# Lost in Translation: Why Banks Must Learn the Language of their Customers
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-07-20
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Are Banks Still the Best for Businesses?
Meta Description: Discover why banks remain preferred by SMEs despite the rise of fintech, as explained by Mark Hartley from BankiFi. Read more on the changing landscape of the
URL: https://financedigest.com/lost-in-translation-why-banks-must-learn-the-language-of-their-customershtml

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_By_ **_Mark Hartley,_** _Founder and CEO at BankiFi, explores how banks can collaborate with and learn from the fintech industry in order to communicate more effectively with SMEs and meet their needs._

Back in 2017, the future of the fintech sector and its potential felt truly limitless. Bold claims were bandied about including the theory that the movement would soon supersede the traditional [banking sector](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") in terms of popularity. Nowadays, things don’t look as cut and dry. Personally, I’m still a supporter of the fintech [sector and feel that there is still vast potential for it to create real change for businesses and consumers](https://www.financedigest.com/consumer-durables-sector-still-feeling-the-effects-of-recession.html "Consumer durables sector still feeling the effects of recession"), but I’ll also admit that a lot of those early proclamations have now been shown to be quite wide of the mark.

Ultimately, the staying [power of the banks](https://www.financedigest.com/danich-local-and-regional-banks-launch-mobile-wallet-powered-by-nets-new-hce-and-tokenisation-platform.html "DANICH LOCAL AND REGIONAL BANKS LAUNCH MOBILE WALLET POWERED BY NET’S NEW HCE AND TOKENISATION PLATFORM") was much greater than many people expected. Despite the devastation of the financial crash and more recently with the Covid-19 pandemic, the broader banking sector remains strong and where people still feel most comfortable and trusting when it comes to depositing, sending, and [saving money](https://www.financedigest.com/how-to-save-money-for-a-car.html "How to save money for a car"). This argument extends to SME customers, who still largely want to use traditional [banking portals to conduct business](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes").

**ARE** [BANKS STILL THE BEST FOR BUSINESSES?](https://www.financedigest.com/reckon-introduces-link-to-bank-data-to-help-small-businesses-streamline-the-reconciliation-process.html "Reckon introduces link to bank data to help small businesses streamline the reconciliation process ")

The recent failure of the UK’s Incentivized Switching Scheme perhaps best highlights the idea that business [customers still prefer traditional banking](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") institutions. Some years on from its launch, it’s now safe to say the scheme has significantly failed to reach its initial targets, despite spending close to £220m in sweeteners that looked to encourage SMEs to transfer business accounts over from traditional, legacy banking companies and into the hands of new and emerging [challenger](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") banks \[1\].

Similarly, despite receiving significant capital under the Banking Competition Remedies fund, challenger [banks have been unable to capture any significant market](https://www.financedigest.com/in-a-rising-market-are-banking-outsourcers-pulling-their-weight.html "In a rising market, are banking outsourcers pulling their weight?") share within the world of SME customers. In fact, between 2018 and 2020, the number of people using a ‘Big Four’ [current account](https://www.financedigest.com/euro-zone-current-account-deficit-widens-again-on-large-energy-bill.html "Euro zone current account deficit widens again on large energy bill") only decreased from 94% to 90% \[2\]. Still, over this period overall adoption rates of challenger [bank and fintech](https://www.financedigest.com/fintech-v-the-banks-uneasy-bedfellows-or-a-match-made-in-heaven.html "FinTech v the Banks: Uneasy Bedfellows or a Match Made in Heaven?") solutions has risen, however, these services have often been used to supplement services already offered by larger companies.

**STRIKING THE RIGHT BALANCE**

The numbers are quite damning, but it’s too easy to write the fintech movement off as totally underwhelming. Undoubtedly, the [sector has helped to expose several big issues within banking](https://www.financedigest.com/big-ecb-hike-adds-fuel-to-the-banking-sector-fire.html "Big ECB hike adds fuel to the banking sector fire"), which can’t be ignored for much longer. Most notably, the [banking industry](https://www.financedigest.com/the-survival-of-the-banking-industry.html "THE SURVIVAL OF THE BANKING INDUSTRY") continues to lag behind in its marketing efforts. The fintech sector doesn’t struggle with this. In fact, while I wouldn’t go as far as to call the sector ‘style over substance’ it certainly has marketed the absolute most out of the limited value it can really offer.

So, we’re left with one industry, which customers clearly trust, and who are able to deliver genuine value-added services, and another, which customers are still unsure about, yet it   manages to market its services in ways that people find intriguing. Ultimately, it’s all a bit of a mess, and often distracts from some of the more pressing questions surrounding the broader [financial market](https://www.financedigest.com/the-political-wildcard-what-is-trumps-us-presidential-nomination-doing-to-financial-markets.html "The political wildcard: What is Trump’s US presidential nomination doing to financial markets?"). Chief among them is the question of whether either [sector is currently doing enough to help those using its services](https://www.financedigest.com/decline-in-german-services-sector-eases-raising-hopes-for-milder-recession-pmi.html "Decline in German services sector eases, raising hopes for milder recession -PMI") on a daily basis.

