Step into the world of finance, a realm veiled in mystery and filled with blue-suited men, furrowed brows, and the incessant cacophony of ringing phones and frantic shouts on the stock exchange floor. It has always been a daunting landscape, an exclusive club for the elite with its own impenetrable jargon. However, with the rapid advancement of technology, those intimidating walls are crumbling, opening the gates for the common man to dip his toe into the realm of finance, investing, and asset management. Welcome to the era of FinTech, where finance meets technology and possibilities become limitless.
FinTech is a unique and transformative industry, merging two areas that demand the utmost credibility—finance and technology. It is an industry that requires not only the trust of customers but also a commitment to transparency from the companies that operate within it. Unfortunately, many FinTech firms stumble when it comes to engaging with clients and establishing trust. Let’s explore some of the marketing mistakes that plague this fascinating industry.
1. Lack of Legitimacy: Bridging the Perception Gap Legitimacy is the crux of the issue, not just in terms of the firm’s actual legitimacy but more importantly, the perceived legitimacy by customers. In an era plagued by cybercrime, businesses are shelling out billions annually to fend off these attacks. By 2019, the cost is projected to skyrocket to a staggering $2 trillion. Simultaneously, the cyber insurance market has experienced exponential growth, doubling from $1 billion to $2.5 billion in just two years, with projections of tripling over the next five years.
Amidst this cybercrime epidemic and the crumbling trust in traditional financial institutions, FinTech firms are emerging as beacons of security and innovation. However, the problem lies in their marketing tactics. They often focus too heavily on their technology without considering what it means for their customers. While these companies may be technologically sound and trustworthy, their customers do not perceive them as such.
A better approach to addressing perceived legitimacy is to sell the implications of the technology rather than fixating on the technology itself. Customers want to understand how these advancements will benefit them before delving into the intricacies of the technology. A well-crafted marketing strategy that emphasizes the impact on their lives can illuminate the path to building trust.
2. Forging Emotional Connections: Beyond Financial Benefits Money and emotion are intrinsically intertwined. Companies must recognize that when it comes to financial matters, establishing an emotional connection with customers takes precedence over monetary advantages. While most FinTech companies excel at highlighting their monetary benefits, they often fall short in demonstrating the profound impact their technology can have on customers’ lives.
In an age of ever-increasing technological advancements, customer loyalty is diminishing. Switching from one service to another has become effortless, rendering companies forgettable. To counteract this trend, FinTech firms must mold their marketing strategies around creating a genuine emotional bond with customers. When customers feel connected to a company on an emotional level, monetary factors and competitors fade into the background.
3. Addressing Misconceptions: Corporate entities, especially those in the financial sector, have a long-standing reputation that often leaves a bitter taste in customers’ mouths. The mere mention of names like “Goldman Sachs,” “JP Morgan,” and “Deutsche Bank” can evoke a sense of mistrust and skepticism. Over the years, these giants of finance have faced numerous scandals, allegations of unethical practices, and even economic crises that have eroded public trust.
Ironically, some FinTech firms inadvertently find themselves treading in the footsteps of these corporate behemoths, unintentionally triggering customers’ deep-seated distrust and skepticism. While FinTech companies may pride themselves on disrupting the traditional financial industry and offering innovative solutions, they can inadvertently inherit the negative perceptions associated with the larger institutions they seek to challenge.
One possible explanation for this phenomenon is the notion of guilt by association. Customers, having been burnt by traditional financial institutions in the past, transfer their skepticism onto any company operating in the financial sector, regardless of its nature or business model. This blanket mistrust becomes a significant hurdle for FinTech firms looking to establish themselves as credible and trustworthy entities.
To overcome this challenge, FinTech companies must actively address these misconceptions and bridge the trust gap. Instead of adopting the “professional aloofness” often associated with large corporations, FinTech firms should aim to create a more personable and approachable brand image. By emphasizing transparency, accountability, and a customer-centric approach, these companies can demonstrate that they are different from the traditional institutions that have garnered a negative reputation.
By putting a face to the corporation, these firms can create an environment where customers feel like they are dealing with individuals rather than faceless entities. People trust people, and by incorporating increased transparency in business practices, prompt response times, and superior service, FinTech startups can effortlessly earn the trust of their target audience.
In conclusion, the marketing mistakes that plague FinTech firms revolve around the failure to establish emotional connections, address customer misconceptions, and consider perceived legitimacy. To counteract these pitfalls, FinTech companies should adopt predatory marketing strategies that humanize their brand and focus on selling the implications of their technology, rather than just its features and benefits.
The FinTech landscape is a battleground, where some will rise and others will fall. A comprehensive marketing and business strategy will be the differentiating factor that propels outstanding firms above the marketing noise. Embrace the power of FinTech, seize the opportunities, and embark on a journey that will shape the future of finance and technology. The potential is vast, and with the right approach, the possibilities are endless.
