Two sides of the CX coin: Why FinTech needs to realign

Modulr By Modulr on 21 February 2021   •   6 mins read
<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >Two sides of the CX coin: Why FinTech needs to realign</span>
Customer experience reigns supreme in today’s financial landscape. The best businesses are those that embrace technical innovation to iron out process inefficiencies and free-up time for Finance and Tech leaders to double down on delivering unbeatable customer experiences.
Market leaders separate themselves from the rest of the pack by uniting the best finance minds with industry-leading technologists; putting customers at the heart of the conversation and embedding customer-orientated experiences into their core DNA.
While we often attribute the success of today’s FinTechs to their advanced functionality over their legacy counterparts, the convergence of FIN and TECH in the modern era represents two sides of the same customer experience coin.
Join us as we explore how the world of technology and finance (two historically siloed business functions) are joining forces to form a match made in customer experience heaven and creating a customer-led super function.


The Customer Experience Conundrum

A landmark report reveals that the average small company (<250 employees) spends a whopping £980,000 on end-to-end payment processes every year, while larger companies (250-1000 employees) fork out over £2 million every year to maintain smooth payment operations across their growing fleet of services.
Besides the direct financial cost of inefficient payments, the same research found that the time spent (or rather, wasted) on overcoming payment inefficiencies was time that would have been better spent improving the customer experience. These hidden costs of payment inefficiencies can stretch across an entire organisation and leave end-customers feeling underserved and undervalued.
With 42% of businesses prioritising customer experiences in their long-term strategies, the prevalence of sub-par payment processes and hidden costs across payment infrastructures represents a major contradiction and a significant roadblock on the path to success.
Companies that can identify payment inefficiencies and streamline processes will free-up vital time and resources to invest in the customer experiences of the future.

The Convergence of FIN & TECH

Successful business leaders are working around payment inefficiencies and prioritising customer experiences by harnessing smooth payment flows. Payment innovation is driving a cultural revolution throughout the business world by connecting previously siloed functions through integrated systems that provide end-to-end functionality.
Whether it’s an IT team using back-end APIs to embed payments into their technology stack or a finance manager benefiting from enriched payment services to improve cash flow management, efficient payment processing involves connecting the dots across an organisation to deliver a seamless operation. Systems integration revolves around a collaborative stakeholder ecosystem where all C-level roles become increasingly focused on delivering enhanced customer experiences and embracing technology-enabled solutions.
The confluence of technology leaders and finance professionals provides the blueprint for a highly-scalable and future-proof organisation that can attract and retain customers. Instead of viewing technology as a means to supplement a business with additional offerings and finance as a siloed exercise to manage the flow of money through an organisation, the best FinTechs will acknowledge both sides of the coin — viewing technological innovation and payment processing as inextricably linked disciplines that centre around the customer.

Two Sides of the CX Coin

Whether it’s a finance company infused with state-of-the-art software, or a Software as a Service (SaaS) business fused with a bespoke payment infrastructure, the harmonisation of C-level leaders is critical to shaping a customer-centric business.

Finance Infused with Software

The most common form of fintech innovation involves a financial institution embracing cutting-edge software to transform outdated processes, address payment inefficiencies, and deliver additional functionality for end-users. In each case, customer experience takes centre stage as financial institutions turn to software to break down barriers and deliver intuitive tools that make it easier than ever for customers to manage their money.
A prime example of how financial institutions can infuse their existing business with new technologies is the rise of challenger neobanks. The opportunity to address long-standing customer pain points and offer a growing number of innovative financial services via a slick digital interface is revolutionising personal finance management and forcing established banking giants to rethink their customer retention strategies.

More recently, the emergence of Open Banking following the EU Commission’s latest Payment Service Directive (PSD2) also represents an exciting new era for finance and technology leaders. Most industry experts believe the introduction of Payment Initiation Services to streamline the flow of money between banks, third-parties and end-users will fndamentally change the customer's relationship with payments.

Software Fused with Finance

The other side of the customer experience coin in fintech innovation involves fusing software businesses with payment technologies to help companies expand into new verticals. Offering financial services as a bolt-on service to a core business function helps to hook existing customers into a software ecosystem and provides potential customers with a reason to choose one software provider over another. Embracing payment innovations can enable vertical scaling and help software providers deliver bespoke-to-sector financial services that revolve around enriched customer experiences.
For example, if a software business specialised in supply chain management for the construction industry, embracing FIN and TECH to develop an in-house payment infrastructure would enable that business to expand its offerings by providing additional functionality where customers can pay for supplies directly. The company could then go a step further by creating industry-specific accounting software where customers can manage their entire supply chain and financial accounts under one roof — locking customers into a suite of ‘sticky’ products or services.

How to Improve Customer Experience With Tech & Finance Co-Innovation

Two departments that traditionally sat at the core of a business and seldom looked outwards are now dreaming up exciting strategies and building pioneering products that add value across every dimension of customers’ lives. By embracing technological innovation, businesses are optimising customer experiences and maximising operational efficiency to reimagine the way brands interact with the outside world.
The integration of finance and technology is made possible by the emergence of digitally-native payment platforms that provide the technical foundations from which organisations can embrace customer-orientated payment solutions. Payment pioneers are harnessing cloud-based technologies and delivering complex processes, through streamlined APIs, to deliver an unrivalled customer experience with efficient, hassle-free and lean business processes.
In many cases, boosting customer experiences is simply an exercise of thinking about common challenges a little differently and embracing fresh perspectives. Digitally-native payment platforms, like Modulr's, provide a refreshingly simple and customer-focused approach to help forward-thinking organisations stand out from the crowd.
Fintech enablers are reinventing the wheel to design intuitive payments platforms and equip Finance and Tech leaders with the tools they need to shape the future of money.
Want to learn more about how your business can drive efficiency and harness futuristic payment technologies to optimise customer experiences? Download Modulr’s Landmark Research eBook.