This is why fintechs think banks don’t understand them.
Managing the adoption life cycle is the best marketing for technology
'It’s not you, it’s me’ is an awful breakup line, but it is an excellent thought to start a well-balanced business relationship with a banker. Hang in there, and I’ll explain why.
A fintech that wants to make a difference must take the extra mile to understand a bankers needs to find a bank partnership.
It’s the only way to get them to appreciate a tech solution for their business challenges. So if a bank seems not interested in your product or service, don’t think it’s because they don’t understand it. It’s more likely that you are: a) not explaining your product/service well enough or b) talking to the wrong person. To make sure you approach a bank most successfully, you have to ask yourself one crucial question:
“Will my product or service fundamentally change a critical banking process?”
Be honest when you answer this question. Of course, your product or service is unique. Otherwise, you wouldn’t work on it. But is it, in-the-end, changing the way a bank works? It’s not bad or a mistake if your work doesn’t radically change a critical process. It just means that you have to talk to another (type of) person than when it does. It all comes down to the way different types of people accept a new product or service.
Let’s dive into the good old adoption life cycle. This sociological model describes the way people adopt or accept a new product or service according to their psychological characteristics. It doesn’t matter how high tech or advanced your fintech solution is; ultimately, it is a human being that decides whether a bank wants a partnership or not. Hence the significance of these psychological insights. The adoption life cycle defines every segment: from the innovators and early adopters to the late majority and laggards, from people who get excited about new techniques to the ones that don’t like change whatsoever.
Before you know who to sell your product or service to, you must determine what personality type it matches. If your fintech solution will fundamentally change a critical banking process, it is defined as revolutionary. You’ll make a good shot at selling your product or service to a visionary type of person. But if your fintech solution enhances a banking process or ‘just’ makes it more efficient, it is an evolutionary product or service, and pragmatists (the early majority) are interested.
There is a fundamental difference between the way visionaries and pragmatists decide on a bank partnership. This is why it is essential to consider their individual buying behaviours. Visionaries are quite scarce amongst bankers. But it is the small group of visionaries that defines the banking industry. They have a dream, they want to change business models ánd they have the power to change critical processes. These are the people that see possibilities instead of problems. The scarce visionary banker-species is always actively looking for innovations, preferably revolutionary ones.
The majority of bankers can be defined as pragmatists, though. People that see problems and they are most likely the ones that solve them. Pragmatists are more or less risk-averse and want to understand the progress that can be made. They rather buy a proven product or service that market leaders endorse. This includes the implementation, scalability and readiness for the complex environment in which banks act. Consider these needs and fulfil them when you approach a pragmatist with and evolutionary fintech solution.
Whenever you think a banker doesn’t understand your product/service or values it in a way, he or she should; ask yourself whether you are talking to the right person and make sure you offer the correct information. To know that, you have to define your product or service first: is it revolutionary or evolutionary? Only then you can make sure you match your sales and engagement process to a banker’s buying behaviour.
You might also be interested in 'The 7 habits of highly effective fintech companies'
In this e-book we decided to highlight and explain each of the seven key habits that contribute to fintech success so other companies can benefit from our experience and that of our successful clients.
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