Even amidst the harsh economic impact of the COVID pandemic, the fintech sector refuses to slow down. Investment into the UK fintech market has accelerated, reaching $4.1 billion in 2020 – more than the next five European countries combined – and the global fintech market is forecasted to reach a value of £380 billion by 2030.
With this substantial growth set to continue, the onus on start-ups and industry newcomers to soak up potential investments couldn’t be greater. This is why it’s becoming increasingly important that prospective market players look to build partnerships to define their position within the fintech sector and scale at pace.
So, how are partnerships bringing finance and technology ever closer, and what has the impact of this been? Mike Rhodes is the CEO and Founder of ConsultMyApp, shares his thoughts.
Mastering both tech & finance
Making the assumption that your in-house team and CEO have all the answers when it comes to both financial services and tech expertise has been the fault and failure of a few fintech companies over the years. Truth is that few people are able to maintain the required level of cutting-edge technical knowledge that also understand how to fully exploit it to deliver a modern fintech offering – especially when significant updates to the tech landscape, particularly in mobile, are happening nearly every month.
Thankfully, over the past few years, a more collaboration-friendly mindset has taken hold in the sector, resulting in a greater reliance on outsourcing and with it, better final products.
Bringing in third-party experts for niche, but vital, sections of the fintech build is now quickly becoming standard practice, with 33 percent of UK businesses predicted to outsource more of their operations over the next two years.
What was previously regarded as an unnecessary expense is now being seen for its true value. The ability to bring in ten, twenty or even thirty years of expertise for certain aspects of the fintech build allows for greater focus to be spent on scaling up and attracting investment. Let’s take a look at how that plays out in real life.
Spotlight on: Marketing and user experience
Emphasis on collaboration and partnerships are providing fintech organisations with the opportunity to outsource their app marketing strategy, something that might on the surface appear easy enough to implement in-house, but is actually very complex. With app-marketing consultation, fintech’s can guarantee that their strategy for user experience, engagement and retention is industry leading and coming from a position of expertise.
Take, for example, ConsultMyApp’s work with the business-orientated banking app, Tide. The company was looking to significantly increase the acquisition of organic customers whilst simultaneously bringing down the cost-per-acquisition of new users from paid channels. Greater investment into app visibility and app store optimisation meant that Tide’s organic installs went up by 140 percent in just three months, and the cost-per-acquisition reduced by 55 percent on their key channels.
This is just one example of how greater collaboration can achieve results in a highly competitive industry, where timing can be the make or break. This approach can be replicated across other verticals depending on where you need resources. For example, Outsourced Product Development (OPD) for your design and product building expertise and Business Process Outsourcing for quicker product launch and overall quicker coverage, to name a few.
Refashioning the banking sector
It’s safe to say that open banking (by which we mean specifically app-based banking) has caught established institutions off guard. App-based challenger banks such as Monzo, Starling and Tide have revolutionised how customers interact with their finances, as well as altered their expectations.
To put it into context, by 2022 open banking in the UK is expected to generate more than $9 billion of revenue opportunities for financial service providers – and over 10 million Britons are expected to participate.
As a result, traditional banking institutions need to modernise their offerings if they are to compete within the digital space. Fostering partnerships with combined tech & marketing firms is one way they can equip themselves with the required expertise. For example, Lloyds Bank partnered with Publicis Sapient to transform their user experience and more closely reflect what open banking leaders were doing in the space, with the aim of evolving the customer journey in line with their specific needs.
With the use of fintech apps up 61 percent year-on-year since the start of the pandemic, and with a further 15 fintech’s predicted to IPO this year, the market has never been more competitive. Amid this backdrop, the era of a close-minded ‘overnight expertise’ approach to fintech building has quickly become outdated and is no longer sufficient if a company wants to become an industry leader within this space.
Now, modern fintech’s are open to collaborating with external consultants and experts in their respective fields to combine the worlds of technology, marketing and customer experience – specific functions which are seldom connected in traditional in-house teams, but are delivered as a joined-up experience from a growing number of mobile-specific agencies. Ultimately, the industry is better for it, benefitting from greater growth, retention & engagement as well as the associated increase in outside investment for the sector.