Fintech lenders need to deliver “a better customer experience than established brands”, as customer expectations “have never been higher”, according to speakers during an Open Banking Expo live panel debate, in association with Experian.
Simon Forster, a senior consultant at Experian, opened the panel debate, which took place on 14 December, by remarking on the increase in financial services products “being taken through digital channels”.
He said that the concept of “digital first” gives customers certainty of outcome, convenience and personalisation, as well as ease of consumption.
“Customers expect lenders to know their circumstances and preferences, with any offer being given aligned to these,” Forster said.
“Customer expectation has never been higher. We appreciate with the cost-of-living crisis, the range of products and services that are available may change, lenders’ risk appetite may be tightened but that certainly doesn’t dampen the expectation of the consumer.
“The lenders who will probably be the most successful are the ones who can deliver these outcomes with a friction-free journey that doesn’t introduce unnecessary risk.”
He was joined on the panel, titled ‘The future of digital lending and enablers of growth’, by Katrin Herrling, CEO of Funding Xchange and Jason Maude, chief technology advocate at Starling Bank.
Allica Bank’s chief risk officer Aileen Gillan, who completed the speaker lineup, said: “Ultimately, for the fintechs to succeed, we need to offer a better customer experience than the established brands. If I think about the SME sector in which Allica specialises, we know that that customer base is very poorly served by the incumbent banks.
“But we also know that customer inertia is very high, [and] that customers are slow to move their full banking arrangements. So, the challenge for new firms, like us, is to offer something substantially better and a really great customer experience.”
Asked whether lenders are prioritising affordability, fraud prevention or eligibility in the current environment, Maude said: “It’s difficult to put one above the other and say one is more important.”
“Ultimately, what you want to do is be able to provide customers with a loan and have them pay back the loan,” he added, noting that lenders “really have to go for all of these things at once, prioritising one over the other doesn’t really work”.
Funding Xchange’s Herrling agreed: “What we’re seeing at Funding Xchange – where we’re very closely involved with the FCA’s delivery of Consumer Duty – is that all of these things need to come together, and funders need to be able to demonstrate good outcomes that they’re achieving when they’re providing funding.”
To watch the panel debate on demand, visit the ‘On Demand’ section of OpenBankingExpo.com.