Cashing in on the fintech opportunity
After the crash of the markets in 2008, regulation has dictated the progress and direction of the financial services sector. Regulators have kept a close eye on banks, enforcing stress tests and compliance so that customers aren’t left short changed. In this environment, the fintech market has flourished, enabling banks to meet new customer demands and comply with increasingly stringent regulations. Whether you’re looking to buy/sell bonds, process international payments, crunch data on financial companies or provide business loans, there’s now an app or an online platform that can do just that. However, it would seem that despite the innovation coming from the best and brightest startups in the sector, the potential of many of these companies is yet to be realised.
According to recent research from Boston Consulting Group, big banks are “missing out on fintech investment opportunities.” Despite the potential of the so-called Fintech Boom, startups that provide capital markets technology are only attracting a measly 4% of the overall $96bn of VC funding that has been invested into financial technology since 2000. In contrast, payments and lending are receiving the most VC investment.
This research comes just before the US-leg of Money 20/20, the world’s largest payments and financial services innovation event. Just six months ago, the European event – held in Copenhagen – covered a wide array of topics, including biometrics in financial services, mobile payments, cross-border disruption and entrepreneurship. Given this is such an important event in the fintech calendar, we took the opportunity to analyse how the media is covering the topic, whether it correlates with VC interest and what this means for our clients’ communications strategies.
Interestingly while payments as an overall subsector is a hot area for investment, there is a big difference between the media’s receptiveness to different types of payments. A look at media coverage from the year to date suggests that the term ‘card payments’ is most commonly seen on newswire sites – it’s a term that fintech companies are using to describe themselves in their corporate materials, but not necessarily one that is gaining traction with the media. In contrast, ‘mobile payments’ and ‘real-time payments’ are the current darlings of the industry, gaining the most article mentions among fintech media. Perhaps unsurprisingly, it’s ‘digital banking’ and ‘digital transformation’ getting the most traction among the business press. But what’s interesting here is how these terms are opening up new opportunities for challenger brands to become part of the conversation and further raise their profile.
This analysis is particularly insightful if we consider that the voices of UK fintech startups are not always heard as strongly as their US counterparts, particularly when it comes to international media coverage. The latest edition of the annual Forbes Fintech 50, listing the most innovative and successful companies across the sector, cited only three UK-based companies – bond trading information service Algomi; P2P currency exchange company Transferwise and international money transfer firm WorldRemit.
Many of the UK’s leading fintech companies have perfected their tech, but aren’t always making inroads with international finance companies. A great way of achieving this is through a strong integrated communications campaign that resonates with the target audience and media influencers both in the UK and internationally. Gaining the attention of major international publications is never easy, but in the world of financial services, UK innovation in this sector should be extremely notable given the respect London’s City has around the world. Keep your eyes peeled for our full report on the fintech sector, coming soon!