In a year when the pandemic continued to shape the way people live their lives – from remote working to online shopping and virtual gym classes – we saw fintechs firmly secure their spot within the banking, investing and trading mainstream. No longer the digital outsider, the likes of Monzo, Starling and Revolut are giving legacy financial institutions a run for their money and accelerating the digital transformation that started taking place across the industry several years ago.
But the battle to engage and win potential customers – and retain their interest within an increasingly competitive landscape – is far from won. We take a look at the marketing techniques that have emerged or continued to evolve over the past 12 months, and the trends that are shaping the fintech landscape – the things that you need to be aware of (and consider adopting) as you develop and grow your brand.
Artificial intelligence supports the customer journey
Digital marketing activities tend to revolve around moving prospects through the funnel – from awareness to engagement and ultimately conversion. And, thanks to innovations in artificial intelligence (AI), chatbots increasingly fulfil a customer service function at the latter stages of the customer journey.
Providing delay-free answers around the clock – unlike a traditional call centre – chatbots have the ability to reach people on their preferred platforms and messaging apps. Just look at Cleo, a conversational AI that sits on Facebook’s Messenger platform and proactively helps users save, budget, borrow and build credit through tailored notifications. Similarly, digital payments provider Square uses conversational AI to power its virtual assistant, which the team says provides solutions to 75% of customer’s questions.
That brings us to another AI-powered trend, as fintech marketers combine real-time data analytics and machine learning to create personalised products and services, to provide customers with instant responses – say on a loan or an increased credit limit – and to deliver decisions based on facts as opposed to industry assumptions. Take, for example, personal finance-focused fintech NerdWallet, which uses machine learning to match its customers with the best-fit financial products, such as mortgages and insurance.
Following a survey of key decision-makers in the financial services and technology sectors, 86% said data analytics will play an important role in determining their company’s future success and is a must-have for any technology solution they deploy. Respondents identified benefits including securing a competitive advantage, cost savings, winning new customers and building better relationships with existing customers.
The rise of fin-fluencers
Thought influencers and affiliate marketing were for beauty brands and athleisure labels? Think again. With the pandemic prompting people to review their spending and saving habits, more and more conversations about money have been taking place on social media. And with the #finance hashtag on TikTok racking up an incredible 989.3 million views, UK-based fintech Snoop has identified it as a key channel for customer acquisition.
Just as social media platforms not usually associated with financial education are having a moment, fin-fluencers who’ve established a loyal following through their personal finance, money management or investment-themed content are big right now. Going forward, marketers would do well to look at how they can give fintechs access to their target market, help them gain their trust and secure conversions.
Finance trends regularly go viral, like the 52-week savings challenge launched as a result of Plum’s partnership with finance influencers like @mrtradingrobot, which means increased brand exposure and reach. Just look at challenger bank Step, who gained access to Charli D’Amelio’s 91 million followers when they teamed up for a $100,000 giveaway.
Gamification adds an interactive element
Incentives such as giveaways are nothing new when it comes to attracting consumer attention, but digitisation has created more opportunities for finance brands to get creative in how they shape and support the online customer experience. In other words, great service simply isn’t enough these days – people want to feel engaged, educated and entertained.
Gamification is an ideal strategy for this, and we see fintechs incorporating game-like elements and interactive content – like quizzes and puzzles – into their marketing campaigns, apps and platforms. Allowing customers to earn points on every transaction or action – or to receive a kickback for new customer referrals – is also a popular tactic that’s reaping results. In fact, using gamification can help a company increase customer interactions by 40%, leading to higher conversion rates and increased revenue.
For a few examples, take a look at Fortune City – the Taiwanese city-building app that organises your finances, Ukraine’s leading digital bank Monobank, which uses a badge reward system to drive behavioural change, and bill tracking and budgeting app Mint’s goal-orientated progress bars.
The continued demise of cash and credit card
The last time we paid for our morning coffee with coins? Like many people, it was early 2020. Yes, the pandemic has accelerated another trend and cash is no longer king. Reports suggest that by 2026, the UK will be almost entirely cashless, while many Nordic countries are aiming for digital-only transactions by 2023. And while mobile payment apps (Vibe, Loop and Google Pay) and digital wallets (VitraCash, N26 and Curve) move us one step closer to a cashless society, buy now pay later platforms offering 0% interest and the option to pay in instalments (Klarna, Clearpay and Laybuy) are busy moving shoppers away from credit cards.
