Trust is the single biggest challenge for marketing in the FinTech industry. This article examines the importance of trust in FinTech and examines why traditional marketing strategies, advertising and content, are inadequate.
FinTech is something of a walking contradiction. Consumer finance is seen as slow, stable and reasonable, while technology “moves fast and breaks things”. For FinTech companies of all stages, stealing market share from traditional institutions boils down to winning the consumer’s trust.
When it comes to factors such as quality of service, fraud protection and transparency, traditional firms have a clear edge in the perception of customers. However, once customers have a positive experience with a FinTech company they switch sides, forever preferring the FinTech contender.
In terms of strategy, the implication is clear: FinTech companies must first and foremost cultivate trust. After all, if you’re going to ask someone to trust you with their life’s savings, you’d better have a good reputation.
Again, once trust is secured, it’s fairly difficult to lose (barring financial negligence or gross misconduct). The issue for FinTech CMOs, then, is to concentrate the bulk of their resources on converting (or “flipping”) consumers to their side. To achieve this, the age-old marketing mantra bears repeating: it’s not enough to just be known, you also need to be understood.
Why Advertising Fails
While FinTech companies may understand the marketing strategy needed to develop trust and brand awareness, they need to weigh these up against the costs of developing that strategy. While advertising may seem to be the obvious solution, there are two issues that limit its value as a tactic.
The first problem is the competition for marketing in the FinTech space; the cost per click of keywords in this sector is outrageously high due to heavy competition and high customer lifetime value. Therefore, scaling this kind of campaign cripples smaller companies.
The second problem circles back to trust; an advertising campaign is not enough to educate consumers of their product or business. It needs to be supplemented with a clear proposition of purpose, value and safety for the business.
Why Content Marketing Fails
Given the importance of trust and legitimacy, it is tempting for CMOs to adopt the usual content strategy. Indeed, content marketing is renown for its ability to educate consumers and establish brand legitimacy by offering informational value . FinTech is special, though, and as with advertising, two problems emerge.
The first issue is the usual problem of time. Content marketing is very much the “turtle” approach: slow to start, but yielding consistent results in time. But FinTech companies face an unusually immense pressure to grow, stemming from an unusually competitive landscape, as well as cultural issues in finance-sector VCs. As such, the typical content strategy is often too little, too late, and CMOs must find creative ways to accelerate their trust growth-curves.
The second issue is far more insidious: how can one publish content about oneself without being self-serving? You can’t, and while it’s a forgivable offense in most industries, FinTech is special. Another mantra bears repeating: “your reputation is what others think of you”.
That’s why presscast is so valuable, you can literally contribute and position your company in a press article about your industry from a media that already talks to your audience.
The end result of an effective marketing strategy in FinTech is an educated, trusting consumer. Traditional marketing methods will forever struggle to satisfy this end goal.
The challenge for marketers in FinTech is clear, if a bit paradoxical: build organic trust quickly and scalably.