Scaling up fintechs with the power of agile CX
Reading Time 8 mins
In our latest fintech insights article, Dafydd Hobbs, Client Partner, discusses the concept of agile CX labs, looking at the role they can play in helping startups in particular to truly deliver exceptional customer experiences.
Make a list of 2,500+ fintech (financial technology) companies in the UK, and you’re sure to find that many of them have similar concepts and solutions on offer.
Many fintech startups are struggling to differentiate themselves in the market or achieve product-market fit for this very reason, making it difficult to scale up their businesses.
The UK fintech sector has successfully attracted a significant level of investment, despite the disruption in the market caused by Brexit and Covid. Plus, according to Gartner, fintech startups are innovating at a rate of 300% compared to traditional banking, but despite this growth and progress, only 15-20% survive after five years because they fail to scale quickly enough.
Other challenges include evolving products to match customer needs, growing business revenue through the cross-selling and upselling of new products, and competing with incumbent FS companies that already have an established brand in the market.
In a previous article, we explored how risk and compliance enabled growth for fintechs, but the key to market differentiation is high-quality Customer Experience (CX), which has become an essential component for success in the fintech space—without offering high-quality CX, it’s nearly impossible to compete against the more established traditional financial service providers.
This article will go deeper into the fintech-CX challenge, exploring how an agile approach to CX improvement can help fintech brands scale.
The current state of CX in fintech
As product-led businesses, fintechs often focus heavily on the underlying technology and how it might disrupt existing providers and business models. However, they quickly stumble in customer experience, struggling to answer questions, respond to queries, address problems, and resolve complaints when customers require assistance.
For example, it can be incredibly stressful for customers if they can’t get help fulfilling an urgent need, like managing or accessing their money. Fintechs that fail to get this right early risk losing customer trust, damaging brand reputation, and tarnishing confidence in their product. Plus, with tools such as Trustpilot being critical within the fintech space, negative CX can quickly become a public issue.
When the product first launches, it’s usually effective to have a few people “mucking in” to answer customer queries and run customer experience operations, but a trickle of demand can quickly become a deluge if customer numbers increase. In many of these cases, fintechs respond by throwing more people at the problem, which is costly and doesn’t necessarily address the underlying challenge that demand for good CX is escalating.
Fintechs need to focus on delivering exceptional CX from day one, whilst continuously evolving it alongside changes to their business model, go-to-market strategy, product development, and competition in the market. One of the most effective ways to achieve this is by embedding an agile CX lab into the business.
Let’s focus on how agile CX labs can help fintechs improve the quality of their CX and tackle the challenge of business scaling.
What is an agile CX lab?
An agile CX lab is an organisational unit dedicated to improving customer experience. It is agile in that it is self-organising, cross-functional, and accountable for customer experience, not just a single department or function.
Agile CX labs enable fintechs to harness user insights and rapidly prototype, test, and scale products based on customer feedback. They can also help fintechs improve their focus and market share by testing and learning new customer segments or geographies.
By establishing a small team dedicated to analysing contact demand and customer experience, fintechs can have the ability to proactively identify CX problems. The lab acts as both an early warning system and a rich source of insight into the customer, allowing companies to enhance their CX and test new solutions for improving it further.
Most importantly, perhaps, they’re a gateway to learning how to empathise with customers, understand their pain points, and uncover new opportunities, whilst aligning new CX activities with the company’s go-to-market strategy.
“Fintech startups will need to get ahead with the right market insights and competitive experiences.”Dafydd Hobbs, Senior Account Director, fintech
How can an agile CX lab help fintechs to scale?
Throughout the UK fintech sector, companies are struggling to balance CX delivery and CX improvement. Startups, in particular, need to define the actual customer journey by truly understanding their pain points and their emotions.
This level of understanding requires a holistic form of customer listening, which should include analysis of customer conversations with the company; surveys and customer research to gather feedback; social media monitoring, including comments, reviews, and forum replies; and analysis of customer behaviours and the influences behind them, particularly in transactional data and product usage.
There is also a real need to rapidly test and learn from a strategic and tactical perspective. Companies need to hone in on new markets and go-to-market channels whilst exploring new contact channels, languages, and other critical customer-facing aspects.
Fintech startups will need to get ahead with the right market insights and competitive experiences. The most ambitious will be predicting what their customers want versus simply responding to their frustrations. However, these approaches require cross-functional orchestration between product, technology, service, and risk & compliance departments.
Fintech companies can address all of the above challenges with the deployment of agile CX labs.
Challenges in running an agile CX lab
Most fintechs follow an agile approach to their technical product development, so they’re already familiar with scrums and sprints. We believe that this experience is transferable to CX, as companies can deliver shippable solutions to CX challenges at the end of each sprint.
Still, the success of the lab depends on a variety of factors. For example, a lab’s goals must align with the business’s goals, and people need to be passionate about their roles. In addition, the team needs to receive feedback from various stakeholders within the organisation, and lab members should have the freedom to work autonomously.
Fintechs should evaluate agile CX labs based on their impact on customer experience. We’re not talking about measuring the number of sprints or user stories that the CX lab team completed - fintech companies should evaluate how they contribute to CX improvement by looking at KPIs such as the number of issues resolved after lab sessions.
There is a risk that agile CX labs might get stuck in the rapid prototyping stage, in which they focus too much on sprints and completing user stories. Instead, labs must move upstream to the learning stage, where they coach product owners to ensure customer insights are applied to prioritise projects based on customer value. It’s vital that fintechs test and learn with new markets, channels, and customer segments in agile CX lab sessions.
Agile processes can sometimes lead to a silo mentality where lab members are unaware of their impact on the business, so embedding it with other teams is essential. The lab’s scope needs to include the scaling and adoption of solutions developed within it, not just prototyping. It’s necessary to integrate these solutions with business-as-usual operations and product teams. Otherwise, there’s a risk of focusing too much on user stories, leading labs to burn out and lose momentum.
How can fintechs embed an agile CX lab into their business?
A startup company could fuse an agile CX lab with its servicing team to provide a hybrid design, improve and deliver. Each would bring a complementary skill-set, with some people comfortable with servicing customers and others focusing on transformation and Continuous Improvement (CI).
Whilst this approach can be more expensive than a dedicated CX team in the short term, it’s also more cost-effective than keeping the two teams separate in the long term. Without this fusion, startups will struggle to improve customer satisfaction and retention, improvements which ultimately help to differentiate themselves, and to close investment, in such a competitive market.
On the other hand, a scale-up (potentially after series A funding) could invest in a small separate team that runs parallel to the CX operation with support from a multi-disciplinary team on a part-time, agile basis. The key is to bring in people with transformation, CI, and agile experience, and empower them to lead input from the customer support, technology, and risk & compliance teams.
Once embedding the CX lab with existing departments, fintechs can more effectively respond to customer service requirements whilst simultaneously improving CX, solving two of the most significant issues with scaling in the fintech space.