**DON’T FIX WHAT’S NOT BROKEN**

I won’t name names, but we’ve [seen this phenomenon across banking](https://www.financedigest.com/bank-of-canada-seen-on-hold-even-as-economy-accelerates.html "Bank of Canada seen on hold even as economy accelerates") players. Whether it’s abstract TV adverts that don’t relay actual customer benefits, or the industry’s long running resistance to fully embracing the digital sphere. Similarly, the fintech sector has similar issues, seemingly [becoming obsessed with a new trend every year](https://www.financedigest.com/2022-the-year-future-payment-trends-become-reality.html "2022 – the year ‘future payment trends’ become reality?"), whether that’s Buy Now, Pay Later or crypto. While these trends may look good on paper, they seldom serve to help solve the real economic issues of the day, namely [cost of living](https://www.financedigest.com/five-cost-of-living-trends-expected-in-2023.html "Five cost of living trends expected in 2023") increases, and rising interest rates.

The good news is that the respective strengths and weaknesses of the two industries complement each other quite well. If [banks can learn to speak to customers](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") in the ways that fintech companies do, then they will undoubtedly see renewed interest in their products and can deliver real value. Likewise, if fintech businesses can [learn from the banks](https://www.financedigest.com/learning-the-lessons-of-the-bangladesh-bank-heist.html "LEARNING THE LESSONS OF THE BANGLADESH BANK HEIST") and begin to deliver services, which truly help customers in their daily lives, then they may soon start to see the robust product adoption rates first envisioned in 2017.

**COLLABORATION IS KEY**

I’m going to make a prediction that we currently stand at the precipice of a huge correction across both sectors. In my opinion, this culture shift will take [funding capital](https://www.financedigest.com/galois-capital-flagship-fund-to-close-after-ftx-losses.html "Galois Capital flagship fund to close after FTX losses") away from projects peddling speculative, high-risk solutions, and instead move it towards more grounded and warranted financial services. As such, increased collaboration between fintech businesses and the traditional banking sector would now be beneficial for both parties, but most importantly, would invariably [benefit customers and SME](https://www.financedigest.com/5-benefits-of-iso-9001-certification-for-smes.html "5 Benefits of ISO 9001 Certification for SMEs") owners.

In this endeavor, there’s absolutely no doubt that brand is important. At BankiFi, we recently conducted internal research on the subject. The findings indicate that users place far more trust in third party apps, which are more closely aligned to a [banks’ brand](https://www.financedigest.com/banks-need-to-become-a-lifestyle-brand.html "Banks need to become a lifestyle brand"), or look like they were an extension of the bank rather than something separate. However, to make good on this demand, the [banking sector must get infinitely better at marketing](https://www.financedigest.com/improving-reputation-in-the-banking-sector-through-marketing-communications.html "IMPROVING REPUTATION IN THE BANKING SECTOR THROUGH MARKETING COMMUNICATIONS") itself to customers, which is where the fintech industry can really help.

[**BUILDING A BETTER WORLD FOR SME CUSTOMERS**](https://www.financedigest.com/how-do-you-build-customer-loyalty-3-steps-to-follow.html "HOW DO YOU BUILD CUSTOMER LOYALTY? 3 STEPS TO FOLLOW")

With the right approach, fintechs and [banks can align their respective strong points to deliver services to customers](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS") that truly add value. In short, the time is now for both sectors to stop looking at each other as rivals, and instead begin to assess the significant synergies that can be manifested from a closer working relationship. Of course, it’s a change that’s going to take work and patience, but the goal is highly achievable and will benefit all involved parties, including personal and business [banking customers](https://www.financedigest.com/how-will-the-introduction-of-digital-banking-impact-customer-perception-and-overall-loyalty.html "HOW WILL THE INTRODUCTION OF DIGITAL BANKING IMPACT CUSTOMER PERCEPTION AND OVERALL LOYALTY?").

For more information about BankiFi, please visit: [www.bankifi.com](http://www.bankifi.com)

\[1\] – [https://www.fstech.co.uk/fst/BCR\_CIF\_Pool\_E\_Challenger\_Bank\_Grants.php](https://www.fstech.co.uk/fst/BCR_CIF_Pool_E_Challenger_Bank_Grants.php)

\[2\] – [https://www.fca.org.uk/publication/multi-firm-reviews/strategic-review-retail-banking-business-models-annexes-final-report-2022.pdf](https://www.fca.org.uk/publication/multi-firm-reviews/strategic-review-retail-banking-business-models-annexes-final-report-2022.pdf)


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