ALL The Numbers...in FinTech Marketing

When it comes to the use and misuse of Marketing Data, FinTech startups are some of the worst offenders. This seems completely illogical, as their ability to utilise data is what drives fintech Innovation - except in marketing.

Because in marketing, The Numbers, show what data does not.
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So let's start with what the data tells us about the fintech sector and how firms approach marketing their awesome AI powered banking, Robo Blockhain...stuff!

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1. Investors love fintech !
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I often suspect they have no clue what they are Investing in most of the time, but you can read more about that stuff in our FinTech blogs.

The scale of fintech investments over the past decade globally shows just how confident investors are in FinTech. This is especially true in the UK and London in particular, which has become a global hub for FinTech.
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• $5.7 billion invested in UK FinTech firms during the first half of 2021
• Investment was spread across 307 deals
• Average investment was for $18.6 million
• More than the total FinTech investment in 2020 ($4.3bn)

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And why are Investors so keen on FinTech?

Because there are so many indicactors of how it will change the world!

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2. Big investment does not equal big profits
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While Fintech are great at raising money and getting their name in the news, they are - so far - much less good at actually making money.

The biggest household names like Monzo, Revolut and Starling - each of which report having millions of customers and hundreds of millions in revenue - are all still losing money with Monzo reporting net losses of £115 million in 2020, up by 1% from the previous year.

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That is not to say there isn't money to be made or even that firms like Revolut won't eventually push over the hill and become profitable. But given these are the biggest and most well known FinTech firms, it indicates that the majority of less well known firms may also be struggling to balance the books.
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3. The Public is not in love with FinTech
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While every group of friends has one or two fintech evangelists who talk non-stop about crypto and their cool banking app, they are exactly that - evangelists.

And much like their religious doppelgangers, they preach the word of FinTech in pubs on every street corner across the country. They talk about how it will change the world, about the miraculous things their app does and persuade people why they should join them in the promised land.

The data shows that the average person is not convinced - at least not yet.

• 14 million UK adults now have a digital only FinTech bank
• This represents 27% of all UK adults and looks very promising
• Just over 25,000 people switched to a digital Bank in Q1 2021

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🧐 wait what....🧐

With an average of 8,000 people switching per month it would take 145 years to get 14 million customers and to the best of memory Monzo and Starling were not launched in 1876 - Lloyds of London, maybe, but not the digital banking revolution!
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Why is that?
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Well some are probably skeptical and think it all sounds too good to be true. Others are concerned about security.

But the vast majority, just don't care and want to talk about football.

So they may get a digital only FinTech bank, but it doesn't mean they have switched and really use it.

And that's the core difference between Data and what I like to call, The Numbers.

Because unlike the data innovations that drive FinTech innovation, marketing is about people. And people are more than just data

I have no doubt that the code and algorithms that 'make it go' are all very complex, ridiculously powerful and uber exciting. But you can't approach people in the same way you approach solving a problem involving emotionless, rational datasets.

That in no way means data cannot be used in marketing, in fact it should drive a marketing strategy. But it must be approached different and with the understanding that it is data, yes, but data about people - not Machines.

This for me is The Numbers and the clients we have who get that distinction are the ones that have the best results.

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What The Numbers say about FinTech marketing
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1. The rule of 10

This Number is the single best way to illustrate where most FinTech marketing goes wrong.

Amongst FinTech Banking startups, from the smallest to the most successful, only around 1 in 10 people that sign up or download the app use the product each month.

Why is that important?

Well let's step back from the data and horrendous acronym data people love - which is MAU

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💁♂YAS TIP
MAU = Monthly Active Users. The number of people who actually use a FinTech product, such as making a bank transfer at least one time in any given month

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Think about a person who has just bought a car, an iPhone or a can of coke. If they only drive, get it out of the box or take a small sip once a month you couldn't help but think maybe they regretted that purchase.

No matter how much they told you they loved the taste or waved it around at the pub, if that was the only time you ever saw them using it t you can't help but think they might have wasted their money. Or at least it wasn't all they thought it would and maybe the reality has fall short of their expectations.

Maybe they even feel they have been sold something, because of the marketing focused on young hip kids getting all the babes the moment they popped open the can and took a swig. When that didn't happen, ever, as a consumer you can't help but feel a bit disappointed.

The more you spent on it the more you will go to heaven and earth to not lose face and convince people you love it, but the slight grimace on your face each time you force down a small sip tells the true story.

It shows what the data did not.

You might have been the right demographic, it might be better and more carbonated than the brand you normally buy, and you might have hit every other key activation metric for opening it once you got home

But that doesn't mean you like it, or really want to use it and buy it again. And this is why FinTechs that raise millions in investment have,  for the most part, not yet delivered millions in profits.

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2. Paid advertising vs Organic traffic

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When you pay to advertise, you get someone's attention and they are more likely to buy whatever you are seling. But that doesn't mean they wanted it.

Organic traffic is traffic that is exponentially more likely to actually want and continue to use whatever you are selling. They have a problem, you have a solution, they find you, want you, buy you and use you.

SEO based marketing strategies often don't fit well with high growth startups led by agile product managers sprinting around the office all day trying to optimise their data.

That doesn't mean they aren't right, but a content driven SEO strategy takes time to develop and deliver results. Crucially it also relies on good content and a good product that can be tied to something people already know they want and are searching for.

Again, this is where The Numbers and pure data analysis differ in FinTech Marketing.

It is also why FinTechs spend xx million on marketing yet so many of the most well known UK FinTechs, still have just 1 in 10 customers that really truly use their product on a day to day basis.

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3. Click rates, cost per click and all the other metrics

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There are metrics and acronyms in fintech marketing than it is possible to ever use effectively or even remember sometimes. They vary slightly from channel to channel.and it is very easy to lose sight of the forest for the trees.

By over analysing every metric you can exhaust yourself and forget to ask the basic questions inherent to marketing. What am I selling, who am I selling it to and do they want to buy it!

This last one is perhaps the most crucial and often where things can go wrong.  Sometimes people don't click because what you're selling isn't very good and there is no KPI or marketing wizardry that can change that.

Unsurprisingly there is very little published data about FinTech marketing metrics - or how successful their spending on PPC and other marketing activities is. But there are a few metrics that we can use to start to paint a picture

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How often people click on ads

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• The CTR average on facebook for ads is 0.89%
• The CTR average for Financial services is 0.59% - one of the lowest (the highest is for pet related ads!)
• In comparison, for SEO the average CTR across all sectors is 2%

Website traffic

• Average volumes for financial services is 56% compared to a benchmark
• For software and IT websites it is 89% - the highest level
• FinTech is probably in between, but both are above average meaning the traffic is there

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What does it all mean?

The biggest takeway in all of this is perhaps that data simply can't show the whole picture in FinTech marketing. There are few reliable benchmarks to compare your performance against and there are a huge number of factors that go into people's choices around FinTech products that are unique. Similarly, the regulation of the sector and what is allowed in terms of marketing and adverts is much more restrictive than for advertising a fun friendly cat toy.

That doesn't mean data can't help, but at the end of the day what matters is The Numbers!