Australian Fintech has had its biggest ever year in 2020.
Whether it is M&A, funding, or just hype, Fintech has on one end built infrastructure and on the other provided solutions for niches.
Here are some noteworthy movements that occurred in this sector this year:
- Dubai’s World Investments invested A$433m in Xinja Bank
- ZipTel bought challenger bank Dought
- UK digital bank Revolut fully launched in Australia in August
- Atlassian co-founder Scott Farquhar’s invested $40 million in AirWallex
Last year we had 4 Neo Banks (Xinja, Volt, 86400 and Judo bank) receiving full banking license. These new banks are an addition to the already existing bank ‘Up’ which has been around since 2018 with around 200k customers.
And soon we will have some more players entering this space:
- Hay, which provided card and accounts in partnership with Macquarie bank, has applied for a license.
- DayTek is working towards a RADI (Restricted Authorised Deposit-taking Institution) license for its Infinity Neobank.
Most Neobanks offer the ability to set up several saving accounts to achieve your goals – buying a car or saving for a house deposit – with your income split as you would like across them.
With the current economic downturn and cuts in the interest rates by RBA, Neobanks have cut interest rates several times since the outbreak and this could stall their overall growth.
Multiple interest rate cuts could lower the customer’s enthusiasm for these banks. Interest rates and savings are the strongest selling points of many of these NeoBanks and with these cuts, they must look at boosting these offerings elsewhere to retain and attract customers.
Some banks are wary of rate cuts. They have taken extreme measures for e.g. Xinja stopped customers from opening new savings accounts in March 2020 as it faced pressure from RBA’s rate cuts.
In such a competitive environment how does a FinTech brand grow? What can you do with the digital advertising and growth strategy? Below are some tips on how to approach your digital growth strategy
Talk to your existing customers
When did you last write an email to your existing customers about how they felt about your brand?
Did you ask them if they were willing to be your advocates and refer customers?
Brand promoters are more likely to refer their family and friends.
In our latest project, we saw 90% of brand promoters referring 5 new customers for an existing brand which led to a revenue increase of over 10%.
Reconnect with lapsed leads
Dig out that email list customers who trialled your service and never signed up or those who were a customer and switched to another brand. These lists can be a great resource when getting your digital marketing re-started.
It can be a great help in targetting lookalike audiences too. Now is the time to leverage the relationship capital you’ve built with past customers.
Monitor trends
Industries like healthcare are thriving. Consider reaching out to their workers and employees.
Tools like Google Trends can give you insights into emerging search behaviour.
Compare the current and post COVID-19 trends, to help you pivot your digital acquisition and keyword search strategy.
Once we get to the other side of Covid-19 the world would have changed. So will the attitudes and behaviours of people.
Invest in awareness campaigns
It is more than likely that you have paused your advertising for months and still are uncertain of when to restart.
Getting back into digital marketing might be the best way to get key insights into your industry and start to test the market.
Top-of-the-funnel advertising strategies, like brand awareness campaigns, are a great way to re-engage your target market and remind them that you are still available for providing financial services.
Additionally, it will allow you to start tracking brand engagement to help make critical business decisions as and when the economy begins to rebound.
Pivot your digital strategy
In this downturn, leaders and executives have had the to time to invest in research and evaluate pivot strategies around:
- Technology pivot
- Management-initiated pivot
- Channel/Platform pivot
Volt Bank is yet to launch fully to the public. They want to assess the downturn’s impact on the financial sector. They recently launched a Volt 2.0 project that will allow its business partners to provide full-service banking and payments to their own clients.
Interesting move! Brands could leverage their customer base and provide banking services to them. Volt would make a good platform to manage the backend.
I’ll write more on different digital strategy pivots in my next post.
Summary
The 2020 economic downturn may have temporarily stalled growth for many industries.
However, the rules of engagement still have not changed.
The fintech sector is going to look different at the end of this.
In fact, most of the industries will. That doesn’t mean the businesses won’t survive; many of them will thrive after iterations.
