Why even the smartest fintech firms still need humans

Algorithms, automation and machine learning are trending towards one thing: reducing or eliminating the need for human labour. But in the world of fintech, humans aren’t just necessary – they’re irreplaceable.

30 years ago, it was perhaps unimaginable to think that enormous financial decisions could be made, without speaking to a human throughout the whole process. We’ve grown accustomed to the fact (and in fact welcomed) that banking, mortgages, and insurance can be conducted entirely in a digital manner.

But, despite society facing an unprecedented level of technological sophistication and increasing innovation, there’s an integral requirement for human intervention, both on the surface and behind the scenes.

Within the business

Although the tech is undoubtedly the focus of any fintech, the humanistic element is integral to the delivery of their product. It’s not just the obvious need for human developers to write, maintain and optimise code nor to imagine the products that make the code necessary. Even if these processes could be automated, the need for humans would remain.

That’s partly because ‘build it and they will come’ doesn’t apply to the noisy, competitive world of fintech. Even the most disruptive, compelling and revolutionary products will add more noise than signal. And so, all things being equal, it’s shrewd branding, marketing and PR that will help a product cut through – all things that require unparalleled human input.

Online mortgage brokers, for example, face unique challenges to convince customers to switch from traditional brokers and loyalty to their banks or existing lenders. This is just one area in which human empathy and creativity can’t be replaced or emulated by technology.

Consumer attitudes

Consumers can be understandably reluctant to trust small, relatively unknown startups with their personal and financial data, particularly if it involves one of the biggest purchases you can make – which means some fintech firms have a harder job than their more established rivals.

A survey of 2,000 consumers conducted by TopLine Comms found a massive 83% were ‘unsure’ of fintech companies and how they work. Interestingly, almost a third (27%) cited a lack of understanding as the reason why they were unsure.

Fintech firms can only earn trust by understanding and addressing customers’ concerns, or educating consumers through marketing, communication and branding – and this empathy can’t be automated or faked using technology.

But that’s just acquisition. Customer experience is what turns a sceptical user into a customer, and a hybrid approach that uses tech and human interaction may be the key to the best customers experiences in fintech.

To use the same example, fintechs in the mortgage space can use tech to free their human advisers from the laborious and time-consuming parts of the job so that they can spend more time finding the best deal for their customers and building a relationship that fosters trust.

These relationships build advocacy, which can in turn convert others. In a survey by Podium, 93% said online reviews affected their decision to make a purchase or not. If positive relationships translate to positive reviews, the human element of the customer experience has a multiplier effect.

Of course, for some, the very appeal of an online alternative to a traditional service such as a mortgage broker is that they won’t have to deal with a human. Issues around creditworthiness and complex financial situations can be sensitive, and customers in these circumstances may prefer not to speak to someone. Entirely digital experiences, perhaps augmented by chatbots that use Natural Language Processing (NLP) and machine learning, could be the best solution for them.

In reality, both kinds of consumers exist – and so a hybrid model that uses tech and human interaction to improve the customer experience may be the most pragmatic approach.

‘Human touch’

Richard Hayes is the CEO and Co-founder of online mortgage broker Mojo Mortgages. Richard’s experience tells him customers still want to deal with humans but knows how much tech can improve customer experience.

He said: “There are customers out there that want to transact digitally, and there are also ones that want a human touch. Particularly with complex financial products such as mortgages, we’ve found there are also customers that want a hybrid of the two.

“Our balance between human and technology, allows us to create the perfect mortgage experience for consumers thereby giving them a greater sense of confidence when buying”.

The future

As fintech goes mainstream, consumer attitudes may change. As tech gets more sophisticated and ubiquitous, people may start to feel less apprehensive about trusting new companies with their data. The advent and widespread adoption of Open Banking could enable this paradigm shift.

But in the meantime, fintech will still face the twin challenges of making themselves stand out in a crowded marketplace and converting sceptical consumers. In both cases, humans will remain an essential and irreplaceable component to any successful fintech.