How the right partnerships can help you build your brand and pave the way for success
It’s becoming ever more difficult for new financial services organisations to make a name for themselves. While the number of neobanks and challenger banks is growing at an incredible rate — the global market size was valued at over £30 billion in 2021 and it is expected to grow at a compound annual growth rate (CAGR) of 53.4% from 2022 to 2030 — the increase in competition is bad news for newcomers without a distinctive USP.
The best and most successful fintech organisations of recent years have been the ones that stood out from the crowd — think of Revolut, Wise and Mondo for example — but the success of these organisations means that the bar is now that much higher for new market entrants. If you want to be successful, then you’re going to have to come with all of your guns blazing.
There are plenty of memorable and compelling advertising campaigns in the financial services space right now but building a successful brand requires more than slick marketing. To get ahead, you’re going to need a strong network of partners.
Partnerships are the cornerstone of a successful fintech business
Fintech companies generally rely on multiple partnerships just to get their product online anyway — technology providers, payment processors, issuing banks, correspondent banks and so on. The exact blend will depend on the kind of services they offer, but in many cases these companies will also have formed some sort of relationship with pay platforms such as Apple Pay, Google Pay and so on, as well as the card scheme providers like Visa and Mastercard.
While they don’t always provide a great deal of flexibility, Banking-as-a-Service (BaaS) platforms let fintechs concentrate on building the front-end of their business — the bit that the customer sees — while leaving all the vital but obscure behind-the-scenes work to their banking partner. In many ways, this is a strong strategy. It makes sense to focus all of your resources on the customer-facing areas, where you can create real differentiation to appeal to as wide an audience as possible, rather than spend all your money on building a bulletproof back-end that the average punter wouldn’t understand anyway.
But using a single BaaS platform means that an organisation is heavily reliant on one key partnership, which isn’t necessarily the best idea. It’s better to develop a network of partners both in terms of technology providers and financial institutions. And forward-thinking fintech brands should also be looking to develop relationships beyond these sectors as well.
Creating a strong USP in financial services
Creating points of differentiation is becoming increasingly difficult as the market becomes more and more crowded. To position themselves as market leaders, fintech brands need to create a sense of exclusivity. One way of doing this is to have a premium-tier card service level for customers, bearing the unique logos of Mastercard World Elite or Visa Infinite or Platnium.
This is, of course, a lofty aspiration for any new market entrant, but by developing and nurturing partnerships with the right organisations it is by no means unrealistic. The first thing any financial service provider that wants to give customers access to these premium-tier services is to get themselves onto Visa and Mastercard’s radar. Visa and Mastercard won’t work with just anyone so they will need to meet certain criteria in terms of licensing and accreditation. They’ll also need to show that they’ve done their due diligence regarding the technology providers they use, as well as the other financial institutions that they partner with.
To this end, it is a good idea for a fintech organisation to choose partners that have direct experience of working directly with the card schemes on developing premium tier services in the past. They need to look for BIN sponsorship that can give them access to the right BIN products, and they’ll need to think about going through the process of getting their cards tokenised to access the Apple Pay, Google Pay and Samsung Pay platforms.
Taking the next step with your partnership strategy
But these are very much standard features for any premium-tier card service, and Visa and Mastercard will want to see more from organisations that want to access their exclusive branding marks. Fintech services that really want to position themselves as market leaders will have to have a much wider feature set, and this is where the partnership strategy really needs to move to the next level.
Think about the kind of things the typical customer of a premium-tier card service really wants. They may be the kind of person who travels a lot for business, so developing a partnership that grants lounge access to your customers would be very useful. Even better, fast-track airport services.
There are also a great deal of exclusive features that could be accessed through merchant offers and reward schemes, for example with a chain of five-star hotels. And then there are the payment cards themselves. While an eye-catching design is a must, the brand should look to be going even further and issuing cards made from eco-friendly materials, or even metal.
By taking these steps, fintech organisations can show that they are serious about giving their customers a premium-tier experience and put themselves in the best possible position to be granted access to Mastercard World Elite or Visa Infinite or Platinum. By building a brand around strong partnerships with well-known providers from outside of the world of financial services — and already vetted providers from within financial services — they will put themselves firmly on the path to becoming a market leader.
In summary: Partnerships will help to create market-leading services
Brand-building is essential to any business that wants to succeed in financial services. It’s not enough to offer bog standard products and services in this market; customers are faced with an incredible amount of choice. In order to stand out, companies need to position themselves as market leaders.
Developing partnerships is a key part of getting ahead in payment services — without the recognition of the major card schemes and implementations on the right payment platforms, success will be impossible. On the other hand, those players that work hard to develop their brand and nurture the right partnerships within the industry put themselves in a great position to capture the hearts and minds of customers.
Of course, doing this will take time and require a significant amount of investment. But if a brand is serious about becoming a market leader, then this is a necessary step. The rewards are there for those that are prepared to take the necessary risks.
Companies In This Post
- Quaint Oak Bank Selects Finzly to Modernize Payments and Enable its Embedded Banking Practice Read more
- Fabrick Closes 2023 With A 14.5% Revenue Increase To €54.7 Million And Integrates Subsidiary Axerve To Enhance Payment Services Efficiency Read more
- Grifin launches Adaptive Investing™ to fulfill the promise of “democratizing” investments Read more
- Lloyds Bank forges UK’s first trade digitalisation partnership with WaveBL Read more
- DKK Partners secures initial approval from the Virtual Assets Regulatory Authority of Dubai Read more