Introduction

Marketing of financial products in neobanks has become an integral part of their daily tasks because of the increased awareness of the benefits of financial products and services to consumers. Also, the marketing has been defined as the act of persuading a potential customer to purchase a financial product, service, or service in a neobank.

Neobanks

A Neobank is a kind of digital bank without any physical branches. These are completely operated online. Consumers don’t have to be physically present at a specific location. They are usually mobile operated, leveraging technology to minimize operating costs and offer a customer-friendly interface.

Neobanks can be called fintech firms that provide digital and mobile-first financial solutions payments and money transfers, money lending, and more. The neobank tends to work as a tech-savvy decision-making model and handle cash more easily and openly. These banks gather and assess data, understand the trends, try to quantify the behavior of their customers, and then come out with predictions/results. They are cheaper, quicker, and can leverage a single network with the entire financial portfolio.

Neobanks are quick, transparent, and more reliable than megabanks, although neobanks prefer collaborating with them for financial products. Neobanks are also known as challenger banks. They have transformed banking sectors and made them appealing to millions of customers. For example, the U.S. confirmed that chime had over 11 million customers (Corander, 2021). The previous year, they had eight million customers; in response, other banking sectors are working extra hard to improve their products and services to survive the competition. They make money by using business models different from those used in banking institutions.

Financial product marketing

Financial product marketing refers to a range of marketing solutions tailored to the needs of financial services companies. Highly effective financial product marketing uses digital channels to promote new financial products and increase brand awareness.

Here are 5 strategies for financial product marketing:

Go mobile with your financial product marketing initiatives: your mobile experience should provide the same ease-of-use and functionality as your website.

Make social media an important tool: understand your target audience and post the right content on the right channel to maximize engagement.

Create educational content: simple educational content that is clear and easily understood by people who may not have prior knowledge about finances.

Invest in emerging technologies: disruptive technologies like blockchain, chatbots and artificial intelligence (AI) help financial companies reduce operational costs and gain new clients.

Bet on transparency: customers who believe your company is transparent are more likely to recommend your services or leave positive online reviews.

Marketing of financial products by neobanks

The marketing of financial products by neobanks include advertising and marketing strategies to promote financial products and services that neobanks offer to the market. The marketing of financial products and services in neobanks has increased the interest of consumers in financial products and services offered by neobanks. The increased adoption of these marketing techniques has also increased the neobank’s adoption rate of financial products and services (Zoi, 2021). Moreover, adopting marketing strategies has enabled neobanks to use various techniques to market financial products and services to consumers.

Neobank’s marketing strategies includes television advertisement, radio advertisement, newspaper advertisement, direct advertising, online advertising, sales promotion, sales promotion, direct selling, and personal selling. This have been felt through the increased interest, awareness, and patronage toward banks and products offered by neobanks.

Let’s take the example of Revolut:

Customer is King: Revolut are aiming to be very transparent and open by sharing a lot of company insights on their blog

Solving a real issue: Focus on building a state-of-art platform from the ground up with design, functionality, and speed at its core.

Unique buying experience: Provide a very distinctive and innovative product packaging.

Hassle-free onboarding process: Revolut focused on eliminating all unnecessary touch points and providing a fast connection with minimal data collection.

Turn clients into fans and salesmen: Revolut launched a merch line of branded products including t-shirts, hats, hoodies etc. to turn clients into fans.

Conclusion

In conclusion, neobanks use various marketing techniques, usually more digital-oriented in order to market their financial products and services. They use marketing strategies to develop new products, services, and strategies to improve their brand image and awareness. Furthermore, neobanks should be able to use a marketing strategy to attract new customers and maintain the loyalty of existing customers for them to be able to compete with other banks.

Financial communication in family firms

In this article, Cynthia LIN (ESSEC Business School, Global BBA, 2018-2022) presents the importance of financial communication in family firms.

Introduction

Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with actual and potential financial stakeholders such as retail and institutional investors and financial analysts. The prevailing belief is that unlisted, family-owned companies do not need to publish financial information, except for their statutory accounts. This leads us to ask to what extent this is the case.

Communication within the firm is an integral part of communication in a family, as the family is the primary unit that makes up the firm. Also, family businesses can only be operated by a direct relative. While family firms are usually successful, they are still family businesses, and therefore, the family is not likely to share the fruits of its success.

