How Can Fintechs Receive Additional Revenue from Existing Customer Base?

digital asset, trading

The last few years have been key in transforming the traditional model of how finance operates on a day-to-day basis—the “digital-by-default” model has prompted fintechs, as well as retail and commercial banks to spend large amounts of money in IT modifications over the last several years. However, to remain competitive in this fast-transforming landscape, adding digital features might not be enough.

The additional functionalities such as insurance and trading have been growing in popularity. In particular, digital asset trading has seen a rising demand among banking customers. A recent survey showed that 93% of the customers are considering using at least one new payment mechanism in the upcoming year, and as much as 40% of people are planning to use digital assets in the coming year. Yet, concerns about security and regulatory compliance have put many of the fintechs back from the ability to scale and meet the increasing demands of the existing customer base.

Only a handful of financial institutions like crypto-specific trading apps or neo-banks offer the ability to trade digital assets for their customers, observes Vytautas Zabulis, CEO of H-Finance, a regulatory-compliant digital asset trading solutions company. “It all comes down to the complexity of the solutions and knowing what questions to ask internally—how to build and run the solution,” explains Zabulis. “So, it isn’t strange to see companies being reluctant to build something from scratch. This can cost vast amounts of money, time, new regulatory compliance rules and processes to run an in-house digital asset trading solution; this is why only large companies with strong balance sheets can build it themselves.”

While nowadays a significantly larger number of people want to have exposure to digital assets, it is still complicated to do so for most of them. The process involves going to traditional exchanges, opening accounts, transfering money and only then start trading there. Zabulis notes that it would be much easier to have the possibility for this exposure in the daily banking or investment app, which, in turn, would bring additional revenue for fintechs.

“If the money is already in the customer’s daily banking or investment account, then buying-and-selling is just one click away—the funds are available instantly. It’s a rather simple and straightforward solution that takes only a couple of weeks to integrate via a native API. It’s a plug-in-and-play solution for financial institutions and fintechs.”

Facilitating around 200,000 transactions per month, H-Finance’s use cases show that as many as 40% of activated customers start using the digital asset trading feature right away. Taking only around two weeks to integrate, the services cover compliance, IT, capital as well as others. The clients in the first week tend to do an average of at least 4 transactions. “It took some time before stocks were easily accessible for customers on their banking apps; now it is a time for digital assets to do the same,” adds Zabulis.

In the saturated online activity and constant information overload, consumers are noticing when financial services are tailor-made for them. If fintechs as well as financial institutions are seeking to scale and begin receiving additional revenue from their existing customer base, they should start focusing on and understand the particular needs of niche markets, like digital asset trading.


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