Envisionit’s Associate Creative Director, Ryan Kenealy, talks about how successful fintech companies know their story needs to be less about how they understand tech and more about how they understand how people want to bank.
Tell a good story
Data probably won’t convince most people that they should try fintech products and change the way they bank. To inspire change, brands have to frame a good story and guide their audience to see themselves in it.
Recently, at a family picnic I listened to my millennial cousin explain a robo-advisor app to a skeptical uncle through chomps of potato salad. My great uncle is a churchgoing midwesterner in his 80s. He used to ride Harleys (until my aunt told him they were for kids and she had no interest in marrying a child). He grew up on a farm, and told great stories about things like popping the heads off of snakes, playing in high stakes poker games and watching an unhappy customer throw a chair through a plate glass window at a “cat house” in Gary, Indiana. My uncle is making an effort to understand millennials, but in some ways it’s similar to him having to give up his Harley. He knows he has to surrender something for the peace and harmony of the family.
The fact that someone would want a robot to reduce the risk and work of investing seemed antithetical to this man who believes that the courage to take risks paired with hard work was the only path to success. But my cousin was making a convincing argument, and for someone like me who helps fintech companies tell their stories, this is exactly the conversation I needed to hear. How can my cousin replace the no-pain, no-gain model that my uncle based his entire life on with something equally convincing? When I think of technology and whether or not it can really be transformative, I often come back to this simple idea.
It’s not just what technology can do but what people think it should do.
Up the fintech experience for consumers
It’s still a new thing for people to think of banking and finance as an experience, and that’s a challenge for fintech. Technology has an opportunity to fill huge gaps and help the underbanked attain basic services. And robo-advising tools are sophisticated and weren’t available to the average joe in America. This fits squarely within the “democratizing” or “inclusive” rallying cries of fintech. But, fintech is still changing the way we think about basic banking and what we should expect from financial services companies. Fintech brands need to show that they’re more than just experts about money; they’re experts about us and how we experience finance and how to enable us to do more.
The big banks have caught on to this experiential idea and are trying to position themselves as providers of great financial experiences. Even if this is somewhat at odds with their business model. Banks collected nearly $35B in overdraft fees in 2018. My uncle would not have a problem with this idea; he would see this as incentivizing prudent behavior. He might even see a no-fee system as a moral hazard. Whether he’s right or wrong doesn’t change the fact that getting hit with an overdraft fee is a painful experience for most people, and these fees have gotten much larger. As a business, when a nice chunk of your revenue is wrapped up in a painful experience, then it’s hard to say that your success is tied to the great experiences of your customers. And this is one of the big gaps in America where I feel fintech can and should rewrite the rules.
Go beyond the marketing hype
But let’s get back to the part where my cousin talks glowingly about his robo-investing tool because the young kid is onto something. And this something is more than just marketing hype. There’s been little academic research on fintech, which is surprising given the amount of funding it gets. But there has been some papers written and robo-investing (if designed properly) has shown some sparkling results. It turns out we humans make a few silly mistakes when we invest, and the robot could protect us.
For example, investors fall prey to what academics call “disposition effect” and what that means is we tend to sell assets that have risen in value and hold on to ones that have declined. It makes sense if you’re thinking you should always buy low and sell high, but typically an asset that’s rising continues to rise and an asset that’s falling continues to fall. The robot gets this and executes trades accordingly.
This said, if I’m creating messaging around robo-investing I probably wouldn’t start with academic concepts. I wouldn’t need to with a millennial audience. They don’t need any convincing that technology will make the better investment decision for them, but for my great uncle I may need to dive a little deeper, and this is important. While fintech is obsessed with millenials, they need to also look above that age bracket if they want to start showing profits. What I really want my great uncle to understand is what’s actually happening at this picnic. My cousin has his phone out and he’s showing off the app and how easy it makes everything. He’s using the brand to demonstrate he’s being smart about his finances and taking care of his family. These are the stories I’m trying to tell. They’re nowhere near as entertaining as the stories my great uncle tells, but hopefully they help more people find a way to make technology do more for them.