Thus, family firms need to have a clear communication strategy in place. The purpose of a family business communication strategy is to ensure that the core members of the company stay in communication. The family firm communication strategy is also crucial because each firm has different communication needs. Some may need more face-to-face communication, while others may need more written communication or phone or email communication.

Financial communication

In general, the framework that organizes the financial reporting process has several elements. The most important element of financial reporting is the content of the information. There is a natural tension between the desire of managers to provide complete information and the need to be cautious about the extent of disclosure. Historical quantitative financial data is generally not a concern, as companies are legally required to provide such data in their financial statements. Despite increasing attempts to limit companies’ discretion, the regulations still give them considerable leeway in reporting their results. Therefore, companies should go beyond the basics and provide useful supplements and interpretations.
Family businesses are generally more reluctant to disclose forward-looking information, which can help to highlight the impact of a new strategic decision on financial data, because they need to protect themselves from litigation in case, they provide ammunition for stakeholders to take legal action, or because they fear that information will leak to competitors.

Another important element that has a significant impact on financial reporting is the composition of stakeholders. Companies interact with many stakeholders, and the objective of financial communication is to inform these stakeholders about the economic situation of the company. The optimal method of communication depends on the composition of the stakeholders, although equity investors are often considered to be the main recipients of such communication.

Two other factors can potentially influence financial communication. These factors are the visibility of the company and the credibility of the management. Low visibility of the company, due to low awareness of its existence, limits the group that can be influenced by a disclosure package. Even a perfectly designed information package is ineffective if it does not reach the target group. On the other hand, a lack of credibility on the part of management can reduce the response to financial communication, even if the problems of information content and visibility have been overcome. When outsiders have confidence in management, they are much more likely to accept management’s interpretation of the company’s current situation.

Why communication is important in family firms?

Good communication is not just a matter of transmitting information between interested parties. It starts with a clear understanding of the family business’ objectives, strategies and roles, relayed through the most acceptable and effective channels to convey the desired message, and follow-up to ensure that understanding.

The family narrative, for example, is an important, relatively formal communication tool that links family history, culture, goals and strategy.

The unique characteristics of family businesses, including concentrated ownership in the hands of a controlling family and family involvement in the management or running of the business, limit the need for detailed financial disclosure. Influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and to make investment decisions. Family-controlled companies usually provide little external information, as the main investor (the family) already has this information. In addition, family shareholders generally act like entrepreneurs who want to keep their competitive advantage secret.

Family business: the case of Auchan

The Auchan holding company, for example, is an unlisted company and is heavily owned by the family. The company must regularly refinance itself on the debt markets and has a credit rating from Standard & Poor’s. Financial communication at Auchan is done regularly on a voluntary basis in order to give the financial community a better view of the company and its plans.

In general, management has a wealth of information on the company’s activities and economic situation. They must decide what information should be included in the financial communication and how to communicate it in the most transparent way to a wide range of internal and external stakeholders. In family businesses, concern for the reputation and long-term viability of the business requires particular attention to financial reporting. It is therefore worth examining whether the components of financial communication in family businesses differ from those in non-family businesses.

Conclusion

In conclusion, family businesses can benefit from a communication strategy, and family members must be made aware of the strategy. Additionally, to be effective, the communication strategy must be communicated, and family members must adopt the strategy simultaneously. Also, family firms’ communication strategies must consider the communication needs of the different family members. The information must be delivered to the right people, in the right way, at the right time, with the appropriate level of detail.

Useful resources

Ferramosca, S. and Ghio, A., 2018. Accounting choices in family firms. An Analysis of Influences and Implications. Cham: Springer International Publishing.

Campden FB (Family in Business)

About the author

The article was written in March 2022 by Cynthia LIN (ESSEC Business School, Global BBA, 2018-2022).

Financial products marketing in neobanks

Financial products marketing in neobanks

Introduction

Neobanks

Financial product marketing

Marketing of financial products by neobanks

Conclusion

Ressources

Related posts on the SimTrade blog

About the author

Financial communication in family firms

Financial communication in family firms

Introduction

Financial communication

Why communication is important in family firms?

Family business: the case of Auchan

Conclusion

Useful resources

Related posts on the SimTrade blog

About the author