Does fintech hype sell?

Originally appeared on bobsguide.

Chief executive officers, chief risk officers and increasingly, chief information officers, all claim top spot in the finserv hierarchy but how important is the role of the chief marketing officer really?

“It bothers me when I see a CMO placed higher than the CIO on the company’s ‘about’ page,” was one response from cybersecurity expert, Neil Haskins, when he laid out a step-by-step guide to hacking a bank.

Evidently, CIOs are burdened with ever-increasing responsibility – particularly in an age of breaches and data protection laws – and, without them, a finserv company would not be able to credibly sell its products due to third party security concerns.

Likewise, the role of the CMO goes far beyond ‘send this query to marketing’, ‘post that to social media’ or ‘make me a powerpoint’.

In the digital age, when a tweet can cripple the public perception of a company, the role of the CMO can equally make or break deals.

In a fintech market fast becoming saturated by agile startups, new technologies and a new informal attitude to marketing and branding, the average finserv CMO has an ever harder task.

Tom Blomfield recently told The Economist that Monzo’s marketing budget is ‘practically nothing’. There is some truth that startups in the funding series stages can enjoy a degree of momentum, particularly by inserting buzzword technologies into the company name; Online Plc famously changed its name to Online Blockchain Plc and its value grew substantially.

“I really dislike people who say ‘we’ve gone this far without any marketing,” says Amelie Arras, director of marketing at Ad Astra, a fintech marketing company.

She made the comment following an encounter she had at a conference presentation where a company’s slides claimed they hadn’t done any marketing. “I mean, are you actually joking? That is what you are doing right now at this event.”

But Arras does admit that finserv marketing has changed with the influx of start-ups. “We’re seeing more of a shift in messaging with anything corporate moving to trendier nuances and trying to act more like B2C marketing. We see Starling, TransferWise and Monzo all with their colourful card marketing who are dominating this new style, B2B and B2C.”

It is one thing to get people to notice your bright coral cards, but another thing entirely to convert it into revenue. “Monzo now needs to educate around their banking service, beyond its cards,” says Arras. “If I were Monzo’s CMO I’d make the main thrust of my strategy their app push notifications to promote new features and services, or getting articles out there on bobsguide or sending out easy sign-up current account cards in the post.”

Ultimately for Monzo as well as many challengers to the financial services, its marketing relies on changing generational attitudes to banking.

“Monzo has started with the right generation. What I really like about the bank is how personal it all is – you chat with a real person – their use of emojis breaks down that traditional grey suit banking vibe and makes the brand more approachable.”

It is that difference to traditional banking that Arras believes the challengers must flaunt.

“It’s about doing something different but relevant,” she says, “for instance, my normal card is with a Tier 1 legacy bank but I use my challenger card when it’s relevant to do so, such as going abroad and that’s because they’ve ultimately developed the product specifically for that function. But then again, I don’t use the challenger’s bank account.”

“One of the things I’d definitely do is reach out to consumers who’ve had bad experiences with legacy banks and how Monzo has approached the problem differently and write them up in video testimonials to sow on social media.”

But the future of fintech goes beyond the mainstream battle between challenger retail banks and legacy retail banks, or their B2B equivalents. A far more interesting battleground over the future of the financial industry may be the crypto crusade to disintermediate financial middlemen.

Arras is one such crusader having competed in North American and Asian Money 20/20 payments races representing bitcoin. The objective is to see which medium of exchange can get racers from city A to Money20/20’s city. This year, Arras will race from Copenhagen to Amsterdam for Money20/20 Europe again using bitcoin.

“I’m not interested in the trading of crypto but in experiencing the use case as a person; that’s why I did the bitcoin races in North America and Asia.”

But the difference in the perception of bitcoin in both continents that Arras encountered was largely down to the role of the media and price hype.

“When I did the North America race in October the price kept going up, so people were more receptive. In the US, I could offer to pay for a sandwich with a little bitcoin and the small transaction fees because the risk wasn’t really perceived.

“In Asia, they’d all heard of bitcoin because it’s big in the media, but the price had been going down (from January to March) and a lot of people had publicly lost bitcoin, which made buying things with bitcoin difficult. I spent three hours negotiating with a hotel owner to let me pay for the night in bitcoin and I ended up paying double to mitigate the risk of price fluctuation, fees etc. on his end.”

For Arras, bitcoin goes beyond the fad or the short-lived mania phase that it is currently experiencing.

“Just by principle, I’d rather keep money in cryptocurrency just because there’s no middle man. If you are educated enough about cryptocurrency you realise you have full control of your money. Some of TSB’s customers did not have access to their money, but with crypto you have access all the time. It’s like hiding a lump of cash under your bed except it’s digital.”

Related reading