Customer acquisition is tricky in Fintech, whether your focus is B2B or direct to market.
It’s about understanding a fast-moving industry and the people who use these services, as well as market knowledge on who is looking for your products and services.
In this blog, you will learn about:
Getting all this correct can be very rewarding. As of July 2023, publicly traded Fintechs represented a market capitalisation of $550 billion, a two-times increase from 20191. In the same period, there were more than 272 fintech unicorns, with a combined valuation of $936 billion, a sevenfold increase from 39 firms valued at $1 billion or more five years ago.”2
1 “Fintechs: A new paradigm of growth – McKinsey & Company
2 “Fintechs: A new paradigm of growth – McKinsey & Company
Fintech products and services are about using technology to make financial services more accessible, efficient, and less frustrating.
Fintech has been the new frontier in finance, but it moves backwards and forwards between disruptor to being part of the financial services ecosystem, until new disruptors influence match newly revealed market needs and understanding.
Competition for customers attention increases. It’s a crowded, noisy market.
We need to mention the funding landscape. Without income you will need to access capital, either your own, friends and families, or bootstrap until you are able to access finance. Fintech’s were experiencing challenge finding funding before the pandemic. Investors’ attitude to the sector was maturing, Scottish Mortgage Investment Trust recent decline in value (45%, despite a tested strategy of investing in the worlds growth companies was impacted by private company valuation concerns. Investors want to see that your business fundamental is sound and right for your market. They are keener on the safer later stage ventures that have shown some market penetration.
It may be that you are better able to connect, create and scale through the fintech platforms hubs, accelerators incubators and communities and attract customers or capital through the learnings and connections made there.
Whatever your business is about, your Customers are about their needs being met, even if they don’t know what the unmet need is yet.
To explain by looking at the music industry as an example.
So with Fintech and financial services. No customer wants to return to the bad old days when you can only access your cash from a queue between 09.30 and 16.00 (yes that was when you could get cash before the ATM cash machine arrived).
Some customers have not examined all their unmet needs in each part of the market they operate in. Sometimes their need is simply to have an option they consider desirable to do something that you might never use, but just might.
It’s your job to identify and anticipate the needs you will meet from your products and services and to educate prospects and customers to show your solution is the best fit for them.
Customers concern centres on trust, ease of use, meeting real needs and fulfilling wishes.
Fintech has simplified and continues to simplify online payments and investment choice, the future is more simplification throughout financial services, broadening social inclusion, privacy and Ai: fintech companies need to hit the mark on what customers actually need and want.
Understanding customer needs is just one part of the jigsaw puzzle. The bigger challenge is how fintech companies stand out and are seen by prospects as distinct from competitors. Customer acquisition strategies play a crucial role so that your firm produces and services are seen and seen as the better choice.
Innovative technologies reshape the landscape. Not so long ago blockchain, artificial intelligence, and big data took up academic research time, but now they are headline news, creating wealth, but being used too for good and bad purposes. Your products and services are about how those make your client’s life simpler, less costly and time consuming, or simply better at doing what is currently being done old school.
That’s the real “Unique Selling Point,” and that is what makes the most sense to focus on in any customer acquisition strategy.
In this blog I will look into the strategies that real fintech companies can use to attract and keep customers. We’ll look at real examples from both startups and established companies and take some practical lessons from their experiences.
When breaking into new areas of business or starting as a new player in established business lines, means evidencing to prospects that your business is the one to deal with.
You can show this by showing your prospects your evidence how their needs can be met in a more appropriate way, perhaps at a better price point, by you rather than your competitors.
One element that is peculiar to financial services, is the burden of regulation in addition to the normal day to day regulatory burdens associated with running a business.
Fintech services and products must
Much is written about collaboration, thought leadership and in depth analysis of customers unmet leads. Fintechs have to think through the regulatory framework too
We can’t emphasis enough the need for preparation. In this section we show how preparation can be showcased through different ways to link in with contacts and prospects. It is not exhaustive. All these routes are simply ways to connect and meet with decision makers
In the UK, fintech companies face a unique landscape shaped by stringent regulations. We mentioned in preparation section that customer acquisition hinges on building trust and navigating regulatory frameworks like GDPR and the financial services regulatory regime.
When developing and launching a new product or service or looking to amend an existing product, it is important to identify who your target market is and how the product or service will meet their needs, synch with their behaviours in practice and the solutions anticipate risks and issues they have identified and how you have reduced those. Understanding this helps your business monitor its customer usage and ensure that your business continues to meet the needs of customers.
