Only Connect – The Fintech Imperative“
Getting your innovation to market quickly is only beneficial when you interact with customers – and it’s a struggle for fintechs and big banks.
The technological age of fintech has rewarded speed and many companies are successfully measuring how quickly an API can be designed and implemented.
Ben Narasin, a veteran entrepreneur and investor in emerging technologies, believes this obsession with speed is a distraction.
“He is not only the first to act but also the first,” he said in a statement to Money20/20, emphasizing the importance of brand recognition. This challenge will be taken up by experts during the groundbreaking FinTech FaceOff online debate on Tuesday 27 February.
so much peace in one name
This will inevitably be a tough undertaking for fintechs. Consumer awareness of the new challenger variety remains low. Research technology, for example, has shown that few fintechs have double-digit brand recognition among UK consumers.
The best-known fintech brand, Nutmeg, was known to one in four consumers, compared to 83 percent who knew Virgin Money, the least recognized major bank.
When the dental chair is more attractive
It’s hard for beginners to cross the line of conscience, not least because customers are resisting their finances.
Harit Talwar, Marcus’ boss at Goldman Sachs, reminded us in his Agents of Change interview that 70% of millennials go to the dentist instead of the bank. Meanwhile, millions of people are still paying high-interest rates instead of exploring new lenders. “The biggest challenge is customer inertia,” he said.
And for those who can grow, growth has its challenges. On LinkedIn, we saw several brands run impressive and successful campaigns. The downside is that they run the risk of commodification as they grow.
Interference can be easily destroyed on its own, as it goes beyond the waiting fruit of adopted consumers ahead of time.
It’s an experience, not a product.
Attractive products are a way to grab the consumer’s attention. But many in the industry believe that fintechs should differentiate themselves in terms of customer experience.
Santander’s OpenBank is unequivocal about using the bank’s flagship product: “Our brand is the user experience,” an executive told Money20/20. ING’s Ralph Hamers agrees that banking products have become commodities: “You can’t see it product by product. . You have to say it from experience.”
Points may emerge that solve the client’s problem or relieve the stress of an injury. This is the idea behind Goldman Sachs’ recent partnership with tax software brand Intuit. By filing tax returns, customers can find better products to pay off debts they didn’t want to discuss.
Which brand does it belong to?
Things get complicated for branding platforms built in partnership, which creates uncertainty about who “owns” the customer.
Some fintechs think it’s not worth competing in this space. “According to Silicon Valley Bank, which serves high-growth companies, it has to give away some of its customers,” said Reetika Grewal, head of payment strategy and solutions.
Partnership conflicts are also a problem for the existing ones. Customers who trade through Apple Pay are likely to see it as the brand they use; the table behind the interface is masked.
From geography to values
One fintech targeting the brand is Aspiration, which has launched its services as an ethical alternative to traditional banking.
Founder Andrew Cherny told Money20/20 about his quest to find out how customers choose their bank. Three quarters simply chose the nearest branch (although this was only the case for 35% of those under 35).
Cherny raises the question of how people make their choice when most branches are no longer available. He believes that once geographic proximity is out of the equation, consumers will choose the closest brand in terms of values or proportions.
However, as Cherny noted, “oil companies are more diverse than American ones.” When it comes to brands, their work and challenges are ignored.