Why FinTech Startups Will Not Win If They Play Like The Banks

My recent experience with  Startup Revolut has shown me that the can still sleep quietly for a while as Fintech Start-ups will in fact not be in measure to disrupt the industry if don’t also change the rules of the game…

simulator screen shot 10 dec 2015 16.26.03What went wrong with Revolut?

“Revolut is a Global Money App, cutting your hidden banking fees to zero. It allows you to exchange currencies at perfect interbank rates, send money through social networks and spend with a multi-currency card everywhere MasterCard® is accepted. All this is done at the touch of a button, in a beautiful mobile application. Our goal is to completely remove all hidden banking costs.” Source: https://revolut.com/about

So what went wrong with my Revolut account… I used my multi-currency card abroad to pay for goods in Euro. I received a VAT refund in Euro that was to be re-credited to my Revolut account. But today, when I logged into my account, I noticed that the refund had been re-credited in Sterling, with someone taking a hefty spread in the process…

So in simple words, it did not go as planned, the client promise was broken, and the hidden banking costs were suddenly very visible… I decided to query this with the Revolut customer service…

Adopting the same approach to client service as the banks is recipe for failure

What clients of FinTech Start-ups want is a completely different approach that puts them at the center. They want services that are not only answering their needs, but that are also:

  • simple to use
  • fast
  • convenient

FinTech Start-ups have understood that, or at least, part of it…

They are leveraging new to outgun the banks that are suffering from their archaic systems. The claim is that FinTech Start-ups armed with integrated systems, new algorithms and access to social networks can now analyse client sentiment real time and can offer the right service at the right time, for the right price.

From Pixabay

From Pixabay


Banks on the other hand are struggling to make sense of big data. Because it lives on several databases and systems that are hardly integrated, because they did not think of asking clients the right to use this data twenty years ago when they signed them up, and because of plenty other valid reasons, mining through this data is a difficult, near impossible, task.

Clients are attracted to FinTech Start-ups because of the glitter this new lawyer of technology provides. They see the novelty in the approach and they believe something has changed…

Clients love the new simplicity – no more endless paper form to sign, all is done with a click on a fancy app interface and they even work with pictures of you, your ID card or proof of residence taken through your smartphone!

Clients love the increased speed – they can do it here and there, through the internet and 4G mobile connection, wherever they are, no more need to visit a branch in person.

Clients love the convenience – FinTech Start-ups provide the same services as traditional banks, often even better, and at a fraction of the price they normally pay their bank.

From Pixabay

From Pixabay


But underneath, unfortunately, it seems nothing has changed… When the acid test comes, when something goes wrong at a FinTech Start-up… then the same old mechanisms that make you hate your bank re-surface:

Claiming that they did not do anything wrong

“Just to inform you that we don’t have any control over the refunds. Refunds are processed automatically after the merchant’s release.”

Putting the fault on the other party in the chain

“It is not our fault as we are not able to choose the currency for the merchant” or “if you were expecting to receive these refunds in Euros, and apparently you have received in GBP is because the merchant released then in this currency.”

Invoking procedures and rules that prevent them doing it the simple way

“However there is a procedure that needs to be followed. Especially when, as in this case, we didn’t have any control and the way to rectify it, is to raise a chargeback.”

Referring client to another department or to third party as the solution lies outside their competence

“I will forward this to the chargeback team.” or “You can contact the merchant and ask for clarification.”

This behaviour will not help FinTech Start-ups win!


Clients are asking for a great customer experience, they are asking for simplicity, speediness and convenience, even when, or especially when, things break. This is exactly where FinTech Start-ups need to make the difference.  Playing it the banks will not satisfy clients, it will end up putting FinTech Start-ups and banks in the same basket.

What should have happened instead at a Fintech Start-up?

First, the FinTech angle should have kicked in immediately:

From Pixabay

From Pixabay

The data analysis should have been instantaneous, with artificial intelligence reading the support chat channel and picking up that I was growing more and more upset by the interaction with the customer service representative. This was visible in the language I was using and the speed at which I was typing (and the accompanying typos).


From Pixabay

From Pixabay

Social Media listening should have also indicated real-time that I was starting to tweet about my problem and my frustration at the lack of understanding from the customer service representative, and that I was starting to drag influencers in the discussion.

This would have also been supported by a rapid scan to establish my social media strength (number of followers, Klout score, retweets and likes) and the risk of PR damage that could result.


Finally, the CRM system should have spitted out a customer profile showing that over the past 4 months:

I had increased my volume of transactions significantly (so I was on my way to become a “good” client)

that all transactions I had done were in Euros and that there were no transaction in GBP (so there was possibly something abnormal with those two transactions in GBP)


Then, the Start-up angle should have also played a role:

&; The customer service representative should have calculated the costs involved to solve the issue quickly and bring immediate satisfaction to the client:
namely by reversing the two transactions in GBP into EUR, at an exchange rate of 1 GBP for 1.1177 EUR – which was 54.78 GBP x 1.1177 = 61.23 EUR, when I was claiming I should have received 64.50 EUR – that means a cost of 2.92 GBP.

&8211; The customer service representative should have then assessed how much effort any other alternative solution would take:
time spent by customer service staff to escalate the client’s request, plus time spent by the compliance team to raise a chargeback request and deal with the third party to fix the issue and to that, add the potential loss of faith in the product by the client, plus any potential damage to the brand resulting from the negative publicity on the social networks.

&8211; Armed with those two assessments, the customer service representative would then decide quickly which solution would be the most satisfactory for the client and the less expensive for the FinTech Start-up to execute and would have executed it.


So, in other words, the customer service representative should have assessed what was my issue with Revolut (i.e. refund process did not work properly), should have assessed the most practical and easiest way for Revolut to address my need (i.e. fix the refund by compensating the difference) and should have asked me how Revolut could still increase my client satisfaction (i.e. reinforce their client promise and turn me into a champion of their brand to drum up more business).

FinTech Start-ups need to embrace a client-centric approach

FinTech Start-ups need to go further than just layering a fancy new technology on one of the oldest jobs in the world if they want to win. They need to adopt a client-centric strategy, putting client satisfaction at the core. Because it is the alliance of technology and client-centric approach that will help them beat the banks.

Client-centric champion Amazon would have paid back the 2.92 GBP in a split-second and would have probably issued a compensation voucher to make up for the bad customer experience. This would have reinforced my trust in their brand and would have led me to sing their praises on the social networks, bringing them additional clients attracted by this positive client experience sharing.

FinTech Start-ups need to do the same, before Amazon starts doing FinTech…

This article first appeared on Lionel Guerraz&8217;s Blog

Featured Image: From Pixabay

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