FinTech is a unique industry. It is the merging of the two areas that require the most credibility in any given industry — finance and technology. It requires trust from the customer and a certain degree of transparency from the company.
Finance has always been a daunting field — for the common man, it’s a completely different world filled with jargons, men in blue suits and pointy shoes with brows furrowed, and the sound of ringing phones and fervent shouting over the stock exchange.
However, with the exponential growth of technology, it has also meant that these same walls of intimidation are being knocked down. This means that finance, investing, and asset management are all areas the common man is now able to dip his toe in and understand.
With this in mind, FinTech companies are expected to take measures to engage with clients and establish trust. However, this is where they are lacking. Here are the marketing mistakes FinTech firms make.
1. They lack legitimacy
Legitimacy is the focal term here, because it’s not legitimacy in the firm itself (although that certainly is important) but it’s actually the customer’s perceived legitimacy of the company.
With cybercrime on the rise, it’s costing businesses $400 to $500 billion per annum to ward off these attacks, and by 2019, it will spike up to $2 trillion. Paralleling this, the cyber insurance market has doubled in growth from 1 billion to 2.5 billion in the last two years, and this is projected to triple over the next five years.
With financial institutions cracking under cybercrime and failing to deliver quality service and risk mitigation, FinTech firms are popping up everywhere with the promise of security and no legitimacy to back it.
The problem here is they are focusing on the wrong thing. Their marketing tactics focus primarily on their technology — without any consideration of what this means for their customers. As a result, while technologically they might be legitimate and trustworthy, their customers do not feel that way about them.
A better way to approach perceived legitimacy is by selling the implications of the technology rather than the technology itself. Customers want to first know what it means for them, and only then do they want to know what the technology is. Of course, this is when a great marketing strategy can come into play and make them shine.
2. They forget to connect
Emotional connection comes before financial benefit. Companies need to realise that when it comes to money, the two are always connected.
Most FinTech companies offer monetary advantages as their core competency, without taking it a step further in demonstrating the implication that the technology will have in that customer’s life.
As more technologies appear, loyalty levels in customers will decrease. Transferring from one service to another will increase in ease for consumers, and companies will become forgettable. It’s important to mould your marketing strategy around creating some kind of emotional connection with the customer. Once a customer feels connected with your company, money and competitors stop becoming a purchase factor.
3. They don’t address the misconceptions
Corporations have a bad rep — especially financial corporations. Hearing the words “Goldman Sachs”, “JP Morgan”, “Deustche Bank”, and corporations of the like triggers a bitter taste in customers’ mouths. FinTech firms often fall onto the same trajectory as these companies because customers automatically distrust their services, assuming that they are hiding behind the veil of corporation.
Instead of copying the “professional aloofness” that these corporations bring, FinTech firms need to employ predatory marketing in their strategy by realising that this aloofness actually makes customers feel mistrust and distance. FinTech firms should actually focus on bringing a face to the corporation so the customers feel they are dealing with a person rather than with a business.
People trust people. This strategy coupled with increased transparency in business practices, faster response times, and better service all make it easier to market your FinTech start-up.
To summarise, the main mistakes FinTech firms make are not forging emotional connections, not addressing customer misconceptions, and not considering perceived legitimacy. The two main strategies these firms should employ are predatory marketing and selling implications rather than features and benefits.
FinTech firms will rise and fall, and a great marketing and business strategy are two vital things that will make great firms rise above all the marketing noise.
Written by Jeff Cooper, Founding Partner at Step Change
Jeff has conceptualised and implemented million-dollar campaigns for some of the world’s largest brands, including Vodafone, CommSec, Commonwealth Bank, Sony, 3M, and The Australian. He has been crowned as one of the top marketers and entrepreneurs in Australia in B&T and Anthill magazine’s 30-under-30 Awards respectively, pioneered world-first marketing technologies, co-authored a six-book series on strategy, and guest-lectured at Sydney’s top universities on marketing strategy.