Remember when making a successful client connection it is not just the end user that wants your product you have to convince but their risk and compliance teams, commercial negotiation, and contract managers you need to convince of your firms’ compatibility with them.
Once a product or service has been released to market, you should monitor it to ensure that it is working as expected either in a live environment or an artificial test environment, that customer needs can and are being met and that any potential harm to customers is minimised. Preparation makes this monitoring easier.
Your offering and connection to your partners and customers is important. It needs to be understood and articulated. Some simple categorisations:
It is necessary to market your products and services. If it is direct to consumer, then there are financial promotions regulations to be taken account of. The rules on financial promotions are in the FCA’s Handbook.
Financial promotions are not limited to adverts but can include websites, posts, and messaging services. All financial promotions and communications must be clear, fair, and not misleading, wherever they appear. They must also comply with the FCA’s detailed rules on content and presentation.
User habits
Understanding the local market needs too is imperative. It is not so long ago that banks used large scale IT systems and databases, based on mainframes. Now, many have moved to a cloud based, laptop enable remote user environment. End users more often than not have a mobile phone in their hand, and increasingly are happy to accept the risks of using their phone for financial and investment transactions.
This has enabled firms to reach into the portion of the population that had remained unbanked or in remote areas of the UK, where traditional banking systems often fall short: Fintechs are stepping in to fill the gap using technology to bring accessible financial services to remote areas by providing mobile banking options.
Since customer testimonials and case studies are some of the strongest marketing material you could ever wish to have for acquiring even more new customers, delighting your existing ones needs to be your top priority.
You need to find out how to find out the size, scope, and people within your chosen market sector. Sourcing this information comes from many places. Sometimes being at the right gatherings, conventions symposiums is enough, trade press and of course the professional internet platforms can have their uses. Often by the time an interest hits the trade press, purchases have been made. They are where requests for proposals do come through.
The ways to be prepared for an in person sales presentation so that it is not a cold call and has a high likely hood of success is a topic all to itself. Knowing who to be speaking to at which businesses is of course the most valuable information to hold.
An online presence is not really anything other than essential, especially for Fintechs. It is now used as something everyone expects to have to check up on what you are about, whether or not you are using that online presence as a shop window or interactive tool.
Digital marketing is not just about the website you have; it’s about thoughtfully connecting and profile raising with prospective customers and current customers offering something to them that they want or think they need and must have or a strategy to go exploring a range of customer needs that you can meet and the likelihood of successful sales.
Digital marketing is complementary to meeting people to reach your prospects. Digital marketing involves a mix of search engine optimisations (“SEO”), content marketing, and social media campaigns. SEO helps fintech companies rank their website higher in search results, making them more visible to those searching for solutions.
Digital marketing uses “Content marketing,” which provides value through informative blogs, research or white papers, and case studies, establishing the company as a trusted authority in their area of expertise . Social media campaigns amplify content and should engage with customers more directly, building a community around your business and the brand you develop.
By creating informative and engaging content, you can educate your audience about how your products and services solve their specific problems. It’s not just about telling prospects what you offer; it’s about thoughtfully showing how you understand and can address their challenges.
Long-form content is also great for all important Search Engine Optimization (SEO). By covering a topic comprehensively, high quality long form content pieces often rank higher in search engine results, drawing more organic traffic to a fintech company’s website.
Educational long-form content is a powerful tool for building lasting customer relationships. By offering valuable insights and information, fintech companies can help potential customers understand complex financial products and services. This educational approach not only helps in simplifying financial decisions for customers but also fosters trust and loyalty towards the brand. It might be about explain something confusing to your readers, for example tokenisation and how it benefits users, or the tax implications of investment decisions.
Search Engine Optimisation is how you increase the number of hits/visitors to your website. This happens by updating contents and links to make your website appear high on the list of results returned by a search engine. Generally, it is about making sure as many people as possible who are likely buyers know about you, your products, and services easily before they look at their competitors. It’s about providing genuinely valuable information that helps out your readers in some way and keeps them coming back to you.
Do everything in your power to find out what your ideal customers are struggling with, feeling embarrassed about not knowing, or being kept awake at night about, then write clearly and kindly about that thing.
Education done right is a gift. Give that gift as often and as generously as you can.
