The path forward for human touch in a high-tech world

Emerging trends will shape how inclusive fintech startups integrate personal interaction in digital financial services

Fintech companies like Apollo in Kenya use a mix of tech and touch to serve their customers.

By 2025, GSMA estimates that there will be 1.2 billion 5G connections, 5 billion mobile internet users, and almost 6 billion unique mobile subscribers. Within the next five to seven years, newer technologies — such as artificial intelligence, machine learning, and chatbots — will transform how fintech companies reach previously unserved and underserved communities. Over the next decade, as these technologies continue to advance and both digital and financial literacy improve, low-income customers will be more willing to trust digital channels and use technology to engage with financial products and services.

Fintech companies focused on low-income customers will need to continue to understand their target communities’ preferences and ensure that they are meeting their clients’ needs. Institutions that find ways to balance tech and touch, as Accion Venture Lab discussed in our report, The Tech Touch Balance, are the ones that will continue to succeed in this quickly-changing world.

As digital financial infrastructure, product awareness, and customer trust continue to evolve, fintech startups should adopt new methods of engaging their customers. While there is no one-size-fits-all model, we believe that the future of tech and touch will predominantly follow these emerging trends:

  • A mixture of tech enabling and imitating touch will drive customer acquisition: All but one of the sample companies in our report use tech that allows touch for customer acquisition. Given that many of our companies face challenges that inhibit initial adoption — including a lack of brand or product awareness, distrust, and low digital savviness on the part of customers — fintech startups will need to continue to use some aspects of touch to acquire customers, particularly outside of developed markets. However, as customers become more comfortable with technology, companies will shift to incorporate more tech-enabled touch in customer acquisition.
  • Tech will replace touch in back-office functions: Customers will continue to value the speed that automated backend functions provide. Given the time and cost savings of automating back-office functions, we believe that fintech startups should use tech to execute such processes whenever possible, including:
    • Collections: All of the lenders profiled in The Tech Touch Balance escalated their collections process to human interaction in the case of late repayment. Given that collections are critical to a lender’s success, companies will continue to balance tech and touch based on customer repayment status. However, the non-lending companies featured in this paper’s case studies, specifically those receiving ongoing insurance payments or savings deposits, all used tech to manage collections. While this may be easier in some markets, specifically where mobile money exists or where customers have bank accounts and can use debit orders, companies will move to replace touch for payments as soon as possible.
    • Claims management: The two insurance portfolio companies profiled in this report use a mixture of tech and touch to improve claims management. Given the involvement of multiple stakeholders in claims management and the time lag between claim submission and payout, insurance providers will blend a variety of engagement methods to manage customer expectations throughout the claims process. However, as insurers continue automating their operations and as customers become more comfortable with digital engagement channels, claims management will also become more automated and tech-driven.
  • Technology will coexist with touch in customer engagement: The startups featured in this report use a broad spread of engagement methods: half relied on tech to both imitate and replace touch, and one quarter relied on tech to enable touch. This will change going forward: the industry will shift to emphasize more innovations, with more processes that use technology to imitate and even replace touch altogether. Much like the changes affecting customer acquisition, customers’ increasing familiarity with technology will allow financial service providers to increasingly rely on technology for engagement.

Regardless of how an organization decides to balance tech and touch, every financial service provider must find some way to fulfill customer expectations. Finding that balance is particularly vital for inclusive fintechs, which will rely on technology to scale and will depend on human interactions to win over underserved clients. Companies should recognize that when designing a valuable customer experience, balancing tech and touch is never a “one and done” process. Customer preferences are dynamic. Successful companies will continue to listen to their customers and adapt to their evolving preferences.

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