Many fintech companies may be ready for acquisition but can they say the same about their branding? Incomplete or unsuccessful brand strategies are some of the biggest detriments to fintech companies who are looking for acquisition opportunities.
Here’s why the CEO’s personal brand is an emerging fintech company’s biggest asset - if they utilize it correctly.
Fintech companies saw the highest M&A quarterly volume ever for Q1 2019, reaching a total volume of $112.1 billion USD. Staggering as that is, there are many more missed opportunities where great fintech startups fail to attract lucrative deals due to a subpar initial reception.
Fintech companies have to rely on the power of their branding to attract the right investors and public interest. Whether they plan on presenting their idea at Finovate or going through several funding rounds, that first impression is essential for establishing a good rapport. Fintechs who don’t focus on promoting a professional outward presentation, and a united brand, will ultimately set themselves up to fail.
When The Power of Branding Drags You Down
We’ve seen countless branding fails in the past, from both small businesses and big brand names, even within the fintech industry. A prime example of this is Facebook’s recent unveiling of their new cryptocurrency, Libra. A small fintech startup called Current quickly realized that Libra’s logo matched their own, and called them out on it via Twitter. The CEO of Current, Stuart Sopp, mentioned to CNBC that “This is a funny way to try and create trust in a new global financial system,” and he hit a very important point with that statement.
The fintech industry is the amalgamation of two big industries - technology and finance - and each brings its own set of problems to the table. But one of the biggest adoption barriers that all fintech companies face is the trust factor; the inherent and perceived security flaws that make people wary to trust a new system with their valuable data and money.
The aim of any fintech company is to build a strong, coherent brand that can overcome that trust barrier, and eventually (if that’s their aim) gain enough backing to become a viable target for M&A. But when something like the Libra logo situation happens, it breaks down the small headway the company has made. Some larger companies are able to weather this type of setback but that won’t work for newly emerging fintechs.
When Fintechs Do Branding Well, They Leverage Their CEO’s Brand
Fintechs who want to build a positive brand image know that they need to focus on creating a friendly, open identity that connects with people in a real way. There are more than enough examples out there of fintech leaders and marketing gurus espousing this very idea. Yet, at the same time, it’s incredibly hard to find many who are talking as passionately about the big role that personal brand impressions play, especially on social media.
In a lot of ways, fintech brands’ reputations are tied to their founder or CEO’s personal brand. According to a study by Burson-Marsteller, as much as 48% of a company’s reputation comes from the impression created by it’s CEO. Those who value building trust with the public, value their CEO’s reputations, because these lend authenticity and approachability to the brand, which in turn builds trust.
This concept is universal to every industry, and can be especially invaluable in fintech, where the industry can so quickly come across as impersonal and distant. The finance sector needs to be humanized through a user-centric approach and the easiest way to achieve that is with a strong personal brand.