Fintech Brands — Evolve or Die
The past couple of years have been a rough ride for Fintech brands. From Neobanks, to payment providers and Investment Platforms, everybody has had different dilemmas.
I remember the first time I saw a Monzo card, it felt fresh, colourful and I needed an invite to get one. The kicker I could dodge withdrawal fees abroad. Now everyone has a colourful card and the benefits aren’t as great.
COVID-19 led to the original challenger bank Monzo posting record losses as people ceased contactless payments during lockdown and put their money in savings accounts with traditional banks. Trading apps like Robin Hood and Trading 212 had great years financially but the Gamestop saga and accusations of gamified features similar to slot machines hit a heavy blow to how people saw their brands. And Klarna, the Swedish payment solution unicorn, reported its first ever annual loss amid claims that they encourage debt amongst young people. Although not completely fair to say this was a result of COVID-19.
In the short-term these companies will survive with fresh investment poured into Fintech at every opportunity, but the next few years are absolutely critical. When we look at Binet & Field’s classic brand marketing piece Effectiveness in Context it’s clear that short term sales tactics by these Fintech brands won’t get them out of a hole. It’s time to double down on brand. They’ll all need a point of difference to the historic financial institutions who themselves are bolstering their tech offerings.
So who do these frustrated Fintech brands need to appeal to? Oh yes it’s marketing’s favourite buzz word generation, Gen Z, key to the future of so many companies profits. Fintech brands have historically targeted millennial audiences or ‘global citizens’ but this cohort is now growing up. They’re looking for new ways to save and are being drawn towards the perceived ‘safety’ of historic banks and financial institutions such as HSBC, Halifax, Bank of America etc. Neobanks and Investment Platforms have gone from exciting to untrustworthy in their eyes. Fintech brands simply can’t compete with the credibility of those brands because they haven’t had a 150 years of brand and customer relationship investment like an HSBC.
‘But wait!’ you say. ‘Surely the best short term solution is going after boomers with big wallets’. Yes in the short term following the money might make sense, however this generation is even less likely to switch from an HSBC to a Monzo or a Hargreaves Lansdowne to a Trading 212. It also ignores the steadily increasing income of Gen Z, specifically in comparison to their Millenial counterparts. These people are the boomers of tomorrow so start prospecting them now.
Gen Z (or ‘Generation Hustle’), are throwing caution to the wind. They’re the generation looking for new ways to earn and spend. Their quest for financial freedom was best summed up by the Gamestop saga which still burns in the background and may yet become front page news again. This cohort of young people have been the driving force behind a number of trends in finance. They’ve become retail investors trying to beat the banks at every turn; retail ownership of small to mid cap companies is now 25% on average. They’ve propagated (along with Elon Musk) the crypto frenzy of the last year with words like DOGE and HODL turning from nonsense into mainstream culture. And finally they’re defining a new generation of entrepreneurs, new business registrations jumped by 22% to 810,323 in the UK alone (Companies House, 2021), the highest increase on record.
Knowing these fresh faced entrepreneurs are looking for the future of finance either in the blockchain or meme stocks, it begs the question about how these Fintechs can build their brands around these new wants and needs to get a head start on being the financial institutions of the future?
Well they need to go back to the drawing board on their brand narrative. The reason why they exist. This story isn’t just a nice bit of comms either, it will influence everything they do as a business from products and services to company culture.
Seems like a lofty task but don’t worry I’ll give all you Fintech CMOs out there a few starters for ten. You should all consider yourselves challengers so therefore I’m going to refer to Adam Morgan’s Overthrow II rather than Margaret Mark’s Hero and the Outlaw when suggesting the archetypes they should follow.
For me there are three which stand out as brand narratives that will steal the hearts and minds of ‘Generation Hustle’:
First up is the Next Generation challenger; these brands don’t just question the market leader they question the category as a whole. Tesla didn’t ask Ford why they don’t make a greener Mustang they asked the whole industry why they’re still making petrol cars. It’s all about showing people the ‘future’ of something. In Fintech brands, this is an opportunity to embrace the blockchain, develop cryptocurrency offerings and offer payment facilitation for digital goods like NFTs. Revolut have already made strides in this space opening 300,000 new cryptocurrency wallets in a month during lockdown. The trading bonanza helped it start turning a monthly profit for the first time in three years.
Next is the People’s Champion, brands that stand up for a group of people short-served or exploited by the establishment. They offer ‘people powered’ solutions with the community’s interest at heart. Think Depop offering a community driven response to fast fashion. Fintechs looking to build their brand around this narrative should show how they provide tools, products and services which empower people to find financial freedom. Small Business solutions like loans and payment systems are the order of the day. Tide bank is already doing interesting things in this space with their ‘Rise Entrepreneur’ campaign. I’m a fan.
Finally, the Democratiser. These brands want to provide ubiquitous access to things that have only been available to an elite. They believe in taking from the few and giving to the many. They challenge elitism and champion accessibility. This is perhaps the strongest story any new wave Fintech brand can adopt. Show how they’re the antithesis of the 1%. Take on the big banks, Wall Street and the old money. Brands should dramatise how their products help you ‘beat the bankers’. They should be quicker, faster and ultimately better value than those on offer to the elite. Investment platform Robinhood built a fantastic brand around this narrative only to topple it in one fell swoop with the way they handled the Gamestop situation. Paypal’s New Money work from a few years ago is also reminiscent of the Democratiser.
Fintech brands are at a crossroads. COVID-19 has exposed many of those without robust forms of revenue and many of their brands have taken a hit as a result, mostly around perceived lack of credibility, security and trust. Brands wholesale will have to toe the line between exciting people about the possibilities of the future and reassuring them that they’re a safe pair of hands if it turns out to be, well, not so exciting.
There’s no doubt Fintech brands are here to stay but there’s going to be a mass consolidation in the coming years as market leaders reveal themselves and traditional financial institutions catch up. Those that will succeed will be the ones who signpost themselves as the financial brands for the next generation. This needs to be reflected in both their brand comms and product offerings. That’s the advice we’re giving our clients in the space. Faster. Better. More Inspiring. Now is not the time to play it safe.