By Steve Ellis
In 2014, fintech unequivocally moved from being an esoteric niche within a niche into a mainstream topic. Thankyou, Bitcoin; thank you, ApplePay; thank you, disruptive startups and feisty challenger brands. Nowmy family knows what I do at work.
In making this transition,the term ‘fintech’ has been stretched to embrace many things, and this crush of new and existing participants is turning the pressure up on all fintech marketers.
Fintech no longer just refers to the solid, long-standing application and IT service providers to the financial services industries. The term now embraces a new wave of tech startups born into a mobile, social, cloud-basedworld, looking to leap over incumbent vendors with new solutions to modern banking needs.
Confusingly, it also now covers a new generation of financial services and payments providers thatare using technology platforms, channels and distribution as a competitive weapon to undermine the incumbent banks and go direct to consumers.
According to Accenture, investment in global fintechventures tripled between 2008 and 2013 from US$928 million to $2.97 billion, and is expected to double again to between $6 billion and $8 billion by 2018.And that’s just funding the startups, which are joining the fray. Elsewhere, established vendors and payments participants are readying budgets and resources to defend their territory.
This influx of interest,investment and competition has created greater need for fintech companies – both nascent startups and long-established players – to market their new products and services than ever before. The Fintech Marketing Report 2014–a Finextra Research survey sponsored by Metia Group – provides insights and guidanceon how fintech marketers can plan to effectivelyallocate their budgets, leveragetools and social networks, and find new methods tomeasure marketing effectiveness.
Complex sales process and internal procurement hurdles
Complex, multistage B2B sales processes and high-value, long-term investment commitments which require informed decision-making and carefully considered business casescan hamper marketing efforts. Thus, the tight alignment of marketing and sales functions is critical.The complexity of the sales process in fintech has held back the implementation of contemporary marketing methods, such as automated lead tracking, nurturing and attribution. Accordingly, 70% of survey respondents say the complex sales cycle either stops any ROI measurement or causes ‘significant difficulty’.
Interestingly, most fintech marketers perceive colleagues as a more significant barrier to achieving objectives than competitors. The majority, 63%, view colleagues as either a ‘definite risk’or a ‘significant threat’to bringing their fintech products and services to market, while only 37%see external factors – such as competitor campaigns, landscape shifts, or the complex relationship between investors, and financial institutions and their regulators – as barriers.
Shift toward content marketing
Content creation is now broadly embraced as amarketing priority in the sector, with 69% planning to increase their budgets in this area with plans to continue into 2015 and beyond. Finding marketers comfortable operating within the jargon of the banking and technology sectors, and with good modern marketing acumen, remains a challengein creating effective fintech content.
Social media, search and analytics willplay key roles in content marketing.An overwhelming majority of survey respondents are actively investingin earned social media activities, with 48% increasing budgets in that area, and another 43% sustaining their budgets.The need to increase investment in content syndication and publishing is less clear-cut for some marketers (41%). This may reflect the widespread misconception that great content will simply find its audience. In fact, investments in publishing, seeding and syndication are essential to maximise the value of investments in content creation.
Nearly all – 94%– of survey respondents serve multiple countries, highlighting the increased importance of a global content strategy.Some 75% of fintech marketers hold a global role, and 94% serve multiple countries.
Internal barriers to marketing success
Integration with other departments, particularly sales and IT, is considered to be a greater challenge than threats from competing brands according to 48%of respondents.For example, 22% of survey respondents report having either ‘no relationship’or an ‘ineffective relationship’with the IT departmentwithin their organisation. The lack of alignment between marketing and IT is a significant concernwhich many fintech organisations still may need to address. Planned investments in marketing technology and systems are unlikely to succeedwithout a strong relationship between marketing and IT.Successful selectionand implementation experiences depend upon an effective collaboration.
Similar dynamics are playing out between marketing and sales, with 58% of fintech marketers blaming their sales team for poor marketing ROI measurement.According to respondents, fintech vendors will invest more in marketing, tools and systems in future budget cycles, but will remain constrained in their ability to measure marketing ROI, or even to simply attribute the source of leads in their CRM system. The disconnectbetween marketing and sales is not a new concern, but the risks associated with it remain considerable and will continue to undermine efforts to capture the ROI from marketing investments.
Big focus on new customers
While 64% of fintech marketers say they give equal importance to acquiring new customers and retaining or growing their existing customer base, fewer than 3% regard retaining/growing existing customers as their main marketing priority. On the contrary, a healthy 33% regard acquiring new customers as their main priority. The practical effect of this imbalance is a shift of resources to new-customer acquisition, butit may also signal neglect of the customer experience lifecycle and reduction of churn. This focus contrasts with mainstream technology sectors, where marketersare increasingly responsible for helping sustain engagement with customers.
Success in the fintech sector will be defined by the degree to which people, processes and systems can be fully integrated. In this environment, addressing shortcomings in organisational responsibilities, conflicting objectives or cultural indifference are as critical to success as the interoperability between new marketing systems and core enterprise infrastructure.
Steve Ellis is the founder and Group CEO of global marketing agency Metia and has been a key player in helping to grow financial technology businesses for 26 years. Steve’s innovative approach to applying technology thinking to marketing problems has fueled Metia’s global thought leadership in developer relations, financial technology and the public sector. He can be found via Twitter at@steveellis or via his blog at http://www.metia.com/group/steve-ellis/
A copy of the Fintech Marketing Report 2014 can be downloaded free at http://www.metia.com/fintech-marketing-download-2014/
Methodology: A 21-question survey of Finextra Research community members was conducted.Community members who work for fintech vendors of various sizes and areas of specialisation were contacted via email and asked to participate by completing the questionnaire. Fifty-one individuals responded and completed the questionnaire. Respondents were promised that their individual responses would be anonymous. In addition to considering the responses to the survey, for comparison and context we have cross-referenced other surveys examining marketing professionals in other sectors and their use of new channels and technologies.