Source: Yell Creative
Key operators in financial services are confident financial technology is a positive for the industry and over two-thirds believe fintech start-ups pose little threat to established players, a new survey by specialist financial services marketing agency Yell Creative reveals.
Australia’s first-ever survey of financial marketers, State of Financial Marketing 2016, found 98 per cent of marketers believe fintech is a positive, while only 32 per cent think it’s a threat.
Nigel Roberts, Managing Director of Yell, said: “While there is a thriving fintech community in Australia, we feel their impact will likely be more limited than in other global markets.
“Australia has one of the strongest established financial sectors in the world. The ‘Big 4’ banks are resisting any challenge to their market share through a strategy of buying start-ups or partnering with them well before they can truly disrupt the industry,” said Roberts.
The survey tapped into the collective insight of industry marketers, whose roles mean they are well positioned to understand the impact of the digital revolution on financial services. The Yell survey covered all sectors of the financial services industry, including retail banking, insurance, fintech, fund managers and superannuation funds.
Importantly, the survey asked marketing managers where they are focusing their investment and found a huge emphasis on digital marketing, while traditional print and TV advertising channels are becoming far less popular. Social media, surprisingly, isn’t a big priority.
“There is a clear intention to increase spending on all forms of digital marketing, including websites, display and search. The survey found 68 per cent of managers plan to increase content creation and even more on ensuring that content is promoted and discovered.
“Optimisation of on-site content is a big priority, with 79 per cent of marketers are increasing their investment here,” said Roberts.
Another surprising result is that just one in three marketing managers will increase their investment in social media management systems, with more than half the managers surveyed (55 per cent) planning to keep their spending at current levels, while 7 per cent of marketers don’t view social media as a marketing priority.
“Financial services marketers have long had concerns about how to use social media, given the risks with managing reputation and around giving general financial advice, and many remain unsure how to use social media to maximise their brands and interact with consumers," said Roberts.
Traditional advertising channels are becoming less popular. Among those marketing managers who use it, 35 per cent of respondents are planning on reducing their spend on print advertising, 36 per cent are reducing spend on TV and 21 per cent are reducing their spend on outdoor advertising as money is increasingly dedicated to digital channels.
Given the increasing importance of delivering financial services online, Roberts said it is essential for all financial services companies to be more consumer centric.
“The financial services establishment faces a real challenge to become truly customer centric. This can only be met through massive investment in data management and platforms, yet very few organisations have the resources to undertake such investment.
“In contrast, fintechs are dedicated to improving the customer experience by building systems that deliver more holistic service, giving them a significant competitive advantage. Hence our prediction that bigger organisations will inevitably swallow up fintechs,” Roberts said.
He predicts some disruption comes from niche services like peer-to-peer lender, SocietyOne.
“However, the trend indicates that these start-ups may also be bought before they get to a size where they offer a credible threat to established organisations. By contrast, the real fintech threat may come from established tech giants such as Apple, Google and Amazon and their payments systems. These organisations are so large and well funded that they cannot be acquired, could be the real threat to traditional financial services companies,” said Roberts.