CCgroup, the fintech PR and marketing consultancy, launched research findings from ‘How to influence fintech buyers’, based on a survey of major banks and fintechs across five European markets. The report reveals that, despite the fintech and wider economic downturn, 70 per cent of European financial institutions expect to increase investment in financial technology over the next 18 months.
The report explores the current economic downturn and cost-of-living crisis’ impact on the financial technology buying landscape, offering insight into what influences banks’ and fintechs’ choice of provider. CCgroup commissioned independent research consultants Censuswide to survey 251 buying decision makers (C-level executives, VPs, and heads of departments) at major banks and fintechs across the UK, France, Germany, Spain, and Italy.
Buying landscape
Despite the challenging macroeconomic environment, fintech buyers plan to make more purchases and at higher ticket prices. There is a clear shift in focus to products and services that help both the institution and its customers navigate macroeconomic turbulence and, specifically, the cost-of-living crisis.
- Top five areas for tech purchases are insurance (25 per cent), credit (22 per cent), core banking (21 per cent), artificial intelligence and machine learning (20 per cent) and payments (19 per cent).
- €290,000 – €570,000 was the average ticket price for tech investments. This is a 300 per cent plus increase on 2020 data.
- Buyers want solutions that will boost revenue (34 per cent), allow them to more easily integrate third-party services (33 per cent) and, conversely, allow third-party services to be more easily integrated into their propositions (31 per cent).
- To help their customers through the cost-of-living crisis, buyers are particularly interested in savings products (35 per cent), credit products (35 per cent), and loans tech (33 per cent).
How to influence fintech buyers
Certain channels, content types and provider attributes have more influence on the buying decisions of banks and fintechs than others:
- Shortlist stage – Channels such as trade media, advertising and internal business analysts, and content such as analyst reports, news articles, and industry debates perform most strongly. These serve up a range of potential suppliers and have enough depth of information—but not too much—to decide whether to take through to shortlisting are most influential.
- Selection stage – As we shift from shortlisting to selection the channels and content of influence become more narrow. Once buyers have identified potential technology providers, they want to deep dive into that business to inform the final selection. Channels such as social media, search and events, and content such as analyst reports, whitepapers and opinion articles are the most influential.
- Attributes – Values and ethics (28 per cent), governance and oversight (25 per cent) and supplier reputation (24.7 per cent) lead the table as buyers seek providers who can demonstrate they are resilient and well run, with a track record they can be proud of.
- Industry analysts – Four in 10 buyers say that 25-50 per cent of their technology purchases involve industry analysts. Only two per cent of respondents said industry analysts weren’t involved at all.
- Nearly half of buyers (45 per cent) are only engaging with a supplier at the discovery or even the purchase stage.
What puts buyers off?
Buyers want to work with providers that have market momentum, that can evidence performance with company and technology information easily found online, and are reputable among media and industry analysts:
- Lack of awareness among industry analysts (31 per cent), lack of news from the supplier (29 per cent), and lack of information about the supplier online (28 per cent) are the biggest reasons buyers would not select a provider.
- The biggest obstacles to getting a purchase over the line are due diligence on the supplier (38 per cent), getting consensus across the business (36 per cent), and lack of performance data and evidence from the provider (33 per cent).
Response
“Geopolitical and macroeconomic turbulence is driving major financial institutions to buy more technology and at higher ticket prices. However, the market is crowded with thousands of suppliers vying for the attention of a small number of major buyers,” said Daniel Lowther, head of fintech at CCgroup.
“The biggest issue fintech providers face is that nearly half of buyers are only engaging with a supplier at the discovery or even the purchase stage. As a result, firms are being evaluated from afar and selection depends on their reputation and online presence. Effectively, it’s all about the shop window,” he concluded.
“To influence buyers at major European financial institutions insight is critical. Despite fintech being a $112billion industry, quantitative data on how decision makers select technology providers is lacking. This research, and the CCgroup reports that precede it, goes some way to addressing that insight gap,” said Alexandra Santos, head of emerging fintech at CCgroup.
“The purchasing landscape is evolving. Increasingly, buyers are looking for technology providers that put a major focus on values and ethics, governance and oversight, and supplier reputation over the more traditional metrics like cost, flexibility, and cutting edge tech. Purpose-driven firms with strong reputations and track records that can evidence their performance are best placed to win.”
