Like it or not, fintech is a numbers game that’s getting harder and harder to play.
The average customer acquisition cost (CAC) for the banking sector alone is above $300 a figure that’s rising due to the negative effects of COVID and the saturation of digital channels.
And while CAC is high across the board, it’s something fintechs can absorb if they’re smart about it.
The solution lies in a combination of customer insights and automation. As Liz High, EVP Strategy and Marketing, Nymbus, explains, “So the idea of really good fintech is, the more you learn about customer behaviors, the more processes you can successfully automate. So in theory, as you grow, you should be reducing the manual effort and the number of people that are required to squire and manage customers and increasing the power of your technology to deal with the broader set of behaviors you see.”
So how do you automate these tasks—especially in a highly regulated sector that mandates paperwork, signatures, and acknowledgments, not to mention customer trust and Netflix-level customer experiences?
Here are 4 tools you can deploy right now that will help identify and automate processes—lowering your operating costs.
Deploy a verification engine
While verifications like Know Your Customer (KYC) keep the world safe from money laundering and fraud, they don’t do much to preserve your slick customer experience.
Quite the opposite, in fact. Verification is a roundabout of forms and photos for customers, which slows down the onboarding process and kills your chances of converting them.
It’s not just costly on the customer side either. Traditionally the KYC process has relied on manual steps to verify customers’ identities.
And the punishments for failing to comply are harsh, too—KYC and anti-money laundering fines totaled $10.4 billion in 2020.
But with the help of automated verification tools, fintechs can now perform KYC and anti-money laundering checks faster. Tools like Regula automate information collection and then match that information against databases and systems for verification.
This solution not only speeds up your onboarding and gets more customers using your products, but it also reduces the amount of manual compliance your teams have to work through.
There are even cutting-edge solutions like smartKYC that are taking customer due diligence to the next level by using AI to match identities against the internet, news archives, watch lists, and corporate databases.
And when it’s estimated AI-powered identity verification could reduce KYC and anti-money laundering costs by up to 70%, and improve speed by 80%, it’s sure to lower your operating costs.
Fuel automation with data insights
At the heart of any cost-saving fintech automation is a deep understanding of customer behaviors. This is the feedback loop that drives automation in fintech.
From estimating a customer’s financial situation to understanding where customers are churning along your onboarding experience, you need ways to capture customer insights.
Luckily, there are plenty of tools out there to help fintechs analyze customers.
Take Pendo, a customer journey tracker, for example. It gives you the ability to track feature engagement, customer inquiries, team onboarding, and other metrics to help you understand how customers are using your product. It even uses dashboards that analyze feature usage stats and show where there may be user roadblocks or repeat issues.
With real customer insights in hand, you can identify areas ripe for automation and reduce your operating costs.
Streamline the onboarding process with eSignatures
You can pump all the money you have into marketing, but if your onboarding process is slow and confusing, you’re never going to convert the customers you attract.
Put simply, nothing kills customer acquisition like a slow and confusing onboarding process.
And one of the biggest causes of a bad onboarding experience is the financial paperwork customers have to sign and send back.
However, with eSignature APIs, like Dropbox Sign, you can embed document signing directly into your website or app. That way, customers can input information and sign documents right in your onboarding workflow.
From what we’ve seen, using eSignatures gets documents signed and returned up to 80% faster and boasts a 3X higher completion rate compared to pen and paper.
For fintechs looking to convert more customers without spending more on marketing, embedded eSignatures are a fast and easy solution.
Leverage chatbots for low-cost customer support
An estimated 48% of tasks performed by loan officers, financial advisers, bank supervisors, loan clerks, and tellers could be automated or augmented by 2025.
The reason? Financial services are no longer a nine-to-five activity. Everything is available 24/7 and from any part of the world.
Loyalty and customer satisfaction go hand in hand—96% of customers say customer service is important in their choice of loyalty to a business.
But employing an entire team of support staff to respond to customer questions 24/7 isn’t a cost-effective way to operate. That’s where chatbots can help.
While conversational chatbots are nothing new, they are having a big impact. In fact, the projected time savings for consumers and employees from chatbots is expected to be 2.5 billion hours by 2023.
It’s because they can answer questions and initiate tasks much faster than human employees. And unlike human support staff, chatbots can handle more than one customer at a time, ensuring every customer gets the immediate response they’ve come to expect.
Even if a chatbot can’t replace your entire support team, it can offer quick help for frequent questions and redirect the user to a human in case the answer is not found—IBM estimates a well-designed chatbot can successfully answer up to 80% of routine questions.
These tools are just the beginning…
It’s true, fintech is reshaping the way people think about money, but behind the scenes, automation is what makes it possible, by helping companies provide a better service to customers at a lower cost.
These are just 4 of the many tools out there that fintechs are using to lower their operating and customer acquisition costs. And new and smarter tools that help fintechs to operate in even more automated and cost-effective ways are developed seemingly daily.
While new technologies like AI solving many of fintech’s challenges, signing remains a staple of every financial transaction—one many fintechs still grapple with.
To learn more about how eSignatures are helping fintech teams deliver a better customer experience while reducing errors and manual work for employees, check out The definitive guide to eSignatures in fintech.