The FinTech sector is creating waves in the financial industry and other business verticals as well. It is helping companies improve their business models and reduce risks in various processes; be it lending, payment, credit management, wealth management or enhancing security protocols. Through cutting-edge technology, consumers are now able to get high-end user experiences.
But, the industry also is a frequent victim of tough issues like lack of transparency, slower adoption rates, redundant technologies, regulatory uncertainties and security breaches. These factors pose great challenges for marketers in the FinTech sector, which should be known to founders and investors as well.
Establishing credibility has always remained a tricky issue, when any new technology is involved. Add to that your hard-earned money, and things get even more difficult. Compared to other sectors, hype-building is not beneficial for long-term success because financial returns are measurable. FinTech companies also lack regulatory certainties and the huge brand recognition that large financial institutions enjoy.
With the help of digital marketing, this issue can be tackled, if done in the right manner. Millennials occupy a significant portion of the target audience for FinTech companies. This demographic is tech-savvy, highly active on social media and looks for online solutions for almost everything. A useful marketing strategy here would be to publish well-researched educational content, which reflects on a company’s expertise.
Data analytics tools can help identify customer behaviour and problems, in order to make strategies that ensure amazing user experience. Transparency needs to be maintained across all communication channels; a service offering should not look like a gimmick.
Competing with Huge Financial Brands
FinTech companies still lack the high brand value and financial distribution services of big banking and insurance giants. This is a challenge especially for fledgling FinTech startups. At the same time, traditional financial institutions have lagged behind in innovations, which has made them highly unpopular with the tech-savvy millennials. This is an opportunity for FinTech companies to differentiate themselves from the big players.
FinTech companies need to structure digital content around the benefits they can offer customers over traditional financial services companies. Companies have to educate consumers that new startups can better adapt to evolving technologies and high customer expectations than traditional brands. They might be better equipped to handle issues like fraud, confidentiality and slower transaction times.
Lower Marketing Budgets and Investment Allocation
FinTech start-ups lack big budgets, in contrast to their traditional counterparts. They are mostly dependent on venture funding, which means that marketing initiatives are constrained. In case, a marketing technology fails, smaller companies will find it more difficult to recover.
However, investments have grown steadily through the years in this sector. People have realised that FinTech solutions have enabled an improved Point-of-Sales (PoS) system and cut down on various transaction costs. Payment apps and digital wallets are providing them quick access to their money for transactions and bill payments. Investments have risen from $1 million in 2014 to more than $20 million by the end of 2018.
Inbound marketing is a good solution for start-ups that lack huge marketing budgets. Big companies are yet to harness the power of social media, a relatively cheaper solution. In fact, 87% of a target group of 1,002 consumers thought that social media exercises of big banking giants have been ineffective, according to a 2014 report by Carlisle & Gallagher Consulting Group, published by The Guardian.
Sharable marketing content can provide more leads than expensive marketing ads. People seek interesting content on social media sites and have developed a love for videos and infographics over the years. But, it is unwise to underestimate the value of a good research report or a well-written whitepaper, in order to attract long-term investors. As a company offering state-of-the-art financial technology to the masses, a considerable amount of professional expertise will be expected by consumers.
Fintech is leveraging disruptive technology to cater to consumer needs. While this is brilliant, how do these companies survive the intensifying competition? Today’s young audience has so many options to choose from; moving independently from one service provider to another, which makes it important to focus on customer retention.
Marketing strategies need to involve customer reward schemes periodically. Loyalty-based programmes and user-generated content can help with this. Through user-generated content, companies give a voice to their customers; it shows that a brand cares enough to listen to user problems and achievements.