3 marketing challenges in the B2B Financial Services industry & their solutions
The FinTech and Financial Services sectors face unique challenges that stand in the way of marketing progress. In this piece, we’ll break down three industry-wide hurdles and how to approach them.
Last week, our VP Global Strategy, Barry Richards, GTM Strategy Director, Ashley Evans, and I attended The FinTech B2B Marketing Conference to better understand the state of marketing in the B2B FinTech and Financial Services (FS) industries and gain deeper insight into the challenges they’re facing. The good and the bad news is that it’s about what we at Transmission expected.
Image courtesy of The FinTech B2B Marketing Conference.
The B2B FinTech market is projected to grow at a 32% compound annual growth rate (CAGR) to reach $285B in annual revenues by 2030. Despite this, marketing in the FinTech and FS industries remains immature relative to their equivalent market peers in Energy and Tech. To understand why, I’ve broken down three broad challenges across both industries and how to address them with the help of FinTech B2B Marketing Conference Advisory Board member, David Beer and my fellow experts at Transmission.
Customer-centrism, hyper-personalisation, and data
The challenge
On the day, I joined a fascinating panel alongside B2B FinTech marketing leaders from Salv, Form3, Claro Wellbeing, and J.P. Morgan Payments to discuss growth marketing and demand gen strategies to fuel business growth in 2024.
The conversation centred on the need for greater personalisation and a more customer-centric approach across the buyer journey. However, both industries suffer from a data challenge in different ways. Legacy or institutional banks face regulatory compliance requirements resulting in strict legal teams that put a ‘chokehold’ on the business’ ability to leverage customer data in the same dynamic ways FinTechs do.
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The result? Data sandboxed by product, customer journeys siloed by team, and innovation slowed by an inherently risk-averse market landscape thanks to the Global Financial Crisis (GFC). Add shareholder pressure and the reputational stakes that come with the sheer size of these businesses, and you start to understand why marketing in the FS industry lacks dynamism.
FinTech businesses, on the other hand, can suffer from the challenge of having too much data. Though they benefit from the dynamism and high-risk tolerance of start-up/scale-up culture, small marketing budgets and teams often result in a lack of visibility and capability to leverage customer and audience insights best.
The solution
No matter how much data you collect, it’s only as good as your view into it. Customer data platforms (CDPs) act as central sources of truth for customer data, allowing for faster, more informed Sales and Marketing decisions that benefit the business. This begins to lay the foundation for the customer-centric, omnichannel marketing experiences the panel highlighted.
We in B2B may not have access to the same vast data sets as in B2C. However, if we centralise what first-party data we have and supplement it with things like third-party data and propensity modelling in a CDP, we can develop a single customer view that breaks down data siloes between business units to have a joined-up understanding of customers and their needs.
It’s what we do for our clients as part of our Growth Intelligence service. By making sense of clients’ first- and third-party data signals, historical campaign performance, and brand health, we create unified GTM strategies that drive sustainable long-term growth.
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Brand awareness vs. brand reputation
The challenge
Both industries suffer from brand-related challenges from opposite ends of the spectrum. At its simplest, FinTechs struggle with brand awareness in increasingly hyper-competitive and hyper-saturated marketplaces whereas legacy FS players must navigate the potential reputational risks of regulatory non-compliance in the public eye and on their brand health.
After the GFC, the FS industry underwent fundamental changes that saw greater regulation introduced and the reputations of legacy players scarred. Then, in the pandemic-era B2B marketing landscape, customer behaviour changed so drastically during the pandemic that every brand had to prioritise digital engagement and responsiveness or face irrelevance – adding a layer of market competitiveness to already complex brand marketing challenges.
The solution
Addressing these challenges comes down to brand management. For FinTechs, it’s a question of differentiation. For FS brands, it’s building a resilient brand that can withstand reputational damage.
FinTechs are already seen as more trustworthy and transparent in the digital space than their legacy rivals as they’re digital-first organisations (though recent high-profile incidents like the Wirecard scandal have shown that this reputation isn’t infallible).
That means answering the awareness question requires maintaining a level of brand marketing activity to keep them top of mind when target buyers enter the buying cycle – not when they’re in the middle of one.
Alternatively, legacy players already benefit from strong brand recognition and differentiation in the market. However, it’s a double-edged sword. The weight of reputation means one wrong move is all it takes to turn audience sentiment against you, highlighting the need for a considered approach to brand health management across brand awareness, experience, and most importantly, perception.
Legacy products and some ways forward
The challenge
Products in businesses like institutional banks are highly compartmentalised, as is the customer data attached to them. This means customers only visit a bank/FS provider’s platform if they need to do something related to the product they’ve purchased – resulting in lower dwell times and perceivably less relevant customer experiences due to regulations around recommending financial products.
Legacy players can and have created their own digital-first sub-brands to compete with FinTech competitors and increase customer engagement and conversion. However, it comes saddled with the costs of development, entering an already saturated market, and the negative perceptions attached to institutional FS brands.
The solution
We’re already seeing an uptick in established institutional FS brands buying out FinTech businesses and incorporating them into their operations. In reaching new markets by acquisition, these legacy players can tap into the FinTech brand’s technology and reputation to build trust in new market categories. For FinTechs, the upside is that they no longer need to worry about reaching new markets alone.
But not everyone can justify buying out their competitors or is lucky enough to be bought. An alternative solution could be to pair financial data with non-financial data to paint a clearer picture of your audience and customers for more relevant interactions and upsell opportunities.
For example, if you know what kind of business vehicle a customer has, the miles they drive, and the fuel type, you can get an idea of how much they’ve spent. If an electric car would be better suited for their needs, it’s much easier to position a loan for purchase if you can say how much the customer will save.
Wrapping up
The challenges facing the B2B FinTech and FS industries can seem insurmountable without the right expertise. For legacy players, it’s about balancing slow, highly risk-averse internal structures and the need for change to allow for more dynamic, data-driven marketing across the omnichannel. On the contrary, FinTechs must be able to transition from being Sales-led organisations to put marketing at the centre of their growth strategies to address the need for a strong brand.
No matter what, increasing customer relevance to create more rewarding and valuable engagements with customers will be crucial for both industries – highlighting the importance of creating a bottom-up, unified GTM strategy that addresses every step of the customer journey.
Don't know where to start with a joined-up, integrated GTM strategy? We can help. Reach out to find out what Transmission can do for you.