Does it feel like the finance industry is accelerating at an unprecedented rate? The pace of change for Financial Services institutions will never be as slow as it is today.
Technology is raising and resetting customer expectations at a breakneck pace. FinTech companies have burst onto the scene with new business models, innovative approaches, and solutions that are exciting consumers and rapidly taking hold:
- Rocket Loans has revolutionized the mortgage market by enabling first-time buyers to obtain full approval for a mortgage loan or refinance in just eight minutes. Quicken Loans funded $7 billion in closed loans through Rocket Mortgage in 2016.
- SoFi (short for Social Finance) targets professional millennials as an alternative to traditional banks, offering perks like investor introductions for entrepreneurs or career planning services. The company has pulled in $1.9 billion in funding since its start and processed $18 billion in loans to date.
- Square is helping to level the playing field by giving small businesses the ability to compete with their bigger rivals through easy-to-use and cheaper credit card payments processing. The company processed more than $30 billion in payments last year in the U.S., Canada and Japan.
- Ally Bank is reaching a younger, digital-native market with an online banking platform with a true mobile-first design. The simple, user-friendly interface was inspired by popular and intuitive websites like Facebook, Google and Amazon. With over one million customers, Ally has established itself as a clear leader in the space.
The number of FinTech companies has soared from around 1,000 in 2005 to over 8,000 in 2016 globally. And FinTech funding has accelerated dramatically from US$5.5 billion in total funding in 2005 to a cumulative $78.6 billion in 2016.
With little to no infrastructure to manage, far lower operating costs and no reputation to live up to (or to live down), FinTech companies are moving more nimbly than their established competitors. They have the freedom to fail fast, to focus on innovation and to go to market quickly.
The Impact on Financial Services Marketers
The tsunami of FinTech companies is causing confusion in the marketplace. Marketers at established Financial Services firms no longer truly know who they’re competing against. In the past, the field was fairly stable; now they have to be ever vigilant in monitoring the competitive landscape and nimble enough to adjust their messaging, positioning and channels.
When it comes to digital transformation, the Financial Services industry as a whole has reacted slower than industries like retail. While there has been innovation and adaptation with services like online and mobile banking, it hasn’t been at the same frenzied pace seen by other industries. But FinTech companies are stoking the fire; don’t underestimate their influence.
The retail industry should serve as a cautionary tale. There’s been a devastating miscalculation on the part of many retail leaders that innovation could wait, that staying the course would work, and that there would be time to contend with upstarts and disruptors like Netflix or Amazon. But the fates of Kodak, Polaroid, Borders, and Blockbuster are proof that there isn’t always time; that action today is critical to surviving tomorrow.
For Financial Services, change is here and it will eventually snowball across the industry just like it did for retailers. It’s not a matter of if, but when. If FinTech competitors don’t make you nervous yet, they will. Their numbers will grow, their innovations will take hold, and they will set market expectations that your customers will demand you match or exceed.
Every company must have a strategy to harness the powerful advantages of the new FinTech revolution.
Become the Disrupter
While the rise of FinTech companies is putting pressure on the entire industry, it’s also providing a window into the enormous opportunity available to all Financial Services institutions.
By implementing the right processes and innovative technology, established firms can be agile, accelerate time to market with new products and services, and quickly reach across new channels – all while consistently delivering an exceptional customer experience and bearing the burden of compliance.
A marketing operations platform gives financial services firms agility with a safety net, providing them with the ability to take the “heavy layer” of compliance into a faster moving world.
This technology can bridge the gap between the creative and practical sides of marketing by automating marketing operations so marketers can execute quality campaigns in market – on time, on plan, while ensuring full compliance.
By achieving greater agility and speed, Financial Services marketers can focus less effort and resources on worrying about compliance and more on developing innovative, compelling products that will reach more customers in new and exciting ways.
Learn how Aprimo can help your firm transform its marketing operations to compete and lead in the digital age. Go to www.aprimo.com