Financial technology or fintech is revolutionizing how we manage money, invest, and make payments. In other words, fintech is all about merging new innovative technologies and finance to create new products and services that make certain financial tasks
much easier. However, the adoption of new fintech products is not always smooth and firms have to go to great lengths to ensure that clients understand the value and importance of new products. The main inhibitors include consumer skepticism and trust in unfamiliar
platforms. Free trials emerge as a powerful tool in this context allowing firms to create a bridge between potential users and fintech firms to overcome barriers of trust, complexity, and understanding, thereby fostering wider adoption of fintech products.
Trust Issues in Fintech Adoption
Trust is a cornerstone of the financial sector as consumers are naturally cautious about new financial products, given the risks associated with security and scams. This skepticism is heightened in digital space where privacy and security are at stake. Studies
have shown a general reluctance among users to try new financial platforms. This is why the need for fintech companies to build trust from the outset is critical. One of the most susceptible sectors to user trust challenges is the Forex brokerage scene, where
scams and fraud are common. Many legitimate brokers started to use various creative tactics to attract clients. One such broker is XM who is well-regulated and has been around for years.
XM brokerage offers a real trading account without a deposit to ensure traders have the opportunity to have hands-on experience with the broker’s various platforms and products. However, it is not only the financial trading industry that faces challenges
of adoption and user trust and a free trial can provide an effective solution. The main reasons why users are so reluctant to adopt new products are the complexity and lack of understanding of new fintech services.
Complexity and Lack of Understanding
Fintech products often require direct hands-on experience and interaction before their full value can be gauged. Through free trials, users can experience the benefits firsthand which improves the likelihood of conversion significantly. This direct hands-on
experience is crucial in demonstrating the practical benefits and ease of use of fintech applications. Since fintech has often dealt with innovations and advancements in a scientific field this lack of understanding is natural and allowing users to directly
interact with new products can be a powerful marketing method for attracting new clients for the firm.
Case Studies of Successful Free Trials in Fintech
There are a multitude of examples where
fintech companies achieved enormous success after employing free trials and other similar hands-on experience methods.
Personal Finance Management Tools: Mint
Min is a leading personal financial management app, that offers users a set of budgeting tools at no cost. This method of offering services for zero investment from the user has shown the effectiveness of hands-on experience in the fintech space which has
significantly expanded Mint’s user base.
Investment Platforms: Robinhood
Robinhood is a famous investment platform that provides commission-free trades, allowing users to experience stock trading without the traditional cost barriers. This innovative approach has demystified investing for a new generation and enabled Robinhood
to acquire a large client base through wide adoption. The platform has been a hot topic of discussion on Reddit also contributing to its popularity.
Cryptocurrency Exchanges: Coinbase
Introducing a unique form of a free trial by rewarding new users with a small amount of free Bitcoin allowed Coinbase to build a large user base. The rewards were given after completing educational modules about cryptocurrency and blockchain technology.
This strategy has not only incentivized new users to learn about cryptos but also provided a hands-on experience with digital assets contributing to Coinbase’s growth.
Insurtech: Lemonade
Lemonade is a fintech company in the insurance sector that introduced AI and behavioral economics providing transparent fee structure and fast claim processing. This model served as a hands-on experience opportunity for their efficient and user-friendly
service, allowing Lemonade’s rapid adoption and high satisfaction among its customers. Lemonade combined AI hype with the ability to allow clients to fully experience the speed of its services which is more a combination of marketing and hands-on experience.
Peer-to-Peer Payments: Venmo
Venmo introduced
peer-to-peer payments allowing users to transact small amounts without fees. While not directly a free trial, Venmo allowed a unique hands-on experience by offering users super low transactions for zero fees solidly building its client base.
Overcoming Barriers with Free Trials
Free trials are powerful tools in the hands of fintech companies allowing them to address challenges such as issues of trust, complexity, and the need for hands-on experience, creating a compelling case for their use in fintech. As we can see, top firms
such as XM, Mit, and a multitude of others have employed such tactics to increase their client base and user satisfaction. By offering a hands-on experience clients can test the firm’s products and become familiar with new technologies.
In the end, fintech companies should implement effective free trial periods that lead to higher conversion rates, emphasizing user-friendly experiences and transparency.
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- Source: https://www.finextra.com/blogposting/25683/why-free-trials-are-so-important-for-fintech-product-adoption?utm_medium=rssfinextra&utm_source=finextrablogs
