With Fintech Scaling Fast, Customer Service Is Still On Hold
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Hi all, Julie here. I’m actually surprised I haven’t been inspired to write about the following topic until this week. That’s right, we’re diving into customer service. Maybe I was just trying to avoid going down this rabbit hole. But in case you guys weren’t aware, most fintech companies have a lot of issues in this department.
You wouldn’t necessarily think that’s the case since NPS are still pretty high, but part of that is because of the lack of stiff competition from banks. I’d also expect the scores to go down as upstarts in the space get bigger. “It’s a challenge to maintain high NPS and manage your operating expenses,” a friend in the FTT Slack community said. And guess what? These businesses just grew a hell of a lot faster than companies were expecting due to COVID. I worry if systems can keep up. So far, there are some negative signs.
For instance, the article that made me take the leap and write about this shows how Cash App, Venmo and other payment apps are seeing an increase in fraud, and customers are having a hard time getting a hold of them when this happens. PayPal’s Venmo appears to be doing a better job of this, but Square’s Cash App has apparently become known for its fraud issue. Here’s a clip from the article referenced above:
Another person in our Slack community said: you’d think companies started and run by engineers would be better at human relations (this is sarcastic if you couldn’t tell). This made me lol. In fairness, having a good customer service team is expensive and can often be as big as or even larger than the rest of the company combined. This is also a team that needs to scale rapidly if you experience a surge in growth. It’s unrealistic to think that people won’t call when they face issues with their financial services provider, digital or otherwise. If someone has any serious issue and can’t get a hold of someone, the way they view you can take a huge hit.
“It’s tricky/often wrong to cost optimize your CS up front because they can become a valuable source of customer insights and bug finding at a stage where you don’t have many other safety net resources.” -Another Slack community member.
We’ve picked on Cash App a bit since that’s one of the most recent examples, but I could name a ton more. I remember robo advisers seeing services go down during market volatility and customers sending loads of angry tweets. I recall Chime having a hellish few days right before Money 2020 last year where users couldn’t use debit cards, deposit checks or check balances. This was especially painful to watch due to how much their customers rely on them (many living paycheck to paycheck and not having credit cards). Oh, and we can’t forget perhaps the worst offender of them all: Robinhood. Like, just check out this lede from a story out last week:
Robinhood knows this is an issue. It’s begun trying to work on that by more than doubling its customer-service team this year and still growing, but after trying to operate at an extremely lean level for years, there is some serious catching up to do.
Another Slack member notes that these closed loop apps still don’t have direct fraud regulation, and it’s very possible they will only move when NPS scores take a big hit. Just like Covid accelerated the usage of these apps, I’d assume Covid will also accelerate that hit to NPS. And if the NPS hit isn’t enough, I fear it might take regulators stepping in and making a change. DC has definitely been paying more attention to our space in 2020, and while it might take awhile for there to be action, I doubt they’d be afraid of levying a few compliance fines.