Marketing strategies the fintech industry must adopt in 2023

By Ram Deshpande

It would not be an exaggeration to say that the Indian fintechs have had a significant impact on the country’s financial ecosystem. Several categories of business such as payments, insurance, personal finance, lending, trade etc. have been transformed in recent years. This has come on the back of the JAM trinity and the India stack. Fintech has 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 to transcend industry boundaries and accumulate a large number of active customers. This has also led to profitability concerns with customer acquisition costs being blamed for a hit to the bottom line. Marketing is still crucial because on the one hand we have an ever-increasing number of fintech companies creating a very competitive environment and on the other hand we have a customer base that is developing very quickly.

So, what has really changed? While the COVID-19 pandemic was certainly a major catalyst in forcing people to go online. The rapid digitization and the high level of innovation in fintech have created a digital world where customers can today do much more than just buy mobile phones or clothes. While groceries are delivered in 10 minutes, a customer can apply for a business loan online in less than 5 minutes! It is 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 technology adoption in marketing, as it has been quick to adopt digital-first- post-pandemic approaches while continuing to make money.

In FY24, I believe that fintech companies will continue their marketing efforts with the same fervor, but there will be some changes that are already visible. Here are some of the key factors that could impact fintech marketing in FY-24:

Data, data everywhere

A famous saying goes that data has overtaken oil as the most expensive resource – and in either case, if it is not mined and mined properly, it is of no use. Hundreds and thousands of data points are collected (with the customer’s consent) by fintech’s. Every transaction and every interaction with a customer adds to the data available to the fintech company. Data drives marketing in a big way! It is common to use data to determine customer segments which will then determine the adaptation and personalization of communication. This must be taken further in presenting customized products alongside communication. Thorough insights driven from data analysis should enable fintech companies to cross- or up-sell various products to their customers. The most important thing is that fintech companies must follow the regulations that are supposed to protect customers’ privacy. There are no two ways of dealing with this aspect of customer data. Marketing teams will need 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 for acquiring customers have become notorious for being very expensive. This can be true in organizations where generating leads is measured independently of the bottom line. So, a marketing team may think they’ve done a good job delivering a lower cost per lead, but for the organization, that may not be enough to justify the cumulative marketing costs. It is not enough to generate a lead; marketing today sees a customer through the purchase funnel and aims to increase funnel velocity with minimal funnel leakage to control COCA at the end. Therefore, correct and targeted communication is not limited to the top of the funnel, but also includes the middle and the bottom. With profitability as a focus, this helps marketers maintain a stronghold on marketing budgets as well.

FY24 will see more debates happening in organizations that have so far relied heavily on digital performance marketing to acquire new customers. In isolation, digital marketing can seem very expensive because business results are directly attributable. It must be understood that the bigger the brand, the easier the performance marketing. More mature organizations will balance digital performance marketing spend with brand marketing spend. Accountants may still ask marketers to justify brand marketing with business metrics, and marketers will argue a lack of causality. That debate will definitely not go away in FY24.

M for Mar-Tech

As I have said above, fintech has been at the forefront of adopting mar-tech. FY-24 will see an increase in demand from companies to seek consolidation in mar-tech, resulting in cost optimization. Brands want more from the same suite of tools – possibly entire customer journeys mapped on the same tool, tools that allow for massive content generation while maintaining frugality and community building that allow for longer periods of engagement with the customer, thus increasing LTV with Fintech’s . MarTech will also expand into newer channels of business communication, such as WhatsApp, where there is a large scope of technology-driven cost savings without compromising communication reach.

Consolidation, cooperation, unity!

FY24 will see fintech leveraging all marketing channels: digital, non-digital, ATL, BTL; pretty much anything they can lay their hands on. It will be the key to effectively consolidate and collaborate marketing channels using MarTech solutions. Marketing is ineffective if it is not present where the customer searches, reads, sees, browses and listens (or none of these gerunds!). It is important to analyze customer behavior and choose a combination of relevant marketing channels. Just because something is measurable doesn’t mean it’s always effective. Agencies will also play a decisive role in this. Their success will lie in becoming more consultative with their clients. It may not be enough to simply get an MS Excel-based marketing plan approved.

One thing I think most players in the non-fintech category have managed to achieve is to work 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 various data points and customer behaviors that help us improve our products. In FY24, a fintech that is focused on customer engagement and increasing customer lifetime value will have an easier path to profitability.

Fintech companies have carved a niche for themselves in the Indian market by delivering high value to their customers. Customers are also more demanding now that they have seen what is possible. FY24 will see a continuation of the development of fintech products. Marketing must keep pace with these developments. We will get more people to become active online customers and much more data available to adapt products and communication. At the same time, media consumption will not necessarily be digital; consequently, marketing will need an effective mix of channels that work collaboratively. Profitability will not be a distant goal, but a requirement that calls costs into question. Thus, fintech marketing will go beyond just generating leads.

No one can predict the future, but one thing is certain: Indian fintech brands will continue to be relentless in their pursuit of innovation and lean yet efficient execution in FY24. Indian fintech will hold the flag high globally!

The author is senior vice president and marketing manager at Lendingkart.

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