International FinTech startups are looking to the United States as a vast consumer and business market for their applications and services. Despite the difficulties posed by a dual regulatory system, in which multiple federal regulators join agencies in all 50 states, the wealth and size of the market beckons.
The U.S. stands ready as well, calling on international companies “to take advantage of its creative, competitive, and comprehensive financial services sector. The industry offers the greatest array of financial instruments and products to allow consumer to manage risk, create wealth, and meet financial needs,” according to SelectUSA, a U.S. Dept. of Commerce program designed to attract international financial-services firms to the United States.
That’s all well and good: great expectations for everyone. But how do you best market and ultimately sell your beautifully tuned, digitally adept product, application, or service? Marketing and sales approaches include the following broad categories, each of which is illustrated by one of the five startups profiled below:
- Direct sales
- Bank marketplace
- White-label sales
- Direct application marketing
- Social and community marketing
- Developer marketing
These approaches overlap and are not mutually exclusive. Most firms use more than one; any good marketing and sales manager deploys several approaches designed to gain the most sales and market share for the budget of cash and time available.
Verrency’s primary clients today are in Asia and Australia, but the firm has its sights set on United States financial institutions. “The United States is a key market for Verrency,” says Verrency Founder and CEO David Link, “not only for financial institutions but also for our ability to provide FinTech startups with a way to make their services available to U.S. banks.”
The company is betting that its white-label API-based payments platform and marketplace will appeal to card issuers, merchant issuers, and payments processors seeking less expensive and more flexible payment-product options.
The platform’s key is its ability to create products – using either pre-built services, FinTech marketplace services, or internal bank-built services – through one connection without replacing an issuer’s existing infrastructure. The bank can enable or disable any product, such as a loyalty or health-savings card, without the expense and hassle of issuing a new piece of plastic for each product. See the Verrency profile below for details.
In using the direct sales approach, the Australian-headquartered startup, founded in 2016, is pursuing what could be viewed as an expensive marketing and sales approach to enter the United States. Yet in an industry where few if any financial institutions will consider even a proof-of-concept with a company that does not have a physical presence in the country, and with a long-term outlook in mind, the direct-sales approach makes sense. The primary expense is hiring an experienced in-country executive, product, and sales team, as Verrency has been doing.
Verrency also exhibits at trade shows to gain visibility, access to potential customers, and media exposure. The firm is exhibiting at Money20/20 Asia, March 13 -15, in Singapore. FinTech Rising is a Money20/20 Asia media partner.
At the same time, Verrency is working with FinTech startups and providing a way for them to make their apps and services available to U.S. banks. The firm has begun to collect the best wallets, point-of-sale, personal-financial management, financial education, and other services on its platform so that banks can “flip the switch” and make a service available to themselves or their customers.
“We are a believer in helping FinTechs,” Link says. “We want to connect them as we go to banks. So they have a distribution channel, and the bank has pre-integrated choices.”
The big marketing idea here is the “bank as a platform,” described by Ron Shevlin in The Platformification of Banking. “It’s a new plug-and-play business model that enables buyers and sellers to connect,” he said in a presentation at the NextMoney conference last September. “You’re a magnet, a matchmaker, and toolkit to enable the integration of buyers and sellers on your platform.” Shevlin directs research at Cornerstone Advisors, a banking consultancy based in Scottsdale, AZ.
Limitless, a wealth and personal financial management startup based in Amsterdam, joined the Temenos marketplace last year. As co-founder Sara Koslinksa prepares for Limitless to enter the U.S. market, she’s focused more on white-labeling her firm’s application.
“Limitless has gained traction in the European market. We are ready to partner with U.S.-based asset managers, insurance providers, and banks to help them engage with millennials and provide data they can use in cross-selling financial products,” she says.
The white-label approach makes sense for financial institutions because they can get access to technology without developing it themselves and generally at a lower cost than buying a custom solution, even if it means giving up some features. Startups, on the other hand, are relieved of the daunting and expensive task of selling directly to enough consumers to make an application pay, exactly what a retail-consumer application like Limitless would need to do.
Limitless has developed a goals-based, microinvestment app for financial institutions that is targeted to millennials. Through transaction-based automatic transfers, users can see their savings grow and see the impact of financial planning. See the profile for details.
The idea behind the while-label approach is to drive consumer adoption within a financial institution’s customer base, helping retain customers while gaining user data from Limitless to inform their own marketing strategies. Limitless data can tell a bank which customers may be ready for low-cost mortgages and which to avoid. “We are marketing the service so that financial institutions pay for it, not the consumers,” says Ka Lim, the firm’s other co-founder.
Social and Community Marketing
Firms with a social mission highlight that as part of their value proposition in their marketing. They are also more geared toward targeting specific communities. Both approaches require a distinctly authentic voice—it’s far easier to market with a mission and to a community when you promote the mission and participate in the community.
Digital wallet app designer ReAble is targeting a highly underserved population, necessitating a community approach. ReAble is a global outfit, with personnel working through the EMEA and headquarters in the United States, and is varying its financial approach to fit the region’s economics. In North America and Europe, the aim is more commercial. In developing nations, the aim is social.
