Fintech start-up brands are an attractive and challenging area of conversation. Who doesn’t like to talk about brands? On the other hand, how well have fintech brands done? Digitization in fintech start-ups is focused on features, functions and cliches. People use features and functions and are sought to be persuaded by cliches. But they consume brands.
The place of the fire is complicated. The tech start-up world is mostly not comfortable with the moving target that a brand constitutes. It tends to look inwards, where the technical building happens. Chilled indoor nooks, beanbags and cubicles, Monday morning stand-ups. Start-ups are organized around engineering, delivery and hustle. Prospective customers are expensive to service and can distract the teams from coding and whiteboarding. We have rarely, if at all, seen a fintech founder who is from a branding domain. Brand value is not much talked about in an ecosystem where numbers fly around.
It might help to do a headcount of how many people in a fintech look after the fire. Then, one could look at an in-depth analysis of branding work being done in-house-not by outsourced marketing teams. That said, one cannot really blame fintechs. It is the tradition of the innovation community to build the technical product first and then look at the brand. This is logical – after all, what is a brand without a real product? And how many people are being reached out to? How much will all this cost? However, the counter challenge is in determining when the branding effort begins. Left to the end, you have a tired team just looking to get on with it, with deadlines looming for releases and reviews.
We love talking about PayPal and Stripe. Not much is said, however, about their brand salience and share of voice which were assiduously built over the years. That may be a story for insiders to tell but it is arguable that brand building was part of product development – as it should be.
This is a difficult act to pull off. It also means abandoning some project process orthodoxies (to be fair, those may not have been around when PayPal came up). Stripe does have the advantage of being a B2B player – even so, what it has achieved is significant. When it comes to consumer facing fintech brands, GCash and MPesa endure. These are not start-ups in the normal sense but category creators. That these remain top of mind after so many years is remarkable. They were also relatively well resourced very early on. Yet it is also worth noting that the fintech space in their home countries is getting crowded, which will make brand plays interesting over the next decade.
But what about neo-banks and digital banks? One can make a distinction between them and other fintech players. They come with a comparative resource advantage and mandated role which the others do not have. It is not unfair to suggest that the next generation banks have evolved past being early stage fintechs. Still, fintechs can learn by observing the emerging dynamics between them and their customers over time.
If the global economy enters uncharted waters, there will be more attention on performance. Tech stacks at the back are no longer differentiated. User interfaces are beginning to look alike. Fintech start-ups will find it increasingly challenging to grow unless they find core intrinsic values that clients or consumers can buy into and stay with. This is where brand comes in. It will become the representation and personalization of everything the start-up is about. The development of the brand has to be part of product development and deserves as much attention.
Do all fintechs need to have a great brand play? It depends. If your brand has to be recognized by your market (consumer or business) which has another choice, it assumes a lot of importance. You can also choose to remain in deep background and there are many companies like that. Their work does not need promoting and they are locked into strong contracts. But I feel a large and growing brand valuation will be more than useful.
Note-This blog represents the personal views of the author and not of the companies he is associated with in any way. He does not recommend, endorse or advise investing in companies mentioned here and this blog is not intended to solicit clients or provide investment advice of any kind.