By Ram Deshpande
It will not be a hyperbole to say that the Indian fintech’s have had a significant impact on the country’s financial ecosystem. Multiple categories of business such as payments, insurance, personal finance, lending, trading etc. have been transformed in the last few years. This has come on the back of the JAM trinity and the India stack. Fintech’s have really made the most of the world-class infrastructure available to them. Fintech’s have also been very active in marketing themselves. Various marketing initiatives have helped fintech’s transcend industry boundaries and accumulate a huge number of active customers. This has also led to profitability concerns with customer acquisition costs being blamed for a hit on the bottom line. Marketing remains crucial because on the one hand, we have an ever-growing number of fintech companies creating a very competitive environment and on the other hand we have a customer base that is evolving very quickly.
So, what has really changed? While COVID-19 pandemic surely was a big catalyst in forcing people to go online. The rapid digitization and high level of innovation in fintech have created a digital world where customers today are able to do a lot more than simply purchase mobile handsets or clothes. While groceries are being delivered in 10 minutes, a customer can apply for a business loan online in less than 5 minutes! It’s true, financial products have experienced unprecedented growth. As a marketer belonging to a fintech company, I am proud to say that fintech – be it payments, insurance, banking, and more – is at the forefront of tech adoption in marketing as it has been quick to adopt digital-first approaches post the pandemic, while also continuing to make profits.
In FY24, I believe that fintech companies will continue with their marketing efforts with the same fervor but there will be some shifts, signs of which are already visible. Here are some of the key factors that may influence fintech marketing in FY-24:
Data, Data Everywhere
A famous saying goes that data has overtaken oil as the most expensive resource – and in both cases, if not mined and extracted properly, it’s of no use. Hundreds and thousands of data points are being collected (with customer consent) by fintech’s. Every transaction and every interaction with a customer adds to the data available for the fintech company. Data drives marketing in a big way! It is commonplace to use data to determine customer segments that would then determine customization and personalization of communication. This needs to be taken forward in pitching customized products alongside communication. Thorough insights driven from data analytics should allow fintech companies to cross-sell or upsell different products to their customers. Most importantly, fintech companies will have to stay compliant with regulations that will protect customers’ data privacy. There are no two ways about this aspect of handling customer data. Marketing teams will have to educate themselves on these regulations and also rely on their compliance counterparts for the right advice.
Reducing COCA – Every Marketer’s dream!
Low cost of customer acquisition (COCA) and high lifetime value (LTV) are the goals for all fintech as profitability is directly dependent on these two factors! COCA is driven by marketing metrics. Digital channels of acquiring customers have become notorious for being very expensive. This may be true in organizations where acquiring leads is measured independently of the bottom line. So, a marketing team may think that they have done a good job by delivering a lower cost per lead but for the organization that may not be enough to justify the cumulative marketing spends. Generating a lead is not enough; marketing today sees a customer through the purchase funnel and aims to boost the funnel velocity with minimum funnel leakage to control the COCA at the end. Therefore, right, and targeted communication is not limited to the top of the funnel but also includes the middle and bottom. With profitability as the focus, this helps marketers maintain a stronghold on marketing budgets as well.
FY24 will see more debates happening inside organizations that have hitherto relied heavily on digital performance marketing to acquire new customers. In isolation, digital marketing may seem very expensive because business outcomes can be directly attributed. It needs to be understood that the bigger the brand, the easier the performance marketing. More mature organizations will balance digital performance marketing spends with spends on brand marketing. Accountants may still ask marketers to justify brand marketing by business metrics, and marketers will argue on lack of causality. That debate will not go away in FY24 for sure.
M for Mar-Tech
As I have said above, fintech has been at the forefront of adopting mar-tech. FY-24 would see a rise in demand by companies to seek consolidation in mar-tech resulting in cost optimization. Brands would want more from the same suite of tools – possibly entire customer journeys mapped out on the same tool, tools that allow for a massive content generation while also maintaining frugality and community building that allows for longer periods of engagement with the customer, thereby increase the LTV with Fintech’s. MarTech will also expand to newer channels of business communication, such as WhatsApp, where there is a huge scope of tech-driven cost savings without compromising communication reach.
Consolidation, Collaboration, Cohesion!
FY24 will see fintech’s exploiting all channels of marketing: digital, non-digital, ATL, BTL; basically everything they can lay their hands on. It will be key to effectively consolidate and collaborate marketing channels utilizing MarTech solutions. Marketing is ineffective if it is not present where the customer is searching, reading, watching, scrolling, and listening (or none of those gerunds!). It’s important to analyze customer behavior and choose a combination of relevant marketing channels. Just because something is measurable does not mean it is always effective. Agencies will also play a crucial role in this. Their success will lie in becoming more consultative with their clients. It may not be enough to just get an MS Excel-based marketing plan approved.
One thing I believe that most players in the non-fintech category have been able to pull off is working on building communities. This cohesion of coming together is something fintech companies need to focus on in FY24. As they say in fintech, customer obsession is key – and when we think customer-first, we end up collecting different data points and customer behavior that help us improve products. In FY24, a fintech that is focused on customer engagement and increasing the lifetime value of the customer will have an easier path to profitability.
Fintech companies have carved out a niche for themselves in the Indian market by delivering high value to their customers. The customers are also more demanding now that they have seen what is possible. FY24 will see a continuation of the evolution of fintech products. Marketing has to stay in step with this evolution. We will have more people becoming active online customers and a lot more data available to customize products and communication. Simultaneously, media consumption will not necessarily be all digital; consequently, marketing will need an effective mix of channels that work in a collaborative manner. Profitability will not be a distant goal but a requirement putting costs into question. Thus, fintech marketing will go beyond just generating leads.
Nobody can foretell the future, but one thing is certain: Indian fintech brands will continue to be relentless in pursuing innovation and frugal yet effective execution in FY24. Indian fintech will keep the flag flying high globally!
The author is the senior vice president and head of marketing at Lendingkart.