ReAble is a digital wallet app designed for people with special needs including reading comprehension, dexterity, and visual impairments. The assistive app uses a customized interface to guide users through the real-time cash purchase process, including which bills to use and making sure they receive the correct change. See the profile for details.
It’s a difficult approach. “You cannot push yourself into a community. You have to build a community around your brand, values, and company,” explains co-founder Emile Saway.
That’s easier for ReAble, given the motivation behind the company. “My younger brother has Autism and my co-founder Paul is legally blind, which is the motivation that drove us to use technology with the goal of the full inclusion of the differently abled,” Saway says.
The company, like many startups, also has tapped into the community of financial institutions and venture accelerators looking for talented FinTech firms. ReAble has worked with Techstars and Barclays in South Africa and partnerships with MetLife.
Direct Application Marketing
One of the more difficult yet technically easiest-to-execute approaches to FinTech marketing involves creating a consumer-oriented application or website and getting it directly in the hands of the right people. Garnering downloads from an app store or generating traffic to a website requires a substantial investment, whether it’s in the cost of digital advertising, public relations expertise, or simply the time it takes to promote directly.
In most cases it’s difficult to get the kinds of numbers required to build healthy revenue, especially if advertising is the means of monetizing the business. It’s a necessary evil in any case.
If you want an idea of what it can take, read about the U.S. national consumer campaign, “This is How Money Moves,” running for the Zelle person-to-person payment app. It includes transit and ATM advertising, in addition to beautifully produced TV and YouTube videos. That’s how you get millions of consumers to use your app. The rest of us do what we can.
Even so, it’s the primary marketing method used by startups. It’s the easiest to do on your own, conserving cash at the expense of time. Trivial, a site designed as a resource for token information, uses direct marketing as its initial approach to global FinTech markets.
“Trivial helps us navigate the token jungle,” according to Trivial co-founder and CEO Katarzyna Kaminska. 2017 was flush with initial coin offerings (ICOs). The Trivial team set out to create a resource that token holders and the general public could use to determine if certain tokens are worth their investment. See the Trivial profile for details.
“Do your research,” Kaminska recommends. “See if it makes sense and try to understand the idea. Maybe you’ll find tokens in areas that you’re passionate about or an expert in, like sports or gaming.”
A variation on social and community marketing, developer marketing targets software developers directly. If developers love and adopt your technology, either because it’s easy, more efficient, or simply cool, then you’ll gain a foothold for greater market share.
It’s appropriate for a firm that places emphasis on the efficiency of its technologies or new solutions to difficult technical problems.
As a case in point, TrustNote founder Jeff Zhou grew frustrated over the inefficiencies of existing blockchain technology, so he developed his own. Now TrustNote.org is working to build a worldwide network of developers, along with products that require blockchain technology, to make its new blockchain network into a worldwide, open-source developer community. See the TrustNote profile for details.
While working on an IOT development project, Zhou discovered “serious issues with scalability and high transaction fees. “These issues prevent mass adoption of blockchain technology. So what I’m trying to do is make a distributed ledger system that transacts much faster, with higher-throughput, and greater accessibility,” Zhou says.
One part of the marketing strategy is to store the code on the open-source GitHub code repository, where other developers can find, use, and contribute to it. In the first half of 2018, TrustNote plans to disclose the smart contracts component to encourage further collaboration by the developer community and drive adoption.
The U.S. may be an appealing market because of its size and wealth, but all of the companies profiled below see FinTech as a global opportunity.
As TrustNote’s Zhou puts it, “FinTech makes the world more connected. It forces the regulators to work together to exchange concerns and figure out how to improve innovation and keep the market fair.”
Verrency is a global payments management service used by card issues to deliver advanced payment options for card issuers, merchant issuers and processors through their existing payment systems. This Australian company expanded its Innovation-as-a-Service platform into the US market this year, opening an office in San Francisco.
The company offers a scheme-agnostic, white-label, “payments-innovation-as-a-service.” It features a curated-API platform and fintech marketplace that helps card issuers acquire new customers and increase their share-of-wallet of existing customers.
What sets Verrency apart is its product flexibility combined with significantly increased security, control, and IoT connectivity. Verrency works behind the scenes, enabling everything from second-generation payments controls, to aggregation to loyalty-rewards spend, to digital-currency spend, all without requiring change to existing payments rails, connections, or point-of-sale terminals.
In the past year, the company also opened offices in London and has plans to open an office in Singapore.
Last November, to support updates, deployment, and operations of its technology, Verrency began a long-term partnership with Iliad Solutions for automated, continuous testing of the Verrency platform.
In January, Verrency announced a partnership with UnionPay International providing services through UnionPay’s UPI Wallet to over 1,000 institutions worldwide.
Limitless has developed a goals-based, microinvestment app for financial institutions that is targeted to millennials. Through transaction-based automatic transfers, users can see their savings grow and see the impact of financial planning.
For each debit-card transaction a customer makes, a percentage is securely moved into their savings account. Unlike other savings apps, the percentage is scaled based on the size of the transaction (2-20%), providing for a meaningful contribution for even the smallest transactions.
