Financial products marketing in neobanks
In this article, Cynthia LIN (ESSEC Business School, Global BBA, 2018-2022) explains how neobanks market their financial products.
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.
Ressources
Zoi, S. (2021). FinTech and digital transformation in financial services: a new digital financial world (Master’s thesis, Πανεπιστήμιο Πειραιώς).
Corander, B. (2021). Neobanks: Challenges, Risks and Opportunities.
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▶ Samantha MARCUS Brands and marketing in the financial services sector
About the author
The article was written in March 2022 by Cynthia LIN (ESSEC Business School, Global BBA, 2018-2022).