Financial Technology – commonly referred to as FinTech – is the concept of how technological advancements are used to enhance financial services. It makes use of certain data, processes, and algorithms to automate and facilitate financial operations management. Both businesses and regular consumers are affected greatly by FinTech – with major indicators that such form of technology is here to stay. FinTech encompasses several sectors such as banking, fundraising, and investment management.
Since its introduction, FinTech has aimed to be accessible for the average consumer, who deals with banks, online stores, and money transactions on a daily basis. Individual financial activities such as money transfers, online shopping, online banking, and more are becoming increasingly normal, especially this year. With the growing level of digital literacy and with it the amount of FinTech services – such as Fawry, Vodafone Cash, Meeza, and valU – the way consumers communicate with these services, and vice versa, is changing as well.
SMS is one of the simplest yet most powerful tools benefitting the FinTech industry. And it is especially useful for automation processes.
Here are few SMS use cases that can be applied for FinTech companies:
1. Two-factor authentication
Commonly used in retail banking, 2FA helps strengthen the security of accounts and their owners by sending SMS passwords or codes that facilitate basic financial transactions.
For many credit card holders or people who prefer online payments to physical payments, reminders can be very useful to maintain financial health. And it makes FinTech more efficient.
3. SMS alerts
Receiving real-time information about your money-related activities (like withdrawal/deposits) helps prevent fraud in cases like stolen bank cards or just as a financial management method.
How SMS improves FinTech
SMS also improves FinTech in other ways. 83% of text messages are opened within 90 seconds. 90% of text messages are read within 3 minutes, and 98% are read within 10 minutes. This makes SMS the most effective communication method for the industry as the message is surely bound to be delivered and read. With modern concerns like privacy and cybersecurity becoming part of everyday conversation, SMS seems like a foolproof way in FinTech.
More control is given to users who engage with these text messages. When it comes to financial institutions, transparency is at the core of every transaction. By updating and alerting their customers, banks and other institutions using FinTech guarantee customer security and safety.
Additionally, SMS is a major facilitator for speed. Being fast means everything in the digital world. And this is a crucial factor when it comes to access of information, updates, and other time-sensitive processes.
Reasons why SMS is important for the FinTech industry
SMS is viral as it is personal. To promote new products or services, banks and financial companies reach out to existing and potential customers via SMS for faster provision of information.
Consumers are willing to engage more actively with certain promotions if they feel these are customized to serve their best interests. SMS creates a personal relationship between business and consumer.
3. Customer engagement
SMS channels allow for highly targeted and extremely efficient two-way communication. As such, gathering customer feedback and additional insight becomes a simpler process.
4. Customer service
SMS can also be web-based using intuitive and straightforward platforms. Customer support teams can make use of these platforms to streamline their communication and respond to any customer inquiries in a fast and effective manner.
Finally, SMS remains a powerful tool for security, fraud prevention, and other protective measures especially for banking sectors and the FinTech industry.
As FinTech grows rapidly, its need for SMS services remains the same. SMS has proven itself effective since day one, and it continues to evolve making itself a valuable asset even within the digital landscape.
For more information on how CEQUENS can help you utilize SMS in your business sector.