Banks and fintech companies serve the same function in people’s lives to a large extent, but neobanks and niche financial services are far ahead in purpose index score. In Purposeful Brands™ 2021, this is a global pattern that’s consistent across all five purpose dimensions.
Fintech companies and neobanks often provide digital service platforms built around specific user needs. It’s not surprising that they are seen as more innovative, future-proof, or even visionary than banks.
But what is surprising is that they are considered more trustworthy and responsible, even though they generally are smaller and have a much shorter history than banks.
Purpose for companies is about playing a role that makes a difference for customers, whether in B2B or B2C. It’s about being part of solving the problems customers see for themselves, society and the planet. And we know that purpose is a way to drive preference among customers.
We see opportunity for both banks and fintech companies to improve how purposeful they are:
01 Banks well positioned for changing customer expectations
02 Fintech ready to venture beyond product features
Banks are not just far behind fintech companies, they score below average on the purpose index compared to all industries. There’s plenty of opportunity to improve in how purposeful these often well-known and historic companies are for customers.
Banks are inevitably less agile than small disruptors, because they are big and experienced, but this also makes them reliable and knowledgeable. This has historically meant safety and comfort for customers, but expectations are changing. Banks now need to solve the problems customers see, whether they are personal or societal.
Banks have the resources, reach and influence to both understand customer needs and drive large-scale impact initiatives. The banks that dare to be ambitious and step into a new, more meaningful role in their customers’ lives, will see increases in preference, loyalty and business growth.
“We’ve seen a lot of banks taking responsibility during the pandemic by offering financial relief through various solutions. I think that’s a great example of how banks can contribute in ways that make big, important difference for customers. And it’s relevant for both retail and commercial banking.”
While fintech companies score well compared to banks on the purpose index, they only score slightly above average compared to all industries. So even though fintech companies are seen by customers as a lot more purposeful than banks, there’s still room for improvement.
Fintech companies generally start with customer needs instead of existing products and services. They are often rewarded with customer loyalty because they are skilled at innovating based on user needs. But in order play a truly purposeful role in customers’ lives, companies need to draw larger circles and create positive impact beyond product features.
Fintech companies that dare to take value-based initiatives that solve problems for people, society and planet, will grow into a role bigger than the service they offer and enjoy business growth as a result.
“Don’t underestimate the effect of expectations. Customers are hard on banks because they know they have the resources to contribute beyond products and services if they want to. As fintech companies grow large and influential, they to a larger extent experience the same expectations.”
Curious about what the implications could be for your business?
We work with insights-based methods to set purpose-driven business strategies for companies. We know purpose. And we know banking and finance, after having worked with numerous banks and financial service providers in the last 20 years.
So talk to us and ask what you want to know about your business and it’s future. We’ll present to you, your management team or your whole organization.
Just email us and tell us what you need. Or submit your email and we’ll get in touch.