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Article

It’s Now or Never for Many Fintechs and Their Comms Strategy Needs to Shift 

September 14, 2022
By Doug Myers

Fintech is deeply entrenched in our everyday lives. Mobile banking, payment apps and countless new financial tools, platforms and services make fiscal responsibility easy for even the most novice user. And this convergence of “finance” and “technology” only continues to permeate global culture, with constant chatter around bitcoin, the metaverse and data security challenges keeping a spotlight on the industry.   

But, for many fintechs, 2022 will be the first time they have experienced a market downturn. As reported by the World Economic Forum , fintechs charted a strong path during the pandemic as consumers flocked to digital solutions amidst global lockdowns. However, as the Economist reports, the industry is facing unprecedented headwinds in light of global economic and market uncertainty.  

Communicating during this period will be different than in years past. Investors, media, employees, regulators, customers all have different needs and concerns. In order to maintain positive brand awareness during this period, fintechs will need to operate from a different playbook – one that recognizes the current economic environment and the challenges, as well as opportunities, within our changed landscape. 

Below are important considerations for your company, as you navigate this economic environment. 

  • Your Company Culture: For many fintechs, the last few years have been focused on expansion and growth through customer acquisition, partnerships and the introduction of new products. While growth is always the north star, business plans will likely need to shift to reflect the realities of our economic environment. This shift will have an impact on employees and company culture. Any modification to the business strategy and its impact on employees will need to be communicated in a way that maintains the excitement of what brought employees to your company in the first place. 
  • Your Employees: On one hand we have an economy where there are two jobs for every worker, as reported by Quartz, yet we see fintechs laying off employees as reported by Jeff Kauflin at Forbes. This environment will provide concern among employees, so it will require a modified communications approach to address fears and continue to motivate and encourage employees. 
  • The Media: As we are seeing across most industries, fintech media coverage is focused on funding, layoffs, business performance, stock performance, etc. You can almost guarantee that during any media interaction, these questions will be asked. Any storytelling opportunities will need to account for these questions, and senior leaders will need to be comfortable addressing these questions. 
  • Your Customers: Fintechs have historically focused on reaching underserved communities. Unfortunately, this target consumer will be most impacted by any economic downturn. Your customers will need to know that you are here to help them through this period and will continue to provide solutions that meet their needs regardless of the current environment. 
  • Investors: As reported by Mary Ann Azevedo at TechCrunch, the fintech industry is experiencing fewer deals and larger rounds, with a preference for later stage companies. The VC industry is adapting to this new market environment and both early-stage and late-stage companies will need to modify their approaches as a result. For public companies, communication to investors and analysts will need to be sharp and concise and demonstrate what the company is doing to weather the storm and continue to demonstrate growth. 
  • Regulators: As regulators from India to the U.S. explore options to further regulate the industry to protect consumers, fintechs will need to stay a step ahead of potential regulation and the impact it may have on their business. Most business models are built on access to consumer financial data, so having a strong voice in molding public opinion will be critical. 

While there are challenges in this current economic environment, there remain strong business and consumer opportunities. According to CFSI research, 57% of U.S. consumers or approximately 138 million adults are financially unhealthy and could benefit from quality financial products. Global fintechs are playing a key role in leveling the playing field and providing access where there hasn’t been in the past. 

The role of fintechs in the current financial services ecosystem will continue. It will just require careful navigation over the coming months to show value, maintain and attract customers and strengthen brand recognition amongst the competitive set.