A rush of new customers is a good problem to have.
Yet this moment poses several major challenges for fintech companies in the middle of a scaleup. Parallel concerns emerge about maintaining customer relationships, handling (and securing) data at scale, and how even to shape the company’s growth trajectory.
In order to strategize for this moment of growth, fintech CEOs should ask themselves the following three questions.
1. When Is the Right Time to Scale Up?
Growth depends on numerous factors, many of which are outside of a company’s control. This fact was driven home during the COVID-19 pandemic, when new users flocked to digital banking tools because social distancing had restricted our ability to make in-person transactions.
Growth in the fintech sector is either driven or limited by technology. For many companies, the tech that got them to their last stage of growth is insufficient for the next stage, whether that’s because certain tools have become obsolete, new regulations have come into effect, or simply the new surge of users has overwhelmed existing infrastructure.
This becomes an assessment of capacity:
- Do you have the resources in-house to build new software or to update old software?
- Can you maintain 99.99 percent uptime while you develop those tools?
- Can you get your new or upgraded software online quickly?
If you cannot confidently say “Yes” to each of those questions, then it’s worth looking into how a software development partner can provide that needed capacity quickly.
2. How Should You Scale Data Security and Data Management?
A lesson many financial companies learned during the pandemic: When demand for services grows quickly, so too must data management. This means scaling fintech companies must also scale their ability to store, protect and analyze data.
That can be a daunting task, particularly for companies that already lack the resources to leverage all the data they collect, or don’t have the analytics capacity to conclusively know what data points are most relevant to company growth.
Here are a few tips for upgrading data-management capacity:
- There is a balance between data security and customer access. Consumers will gravitate toward tools that prioritize both security and convenience.
- Focus on creating future-proof systems. These will ensure continuity in your processes for collecting, storing and securing customer data, but they will leave the door open for future innovations in fields such as AI, which could help you identify new insights in your historical data.
3. How Do You Keep Current Customers Happy While Adding New Ones?
It’s easy to get lost in the minutiae of system upgrades and software development, so frame any decision around what consequences it will have on customer retention.
The best fintech companies value their customer relationships because they understand that recurring revenue is the lifeblood of their businesses.
Here are three tips to help you frame your tech decisions in the context of customer satisfaction:
- Don’t sacrifice user demand during a software transition. Consumers want reliable fintech tools, and they cannot afford any downtime. As you update systems, consider making modular, iterative upgrades one at a time to avoid the possibility of having whole systems go offline.
- Customers want to see you grow. They welcome new features. Communicate your growth plans to existing customers clearly, and let them know how building a better service might impact their user experience in the short term.
- Banking is about relationships. The more you can work toward creating a seamless, smooth user experience, the more likely you will be to retain customers.
Images by: Campaign Creators, Blake Wisz