Why Thought Leadership and Differentiation is Key to Fintech

I see news about Fintech almost every day. Which stocks to buy and sell. Articles discussing data security and privacy regulations. Influencers promoting different companies or services on social media. The latest and greatest news on crypto.?

Fintech is booming, especially for companies focused on B2B solutions. So if you’re a Fintech company, how do you stand out? How do you show that not only does your company offer awesome products and services, but that you are the right choice among a sea of competitors??

This is where thought leadership comes in. Thought leadership can help Fintech companies differentiate from competitors, build trustworthiness and strengthen brand awareness.?

What the research shows

We’ve already established that Fintech as an industry is big and getting bigger. Let’s put some numbers to this.?

In a Pew Research Survey, 76% of Americans say they have used PayPal, Venmo, Zelle and/or Cash App. In July 2023, public Fintech companies had a market value of $550 billion, twice as much as it had in 2019. And McKinsey research shows that the Fintech industry is expected to grow almost three times faster than the traditional banking sector between 2022 and 2028.?

B2B Fintech companies in particular are seeing huge growth. There is a higher increasing investor interest in B2B Fintech solutions compared to B2C-focused models. In fact, funding for B2B segments of Fintech companies grew more than 25% annually between 2018 and 2022 because of more demand and use of their products.??

Build trust with thought leadership

Given the trajectory of the industry, it’s critical to find ways to differentiate your Fintech organization from your competitors. Businesses have options when choosing financial technologies for their company, and there are constantly new apps and websites popping up. When picking technology, businesses are going to go with the brands that are credible and that they trust. Thought leadership can help your company establish itself as a trustworthy brand and increase your reach to get to more of your target audience.??

Trust is crucial for B2B companies, especially ones in Fintech that deal with important and sensitive information. In fact, companies that are highly trusted outperform lowly-trusted companies in market value.?

So, how do consumers and businesses view Fintech??

There seems to be some mixed feelings. 34% of people who use payment apps or sites say they have little or no confidence that the apps or sites keep personal information safe. For Americans who have never used a payment app or site, this lack of confidence increases to 80%. However, in a different report that asked about individuals’ comfort level of opening an account, Fintechs had a 79% comfort level, just a little below the 87% comfort levels for traditional banks.?

Confidence levels vary, then, and are most likely based on several different factors. But one thing’s true across the board: thought leadership helps build trust in FIntech companies and the people behind it. A 2020 study found that nearly 90% of C-suite-level decision-makers said thought leadership influences their opinion of a company.?

It’s a great way to differentiate, too. A thought leadership strategy will establish your company as a trustworthy expert and forward-thinker in the Fintech industry. There are lots of topics that your company can talk about. For example, Gen Z - the age group that makes up the biggest percentage of Fintech users - is tech savvy. They want companies that are transparent about data security, ethics and sustainability. Can you talk about any of these topics in your thought leadership??

What other topics is your company an expert on, and how can you share this with your audience?

Boost brand awareness to help build market resilience

It’s probably no surprise that Fintech is very susceptible to changes in the economy. In Q3 of 2022, corporate-backed investments in Fintech companies dropped 92% compared to Q1. During this financial stress, Fintechs had to adjust to lower valuations and less enthusiastic venture capital funding.?

Now, not everyone was impacted equally. Companies in the growth stage showed the most sensitivity to this downturn, while B2B Fintechs had more resilient funding than B2C Fintech companies. But companies were still impacted, and they are likely to continue to face challenges during economic uncertainties.?

Thought leadership builds brand awareness to help prospects find you during difficult financial times. In fact, 50% of C-suite level executives say that quality thought leadership has more impact on purchase decision-making in bad economic times than in good times. They believe thought leadership keeps brands top of mind for existing and potential clients for when they have higher budgets.

And buyers agree: 55% of decision-makers say that during an economic downturn, suppliers who offer non-essential services should produce high-quality thought leadership to win the company’s business when they have more spending power.

Fintech companies are very likely to feel the effects of economic changes - even if the effects are small. This is why growing your brand into a thought leader is important. It helps your company reduce churn and keep your brand top of mind for potential customers once they are in a better financial position.?

The bottom line? It’s an exciting time to be a B2B Fintech company. But it’s also an important time to start growing your company as a thought leader to establish your expertise and trustworthiness in the industry to rise above the competition.