Achieving scale and sustainability is front and center for growth-hungry fintechs. Learn why CX outsourcing can help reduce costs, mitigate risks, and boost customer loyalty.
It’s clear to see that Europe’s fintech industry, once characterised by unbridled growth and seemingly limitless investment, is experiencing upheaval due to ongoing economic uncertainty. Rising inflation and a cost-of-living crisis has put the brakes on consumer spending, and company valuations have dropped sharply, forcing wave after wave of job layoffs and service cuts.
Second only to the U.S. in market size, the U.K. remains a hotbed of fintech innovation, with fintech being the U.K.’s biggest scaleup sector, contributing to 41% of the value of the sector as a whole. But with global fintech investment plunging by a massive 30% in 2022, and falling even further during 2023, Europe’s fintech industry is struggling to refocus on how to achieve growth ambitions.
It’s getting more difficult to recruit and retain workers with the right skills to help businesses continue to innovate, meaning companies face even more challenges in attracting and keeping customers. As funding becomes scarcer, the fight for profitability gets fiercer, and European fintechs are struggling to access the technology, expertise and staff that will help them to scale.
One of the most pressing questions facing fintechs on their scaling journey is whether to buy or build CX in-house. Research from Gartner shows that CX now drives over 66% of customer loyalty – more than brand and price combined. Without access to the flexible, cutting-edge technology that can effortlessly handle rapidly rising customer and transaction volumes, fintechs risk damaging the experience and customer perception of their brand and losing customers altogether.
And for fintechs aiming to attract lucrative millennial and Generation Z consumers, the stakes are higher. Nearly 70% of Gen Z consumers and 57% of millennials will switch brands after just one incident of poor customer service, PwC data shows..
With a lack of in-house resources and limited funding available, it may be tempting for businesses to try and enhance their CX processes by themselves. But they could be setting themselves up for more problems later on.
Customers want friendly, knowledgeable help, and instant support. Fintechs need to know who their customers are and what they want. However, without the integrated end-to-end technology that can generate personalised insights that can create deeper connections, blind spots will weaken customer loyalty.
Of course, many fintechs are turning to AI to solve their CX pain points. There’s no doubt that AI has the potential to transform the design and delivery of customer service, as well as streamlining internal processes. But over-reliance on AI without any human input could leave fintechs exposed to poor service or even potential legal jeopardy if AI gives customers incorrect advice or unsuitable products. Amid estimates that one in 10 agent interactions will be AI-automated by 2026, it’s becoming clear that fintechs will need to have effective guardrails in place to govern their AI usage.
The push for continued innovation will always need people to design the technology that fintechs depend on. But right now a global skills gap is making it harder for fintechs to find the right talent. In such a competitive marketplace, retaining people is just as important as recruiting them in the first place.
Fintechs that treat employees well are proven to enjoy lower staff turnover rates, and ensure consistent, uninterrupted experiences for customers. Business units with highly engaged employees have 10% higher customer loyalty and engagement, 18% higher sales, and 23% higher profitability than those with the least engaged employees, according to Gallup research.
What this all adds up to is a clear need for outsourcing. With the help of expert outsourcers, companies can deftly side-step the complexities they would face if trying to do it all by themselves. In fact, Deloitte data shows that just outsourcing customer service can generate operational cost reductions of between 30% and 60%.
That’s why we have published a first-of-its-kind whitepaper, aimed at helping European fintech scaleups to leverage outsourcing so they can adapt and thrive in fast-changing market conditions. Not only does the paper draw upon Ubiquity’s expertise in transforming CX operations around the world, but it contains valuable insights from leading payment and fintech industry leaders and commentators on how outsourcing can help growth-hungry European fintechs to reduce costs and mitigate risks.
Finding the people, processes, and pioneering technology to stay competitive at lower cost will enable fintechs to scale effortlessly, and deliver the hyper-personalised CX that will keep their customers coming back for more.
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