaged customer base.
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