Last winter, PayPal co-founder Luke Nosek found himself seated in a small conference room, high above the Swiss Alps, shoulder to shoulder with some of the most influential fintech “luminaries” in the world. Gathered for the 2019 World Economic Forum in Davos, their conversation was largely hackneyed and rehearsed; that is, until Nosek made a startling confession:
PayPal’s initial mission in the ’90s was to “create a global currency,” independent of banks and states, that would one day come to dominate the world economy.
Later this year, echoes of these ambitions were heard worldwide as Facebook announced its own plans to create Libra, a unified global cryptocurrency. After serious backlash from world governments and media, the project was quickly deserted by partners and now remains in limbo.
Big worlds collide when technology companies attempt to shake up existing financial services and structures. But in reality, the disruption of fintech companies has not yielded a dystopian, monopolistic future, but a vibrant market that hosts hundreds of startups, from Silicon Valley “unicorns” to Wall Street research projects. They have serious potential to simplify everyday B2B and B2C transactions, and the convenience they offer to commercial players is insurmountable.
These companies also provide a unique set of challenges to marketers. Here are a few branding insights derived from the fascinating and ever-growing world of fintech.
Differentiation is Key
Stripe, which facilitates hundreds of billions of payments for online retailers and marketplaces per year, has just reached a valuation of $35 billion. Meanwhile, competitors like Checkout.com are raising hundreds of millions in VC capital, and Wall Street banks are taking notice of these challengers, investing heavily in smaller outfits. Banks including Goldman Sachs, Citi, and J.P. Morgan have participated in 24 fintech equity deals this year – looking to form strategic partnerships with startups to later profit from their investments.
In this fintech goldrush, the stakes are high and competition is stiff. Marketing needs to stand out and be original to get noticed.
In order to appeal to B2B customers and differentiate itself from competitors, ACI Speedpay — a provider of bill payment services in one of the highest-growth segments of fintech — worked with Brownstein Group on a unique campaign to win back old customers.
Through a series of direct mail stunts, the campaign painted Speedpay as a jilted lover reaching out to a former partner. Humorous love letters, chocolates, and gestures showed Speedpay’s desire to win back the client — and brought a real, physical touchpoint to the digital company, setting it apart from competitors.
This sympathetic, forward-yet-tactful approach, was a big hit. It also introduced new features and capabilities to past clients with an innovative twist on B2B marketing.
The Power of Tech Branding
A recent study found that Americans’ confidence in banks “doing the right thing” has dropped by 46% since 2008. For customers who grew up during the Great Recession in particular, trust in legacy financial institutions is dismally low.
“Many of these digital natives trust tech companies much more than banks,” says Anne Ryan, VP and Director of Brand Strategy at Brownstein Group. “But more importantly, they appreciate how seamlessly new fintech products and services integrate into their lives. When our phones are practically an extension of our bodies, then paying by text, touch, or scan brings an unprecedented level of convenience.”
Established tech companies such as Facebook, Google, and Apple have all announced “cards” and/or “wallets” to offer their users financial services — and they are banking on their established brands to encourage widespread adoption and partnerships with merchants. But as non-finance tech companies continue to rush towards the gold mine of fintech, a little caution and planning is advised.
The Need for Corporate Social Responsibility
In a rush to towards its latest financial offering, Apple has already compromised its brand reputation with Apple Card. The company’s latest venture is bearing the brunt of several investigations and accusations of discriminatory policies towards women cardholders.
Meanwhile, many consumer-facing companies such as Venmo hold massive amounts of private banking and transactional data. At a time when high-profile data breaches are commonplace, an oversight can have serious repercussions and public blowback — especially when 80% of financial app users admit to not realizing their banking credentials are shared with third parties.
In order to maintain their reputation as trustworthy and customer-centric companies, fintech players need to ensure they have cohesive strategies in place to communicate their commitments to security and fair banking practices. They also need to go further, and enact strong CSR programs to ensure their financial operations are held accountable to brand values.
The fusion of financial and tech services is inevitable, and the demand for greater digital convenience in B2B and B2C commerce will continue to drive innovation into this new decade. But as innovation speeds up and changes everything we thought we knew about tech and finance, it doesn’t hurt to ground this digital and transactional innovation with strong communications and human values.