Just as your solution for your prospects and customer needs might involve other suppliers, collaboration with sympathetic businesses aligned to your interests creates a powerful strategy in the fintech world, this may include your prospects helping you. identifying people who know people, aligning your brand along with others enhances your reputation to open new doors to new customers. Becoming a talking point amongst those that create the mood music for your customers and prospects, enhances your brand’s impact.
These partnerships can take many forms. They range from simple connections made appearing at events, through to quite complex reselling arrangements and embedding your products into other firms’ products and services to provide an integrated service in existing platforms and sometimes it is about creating new products along with others.
These different strategies have their own complexity and the governance arrangements for them are necessary to stop bad things happening and resolving bad things swiftly when they do happen.
The key, regardless of the appropriateness of governance and legal agreements is to find partners whose customer base aligns with your fintech company’s target market, creating a win-win situation for both parties.
An excellent product alone isn’t enough.
Your marketing colleagues will create a user experience (UX) that is as important as the product in customer acquisition and retention. No one will buy your products and services unless you tell they exist in a compelling way. Fintech companies need to ensure their “customer onboarding or acquisition experience” is as compelling and straight forward as the products and services they will buy both should be user-friendly, intuitive, and provide the smoothest and least annoying experience from onboarding to daily use.
Your operations implementation and customer relations team (which may all be the same people in a start up environment), will all be seeking to establish the smoothest and least annoying experience for customers.
There are many ways to make your UX second to none, from utilisation of technology, investing in excellent engaging people at each stage of a customer engagement, sales operations and customer relationship teams and an easy-to-navigate interface, simplifying the sign-up process, and providing excellent customer support appropriate to each stage of your prospect/customers experience with you. A really positive user experience means new customers talk to their connections positively, making them advocates for your brand.
Once you have identified your target audience, your marketing is about how your products and services minimise the pain points of your customers.
To build trust and credibility, displaying that you understand your audience deeply and thinking through how to meet their needs, can be effectively done through testimonials use and case studies from early adopters on your website and social media is powerful. These real stories resonate, showing the practical benefits of your Fintech solutions in action. Sometimes you are lucky that these stories are told again and again by your promoters and customer advocates.
Detailed accounts of how your company helped solve specific challenges resonate well, giving relatable scenarios and tangible results. If you can use the actual words of your own existing customers, so much the better.
If you are at launch stage and have a waiting list it might be that you can generate interest through a referral scheme. For their app launch, they introduced a waiting list where users could move up the queue by referring friends. This creates a word of mouth referral system.
Monzo did this.
Although regulation needs to be thought about, your users and early adopters can be offered incentives to promote your services, offering a pretty generous commission for referrals on resulting new clients transacting in the way you hoped for.
This approach amplifies your reach and customer base through a network of industry professionals, through bloggers, influencers, and opinion formers. There is now a body of court decisions showing what is good and bad practice too
Coinbase did this
Thinking outside the normal marketing techniques, might involve experiential marketing strategy for launch. Do you know anyone influential, or can you use pop-up events, displaying how your products work in real-time at places people you are targeting want to be.
This approach can attract media attention and demonstrate the product’s practicality to potential customers.
Zettle did this.
We have taken a pretty deep look into customer acquisition in fintech. What stands out? It’s clear that preparation, diligence and thinking creatively to really understanding what your customers want is key.
It’s all about connecting with people in a meaningful way.
The takeaway? In the fintech world, it’s not enough to just have an excellent product. You need to reach people in ways that matter to them, use the latest tech that they use or want to use smartly, and always keep their trust and convenience in mind. Is that too simplistic an interpretation of “Consumer Duty”? That is for your customers to decideFor those in fintech looking to up their game, the next steps are clear: really, really listen to what your customers are saying, and never stop experimenting with the ways you reach out to them. Adam Smith an 18th Century economist set this out, and it is as true then as it is now.
I am a commercially focused lawyer who has worked with a full range of businesses across many industries, from startups through to FTSE 100 companies, as both in-house counsel and as consultant lawyer. I have run my own business and continue to be actively involved in non-executive directorship work.
I am about using the law for business success, good governance, good decisions, and customer satisfaction leading to sustainable growth. My core business focus is digital and other disruptive businesses, mainly in the financial services sector. My experience includes regulatory compliance, dispute resolution, legal risk, contract and commercial law, funding, supplier management (outsourcing, insourcing), financial services, pension services, investment, and other platforms, fintech, and all the other techs, community, and society.
I like to cut to the core of any issue, providing information, advice, and effective legal service solutions to product and service providers in various highly regulated environments. And to do so in a straight forward, risk-focused, and timely manner.
