Founders of SkyParlour, Kimberley Waldron and Angela Yore, wrote for Payment Expert on why the fintech industry must focus on sustainability as it seeks to recover from a period of turbulence.
I think we can all agree that a global crisis hasn’t been good for much – however, it has put certain things in perspective. People across the world are questioning their life choices, making adjustments to spend more time with their loved ones, and industries, including fintech, are rightly taking stock of what they have and tentatively putting growth plans in place.
The fact is every industry has been touched by this crisis in one way or another, and the fintech industry is no exception. However, while the industry experienced a steep decline in investment in the second quarter of 2020 – 30% lower than the opening quarter – it bounced back dramatically in Q3, taking 1.8bn in investment.
So, if this year has taught the fintech industry anything, it’s that it is, essentially, a sustainable industry. However, the stark reality is that marrying sustainability with profitability is a much bigger challenge in itself. Because not only do fintech businesses have to survive, but they need to be reliable enough to go on to thrive.
And of course, forming a cohesion between all these factors is a careful balance at the best of times, but identifying how to do this, delivering on that promise, and then communicating about it effectively has been the real challenge for fintech businesses at all stages of development during the COVID-19 crisis.
So, what can we learn from the companies who managed to do this effectively? Well, it’s interesting to note that many of the fintechs that were recipients of the investment poured back into the industry in Q3 were those who made the customer, or end user, the hero of their story. For example, Starling created their ‘Connected Card’ for consumers who were self-isolating – a second card that customers can connect to their existing account and give to anyone they trust to pay for groceries and other essential items on their behalf.
As a result, the fintech industry has seen a dramatic shift thanks to this sudden race to demonstrate social responsibility and corporate citizenship. If fintech businesses keep it up, the whole world is likely to benefit, with fintech having the power and the capabilities to tackle issues such as financial and digital inclusion. And with a cashless society rising over the horizon, while nearly one third of adults – 1.7 billion people – remain unbanked, these issues have never been more pressing.
These changes demand more accountability from businesses to make good on their promises, and especially to justify the high levels of investment still entering the market.
So, it seems that the global fintech market has not just survived the crisis but has used it as an opportunity for self-reflection. Alongside this, open discussions about creating long-term sustainable business models – supported by profitability, not just by external investment – are becoming more common.
And this has only been compounded by the fact that while some high profile fintechs have grown quickly, they have struggled to prove their long-term sustainability during this time, begging the question – is slow and stable more likely to win the race?
In response to this, fintech businesses at all stages need to rethink what and how they communicate, especially to attract the right level of investment. Because ultimately, communication for communication’s sake is very little use. Rather, fintechs need to make themselves heard to establish why they are here for the long haul.
And that’s why SkyParlour is expanding to meet the demand for a more nuanced form of communication, as in an industry where disruptors are arising to challenge the challengers, sustainability is now indicated by the uniqueness of your proposition. After all, as this article by Innovate Finance stated: “Transformative innovation relies on collaboration, the sharing of ideas and coming together for the greater good.”
But the fact is, none of this means anything without an effective PR and marketing strategy in place to represent your business to the world, giving you the opportunity to communicate your mission and values to an investor-driven industry. With this in mind, SkyParlour has established two new divisions to both advise and support the fintech market. These are made up of SkyParlour Started which is a PR and marketing programme designed for world-changing tech start-ups to help them communicate their proposition, purpose, and values, in order to get to the vital next stage of funding, product development, organic growth, or stakeholder engagement.
And SkyParlour Consult, which will work with both scale-ups and scale-outs in mind – to provide scale-ups with the understanding to weave their purpose into their comms strategy, and help scale-outs identify their destination amidst a wealth of options, with a marketing strategy to help get them there.
Fintech is on a truly exciting upward curve, but it’s not enough to ride the wave – fintechs with the long term in mind must make their own waves. The direct voice of the company and its leaders should be heard. In particular fintechs should be communicating openly and transparently, sharing information that will ultimately help the industry, and the millions of consumers and businesses it serves, move forward.
So, to find out more about SkyParlour visit: www.skyparlour.com