The UK is still the market leader in fintech innovation. But with investment in the sector hitting a four year low, those looking to grow are looking across the pond. For many, the US is a land of fintech opportunity.
American banking continues to lag behind Europe in several key areas: open banking adoption, fast payment systems, and truly mobile-native experiences. For nimble fintech businesses that have prioritised delivering a top-tier customer experience (CX), US soil is fertile ground for growth.
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But it’s not as simple as just relocating and replicating what worked in London.
A new kind of disruption
One of the key differences between European and US banking is the digital infrastructure. Despite growing digital adoption, a third of Americans cite branch proximity as a deciding factor for them in deciding who to bank with.
In contrast, fintech success in Europe was built on environments and infrastructure that were ready for digital-first banking.
Therefore, fintechs can’t rely on a slick, beautiful app to resonate with US consumers. Instead, these European fintech interlopers are going to have to consider finding a way of delivering in-person experiences to marry with their digital offerings.
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By GlobalDataThose that are successful will utilise experience design as deeper than surface-level UI and use it across all levels of the banking infrastructure. All while ensuring that it is creating an experience that US consumers are familiar with and can trust.
That could mean embedding a call centre agent handover in mobile flows, for rethinking onboarding journeys to accommodate offline dependencies.
And for those, such as Revolut and Starling, who are considering bypassing the banking license red tape, and pursuing deals to buy US banks, their experience must be retrofitted – no small feat.
Building on existing strengths
Hassle-free banking experiences are the bedrock on which the entire fintech industry is built.
And to gain a foothold in the US, fintechs are going to need to build on what they’re already doing well: delivering experiences that are increasingly personalised and engaging.
Anticipation, not just responsiveness, will define the next wave of fintech CX. Delivering “moments of surprise” that anticipate a pain point before it arises, without explicit input from a user. For example, nudging a customer before a late fee might apply, making for a more trustworthy user experience and the feeling that the bank is a partner, rather than a purveyor.
Incumbents will likely respond to the challenge with improved apps and ecosystems of their own. The opportunity for the challengers lies in building on their head start when it comes to CX.
CX as a strategy, not a tactic
In many banks, CX has been forged through a series of incremental improvements to reports, menus, or onboarding flows. But the success of fintech challengers has laid bare the need for CX to be baked into digital infrastructure from the beginning. The customer experience defines modern banking, and it should be viewed as a strategic point of difference.
Starling has done this better than most. Its UK operations continue to deliver for consumers, but the company has also packaged its internal technology stack as Engine by Starling, a cloud-native, modular banking platform it now sells as SaaS. This move turns its CX architecture into a marketable asset and positions it to modernise mid-tier institutions from the inside out.
If its US expansion includes acquiring a legacy bank and rebuilding it on Engine, Starling won’t just be exporting software but a new operating model, built on experience logic.
The land of opportunity
The top-tier digital experiences they are known for might not be an instant hit with Americans, for whom real-life banking remains key.
Even if they don’t opt for a blended approach, though, fintech brands will still succeed in the States. And that’s because for them, unlike the incumbents, CX has become more than a tactic. It’s the cornerstone of their strategy.
And by bringing this approach across the Atlantic, it could well redefine what “banking” looks like in the US.
Nick Merritt, Executive Director, Designit
