In the past three decades, the financial industry has transformed. Innovation has skyrocketed. The uptake in new technologies means that the landscape is entirely different to even ten years ago.
While fintech businesses have been at the forefront of the digital revolution, the industry is still in its infancy. Fintech startups are often plagued with lack of capital, small teams and undeveloped business models. That’s why it’s important to look at other
industries that have stood the test of time.
In a book on cross-industry innovation, authors Ramon Vullings and Marc Heleven write that it’s “a clever way to jump-start your innovation efforts by drawing analogies and transferring approaches between contexts, beyond the borders of your own industry,
sector, area or domain”.
Fintech companies in the early stages struggle to build trust. Since the
Cambridge Analytica scandal in 2018 and new GDPR regulations in the same year, consumers are more tight-fisted with their data. Data protection is a hot topic.
While fintechs might be more trustworthy in the eyes of consumers than traditional banks, handling money is always going to raise issues. It may be especially difficult to build trust among segments of the population who are tech savvy or under 35.
Publishing the right content is a great way to do it. Playful marketing campaigns from brands like
Lego or Casper highlight the effect great content can have. Their campaigns would be inappropriate in the fintech space, but they do drive home the importance of memorable content. Robinhood, the commission
free stock investment app, recognises this and specialises in producing informative financial content for its users.
Rather than attempting to be memorable in bold ad campaigns, fintechs should be memorable because they know their stuff. We can see more examples of this in the services industry. PwC frequently publish
reports showing they have their finger on the pulse of the industry. Show off your know-how and users will flock to you.
How to compete
The finance industry can be daunting to navigate as a small business. Not only are fintech companies competing with the likes of Citi and JPMorgan, now they are also competing with other corporations expanding into the market. Amazon, for example, has attacked
fintech from every angle in an attempt to keep users in their ecosystem.
Instead of trying to compete with them, segment the market instead. Rather than targeting everyone, hone in on a specific demographic. While most fintech companies are targeting the younger demographics, you might want to split the market geographically.
One idea is to facilitate payments for local businesses. In times gone by, markets and small traders operated using primarily analogue means, but now firms offering POS methods or even transfer companies like Venmo allow card payments universally. Partnering
with big companies is nothing new in fintech, but you can reap the rewards from smaller companies too.
Andrew Nisbet, founder of catering company Nisbets, knows the importance of helping the local community. He said, “often,
the very success of our businesses goes hand in hand with the support, encouragement and hard work of our local communities”.
People want to feel as though they are giving back to their communities. It may be part of the reason why 88% of businesses in the UK are
family owned. It won’t be possible for all fintech firms to operate like this, it definitely provides food for thought.
There is a human element here that many companies in the industry miss. Look for ways to better the local area. There is a reason Africa has seen such a
fintech boom over the past few years. Mobile money is drastically improving life there. Figure out a way to do so in your local community and you will be rewarded with credibility and consumer trust.
Staying on top of trends
No one doubst the importance of staying ahead of the game in fintech. The nature of existing on the cutting edge of the finance industry ensures that. But technological improvements, regulatory changes and societal pressures mean that the industry could
be drastically different even one year from now.
If your team has its eyes an ears to the ground and is able to look outside of your regular market, then you might be surprised. Through a mix of networking, engaging with consumers and observing your competitors you may just hit on the next big thing. It seems
unfeasible, but hiring outside your industry can be beneficial too. A fresh set of eyes on a problem may give you a new perspective, as well as bring a great transfer of ideas.
Whether it’s looking at the alternative content strategy, honing in on different market segments, or staying on top of trends, fintech companies stand to learn a lot from other industries. If companies wish to solidify their position in the market, they must
pay attention to lessons wherever they appear.