• Fintech 2021: the year of customer journey

    Fintech 2021: the year of customer journey

    Fintech 2021: the year of customer journey

    Image from Unsplash

    Surviving 2020 was no small feat, as it proved to be a disruptive year—with many industries coming to a screeching halt. The Fintech industry, however, has been seeing multiple major growths due to the unexpected diversion from the pandemic situation. According to a report by World Bank, as of November 2020, Malaysia’s economy has been showing signs of recovery with a projection of 6.7% growth in 2021 from a 5.8% contraction in 2020.

    A shift in the atmosphere

    This begged the question of how and what has changed in the industry? A change in customer’s behaviour is a promising indicator of the future of digital banking in Malaysia, aligned with the Economy Outlook 2021 report published by the Ministry of Finance in November 2020. In 2020, this change was contributed by the increment of transactions performed online and the rise of internet banking users in Malaysia; a 9% increase from 30.6 million users in January 2020 to 33.2 million users in July 2020.

    The statistic is due to a rise of user adoption’s rate in the 45 and older age group, as they are more susceptible to the infection risks brought on by COVID-19. This group was previously often excluded from the digital banking target market. But as of recently, they have been more receptive to the transformation due to the pandemic situation in managing their daily chores: from grocery shopping, payment for household bills to even food delivery.

    Unsurprisingly, this alters the overall customer behaviour trend with the emergence of a digitally savvier generation: financially constrained, but more partial to the security issues of online transaction processes. Banks now have to place a greater emphasis to improve their existing digital banking landscape that directly addresses this specific concern. 

    In with the new, out with the legacy

    Additionally, with the rise of automated and self-serve transactions, financial institutions are rapidly losing human touch—no longer a set operation sufficient or applicable for everyone. This has amplified customer dissatisfaction, resulting in continuing frustration from the end user’s side and a less-than-desired result for banks. 

    With many processes available online, the traditional banking sector is quickly realising that customers are now spoilt for choice. Loyalty is no longer a guarantee if the service or product offered no longer suits their financial needs.

    The challenge for banks isn’t becoming digital—it’s providing value that is perceived to be in line with the cost—or better yet, providing value that consumers are comfortable paying for – Ron Shevlin, author of Smarter Bank: Why Money Management Is More Important Than Money Movement To Banks And Credit Unions.

    So how can a financial push forward in 2021 while maintaining trajectory or plan for further growth? If we were to follow the pattern from 2020, banks will need to step up their banking software game. To keep abreast of the changing trend, banks should adopt software that enables them to understand customer’s behaviour, improve their relationship with end-users, and generate useful data for future product developments.

    Welcoming change in 2021

    An unexpected positive from 2020 saw a reduction in cash handling transaction costs by banks that often supersedes the revenue itself. Reduction in costs offers an opportunity for banks, as they may now re-channel funds into expanding their digital transformation horizon, to bridge the gap created by legacy systems into a smoother digital onboarding process. 

    For said digital transformation to materialise, a whole new wave of digital products and solutions must be in place as demonstrated by our homegrown banking software like Juris Mindcraft (a prescriptive AI analytics for banking data) or Juris Access (a digital onboarding banking platform); supported by a robust regulatory ecosystem, innovative technology and cultural adaptation to speed up economic growth and financial inclusion in Malaysia. 

    The year of reforming traditional banking business models is here now, and banks may start with catering to the unserved segments of society such as low—income individuals, early income millennials, start-ups, and small and medium enterprises. For a financial institution to remain relevant, humanised banking software and customer-centric products should be the new standard to serve current demand—the result of a tech savvier generation that is now inclusive of multiple different age groups with varying demographic needs.

    About JurisTech

    JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.

    By | 2021-03-23T17:47:57+00:00 18th January, 2021|Insights|

    About the Author:

    Nuralia Mazlan is a Marketing Specialist at JurisTech with interests in the technology industry. She specialises in business and research writing, besides digital marketing planning.