June 8, 2016

FinTechs And New Products

As fintech firms nip at the heels of more traditional financial services firms Pivotl had a thought provoking piece titled "Fintech First Need To Offer More Services." The central premise is that once a fintech company acquires a customer they need to cement that relationship with other, attractive products. Examples include Square, PayPal and iZettle in the payment space expanding to lending and iZettle also adding a CRM service for its small business customers.

Logically these firms can offer more products through partnerships with other firms as the banks have before them. The risk here is that they'll offer generic products rather than ones tailored to their customer niche. This risks diluting their brand.

Focus on Products or Customer?

Simply adding more products won't necessarily deepen customer relationships, persistency and profitability. It's always puzzling to see how so many banks are product silos unfocused on customer segments and their needs. If fintech companies really want to shake things up they would focus on the unique needs of different customer sets in order to deliver significant, relevant value.


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