As co-founder Ka Lim acknowledges, “There is a lot to be said for the amount of runway young people have to account for market corrections. When millennials start investing early, they have enough time to ride it out, to be in and stay in over the term.”
The company’s goal is to provide financial institutions with the tools needed to empower young people to invest in their savings and their future. With Limitless, customers can start with small savings goals. Then, as their investments grow, they begin longer-term savings with low-cost, ETF-based funds. Customers can see their savings goals met and see the impact of this accomplishment on their overall financial health over time.
Late last year, Limitless joined the Temenos MarketPlace as a digital engagement technology.
Limitless has raised more than $180,000 from Angel investors and a large European bank and currently has a nearly $70,000 Seed funding round open to raise additional funds.
This Amsterdam-based company is growing quickly, expanding throughout Europe with its sights set on entry to the U.S. market. Limitless is in the early stages of coordinating pilots in the United States, with plans to have a pilot running in the second half of 2018.
ReAble is a digital wallet app designed for people with special needs including reading comprehension, dexterity, and visual impairments. The assistive app uses a customized interface to guide users through the real-time cash purchase process, including which bills to use and making sure they receive the correct change. ReAble provides insight into spending, secure transaction monitoring, and education. This gives users independence and financial inclusion.
“We augment cash transactions on the phone. The ReAble wallet is a proxy for what the user wants in the real world,” explains co-founder Emile Saway. “We believe that whether a user has 15% or 50% ability, everyone should be able to use this app.”
ReAble breaks down complex processes, like cash payments, into simple blocks of tasks. When a user sets up the app, they complete a gamified assessment to evaluate their literacy level, mathematic abilities, and other abilities that directly apply to these tasks. The UI is set up to account for their abilities. For example, if the user cannot read or write, the text-to-speech feature is enabled, or if the user has low dexterity, the interface does not have scrolling.
It also provides caregivers transaction information to track purchases and even has the ability to allow caregivers to approve/decline transactions to help users make positive choices and provide approval record.
This so-far neglected market is a large one to reach. Worldwide, it is estimated that 3% of the population (210 million people) have some form of intellectual challenges. ReAble has tackled this global challenge with a global team of developers, psychologists, and business development staff in Canada, South Africa, Romania, Germany, Egypt, and other countries.
The Android app is available for users in 55 countries in 14 currencies, making this app accessible to 4.5 billion users. The top users are in India, China, and Russia. Other areas include Iran, North America, the Philippines, and the United Kingdom.
An iPhone app is slated for release in March of this year.
Trivial is an online Ethereum blockchain interface that provides users information about tokens and information about token holders. It is accessible throughout the world with active users from the U.S., India, Australia, and throughout Europe.
Through the Trivial dashboard, visitors can access detailed information to give them the insight to make better decisions about their token purchases. The information includes about tokens, the project status, white papers, social media activity, and holders. These signals can be used to determine how active a project is and give indications of risk levels.
For example, the Trivial token profile includes top holder information so that users can see if it is an exchange, individual, or team. The user can do additional research to look into the rules associated with team holdings and determine when they are allowed to distribute the tokens to estimate liquidity risks.
Visitors also can look up other token holders to see their full list of holdings. Users can follow investors with similar interests and strategies to discover new tokens and see trends in token holdings.
Trivial is not just a powerful resource for decision making, it allows visitors to keep track of their Ethereum addresses, favorite addresses, and favorite tokens. This information is stored on the user’s browser storage, keeping it private and accessible.
The company started as a tokenization project. After tokenizing a rat mascot and other objects, the founders realized how many tokens were out there.
Trivial is funded with more than $600,000 in Angel investment. Since its funding in July 2017, the company has been focused on development and working with the crypto community to ensure Trivial meets their needs as a resource for investment.
TrustNote is a China-Australia based company that is building more efficient blockchain technology, in part to overcome some of the inefficiencies of the Ethereum platforms and its approach so smart contracts. The idea is to provide faster, scalable blockchain technology for high-volume, decentralized applications, such as social media, gaming, chat, and the digital contents market.
After successful ventures in blockchain, founder Jeff Zhou started development for an IOT software platform based on blockchain technology. The challenges faced in trying to apply blockchain to IOT drove TrustNote’s development of a scalable, high-throughput platform designed to provide high-performance at a lower cost in order to drive innovation and support new applications of this technology.
“We made TrustNote fast and lightweight to allow users to use the technology much more easily and at a lower cost,” Zhou explains. “We want it to be accessible for everybody on every device. The distributed ledger system will provide the infrastructure for the value exchange. If you can make the cost lower and the communication faster, it will make this world more productive and more equal.”
Later this year, the company will release its multi-platform wallet to support safe usage of the wallet in a web browser across various operating systems (Android, iOS, MacOS, and Windows). This technology will build on existing SDKs and APIs to make integration smooth. TrushNote will also expand its token platform cloud service to allow people to define their tokens online.
Next year, TrustNote plans to release a micro-wallet focused on IOT devices to bring blockchain technology to this space and solve issues with limited computing and storage resources and other limitations.
The company is currently funded through private funding and a 2018 ICO with investors primarily in East Asia and Australia.