By Bob Belan, Co-Founder & CEO of Symple Loans
Innovative financial technology firms (fintechs) all around the world are transforming the financial services landscape and setting new standards for how banking products are designed, distributed and delivered to customers.
According to a recent study by Bain & Company, customer “leakage” from traditional retail banks to fintechs and single-line product specialists is rampant – a trend that began about a decade ago in the US and UK and is now proliferating globally at an unprecedented pace.
The oligopolistic nature of banking in most markets has meant that incumbent financial institutions have historically benefited from low levels of customer attrition. For decades, they’ve tended to rely on new customer acquisition and cost reduction strategies to achieve profit growth – often, however, at the expense of investing in modern technology and processes needed to meet rapidly changing customer needs and expectations. Big banks are now plagued by legacy systems and antiquated capabilities that make change difficult and slow.
Fintech disruptors have capitalised on this opportunity – attracting new customers by offering simple digital interfaces, easy-to-use product features and more competitive prices – delivered through low cost, state-of-the-art capabilities and a maniacal management focus on continuous improvement. As a result, fintech market share gains (for retail banking products in particular) continue to accelerate.
Market Share Growth in U.S. Unsecured Personal Loan Market Driven by Fintech
Delivering a better end-to-end customer experience in banking – one that offers ease, convenience and consistency – leads to greater customer loyalty and has proven to be a key ingredient in delivering sustainable financial outcomes and long-term outperformance results.
The research on this topic is clear and the philosophy is one we subscribe to at Symple. Importantly, it’s why we rely on Bain’s Net Promoter Score (NPS) System to guide the strategy and day-to-day operations of our company.
NPS allows us to frequently collect and analyse customer feedback, then continuously engineer solutions that better meet the needs of our borrowers. Symple’s management team’s focus on ongoing improvement based on what matters most to customers is reflected in our NPS results, which places us favourably relative to global industry benchmarks.
Global Bank Net Promoter Scores – 2019
NPS theory and analytics tells us that loyalty clearly correlates with profitable organic growth. In speaking with Fred Reichheld, Advisory Partner at Bain, who created the Net Promoter system of management, his view is that “delivering an outstanding experience is how you turn a customer into a promoter. Promoters grow your business more efficiently than any sales force or marketing campaign: they come back for more, increase how much they buy, refer friends and provide constructive feedback. Generating more promoters is the only sustainable way to grow a business.”
As a rapidly growing alternative lender operating in the Australian market, our success will be driven by our ability to attract and then retain customers at scale. Our product, service delivery, digital lending experience must be exceptional in order to effectively compete in an evolving banking landscape. NPS has already proven to be a valuable tool in guiding our strategic and operational decisions to date and will continue to be a key ingredient in helping us extend our competitive edge.