In 2021, more than 52% of online purchases were made using a digital wallet while, according to Visa, almost 33% of businesses now accept only contactless payments, with 78% of consumers changing how they pay for items as well. As society becomes ever-more digitally oriented, people’s banking behaviour is directly influenced and fintechs must take into account the needs of consumers and be ready to adapt in order to remain crucial.
Contactless and mobile payments are valued for their speed of transactions, convenience and better security, while environmental, social and governance (ESG) directives favour companies that move away from traditional bank notes and plastic payment cards, due to the environmental impact of cash and card production.
In line with the move towards mobile payment apps and digital wallets, more and more people use biometric authentication (like fingertip scan and facial recognition) to protect their payments and personal information, and marketers will need to communicate the steps their company is taking to ensure best practice cybersecurity at all times.
Growing acceptance of crypto as currency
Digital assets are set to take their place in the spotlight. Not only has the crypto landscape matured in recent years, it has also recently received strong endorsements from companies such as PayPal (the platform announced late last year that it will allow users to buy, sell, and hold Bitcoin, Ethereum, Litecoin, and Bitcoin Cash) Square (which has made significant investments in bitcoin over the past 18 months) and Samsung (who partnered with Gemini, a US-based crypto exchange, to facilitate digital currency trading on its wallet app).
The main reasons why cryptocurrencies are gaining acceptance include transactional safety for both merchant and consumers, an opportunity to make the banking space more autonomous by cutting out the middlemen – in the other words, the banks – and the opportunity it presents to populate the virtual space with diverse, tech-backed options. And, in 2022, we predict a crypto renaissance with retail firms and e-commerce brands slowly accepting Bitcoin payments and the continued evolution of crypto unicorns.
Connected to cryptocurrencies, we are also realising the potential of blockchain technology to support the growing peer-to-peer lending industry, which is set to grow to a value of $1,000 billion by 2025.
Fintechs leveraging open banking
It might have been looking rocky, especially after Starling CEO Anne Boden told MPs at a recent Treasury Committee meeting that open banking (OB) “has not been a success”, but we are starting to see a lot of practical uses coming through now and the advantages are being felt across the industry. The Financial Services: State of the Nation Survey 2021 found more than 9 in 10 respondents at global financial institutions agree that OB is important to their organisation and 97% of those already using OB recognise that it has provided benefits to their business.
Put simply, open banking grants access to consumer data (with their consent) by means of an application programming interface (API) without transferring banking functions. Look at Mint, which relies on open banking to collect real-time data from multiple finance accounts, ascertain credit score ratings and review transactions in order to provide users with a detailed view of their current financial situation.
Today, we are seeing OB being used to reduce the cost of peer-to-peer payments and borrowing, while also potentially widening eligibility. For example Plend, which examines a person's transaction history to offer a loan rather than basing lending rates on credit scores. The platform is among a number of voices in the fintech space calling for the government to update data rules to encourage wider uptake of OB. Which is certainly an important consideration, as a fintech’s ability to navigate the regulatory landscape surrounding OB in various countries will become increasingly important if they are to take advantage of this trend.
Increase in white-label fintech infrastructure
What is a white-label partnership? We’ve put together a helpful guide for fintechs and financial services organisations but, in essence, white labelling is when a product or service created by one company (the producer) is then rebranded and sold by a different company (the marketer). Using this approach effectively integrates the service or product into the marketer’s company and makes it look like they created the final product or service.
We expect to see a surge of new banks pop up as off-the-shelf tech has made it easier than ever to set-up a banking infrastructure. And, at the same time, we’ll see more banks aimed at specific communities, such as Incard – which is the world's first payment solution designed especially for online entrepreneurs and e-commerce owners – and Greenwood – a digital mobile banking platform made for Black and Latino customers.
At Growth Gorilla, we can help you determine the right market positioning for your white-label solution, create a marketing strategy to promote your proposition and build the infrastructure you need to drive a successful partnership. In addition, we can help you take advantage of any number of marketing innovations, to ensure your fintech is always on-trend while supporting your growth ambitions.