(Note: This was a blog post I had written in September 2016, while I was a manager at the public relations firm FleishmanHillard. Original post hosted here: http://fleishmanhillard.com.sg/2016/09/riding-fintech-wave/)
We have heard a lot about how every business is a technology business these days – understanding digital, mobile and integrating technology across and throughout the organization is crucial for every business that wants to survive and thrive.
Fintech has attracted much attention and confusion over the last few years for the finance sector, and it continues to drive significant changes and innovation. To start with, fintech is usually applied to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising and even asset management, and it looks set to continue to change the way we live and do business.
One of the projects spearheaded by the World Economic Forum is one on disruptive innovation in financial services. The ways in which traditional financial services have been structured, built and consumed have faced many challenges as a result of the changing regulatory landscape as well as consumer needs. The need to understand disruptive innovations is greater than ever, and one of the major challenge areas related to innovation in financial services that the WEF identified was that of the application of distributed ledger technology, such as the blockchain, which is the technology behind bitcoin.
The fintech revolution, however, is more than just blockchain and all that it promises. The financial services sector is undergoing some major changes, and fintech is an unstoppable force. A TechCrunch article noted thataccording to KPMG and CB Insights, a total of $5.7 billion was invested in fintech in the first quarter of 2016 alone. While companies in China and the U.S. receive most of this funding, Southeast Asia fintech investment has increased significantly as well.
Fintech opportunities by sector
Of course, blockchain has been the technology that has garnered the most attention. The Prime Minister of Singapore Mr Lee Hsien Loong had earlierlauded the huge potential of bitcoin and blockchain in transforming the banking and finance sector, and that such technologies are essential if Singaporean banks want to continue thriving in the world.
Indeed, banks and financial institutions must not only stay abreast of these developments in fintech, but also to look ahead to groom talents who can navigate the space. A South China Morning Post article noted that making blockchain work has proven to be more complicated than it sounds. Banks and their fintech consortiums are just starting to roll out strategies and plans to start prototyping blockchain. Some of the banks are also struggling with how to manage innovation and finding an inventive focus.
Singapore has tried to stay ahead of the curve by backing private sector projects in fintech and also setting up regulatory sandbox for fintech experiments. In addition, the Monetary Authority of Singapore (MAS) also announced that it has set up an International Technology Advisory Panel (ITAP), which will advise MAS on international developments in FinTech and how Singapore can harness new technologies to enhance the provision of financial services. An example of a private sector project is apartnership between Standard Chartered and DBS to use blockchain for trade finance transactions. OCBC Bank has also launched a fintech co-working space and innovation unit in Singapore and its first accelerator program to identify and collaborate with innovative startups.
Looking beyond blockchain, there are several other sectors that have seen huge backing in funding, and these are credit, asset & wealth, insurance, payments, and lead generation. In Southeast Asia, payments and lead generation account for 78 percent of all fintech VC funding in 2015 and H1 2016. The remaining $75 million was invested in credit, asset management, wealth management, insurance and blockchain companies.
To celebrate fintech, Singapore is also launching the inaugural FinTech Festival in November, hosted by the MAS. The gathering of a large group of fintech professionals will also honor outstanding solutions with the FinTech Awards.
Communications strategy for fintech firms
With these sectors seeing so much activity, clearly, there is endless potential for fintech to revolutionize not just the finance industry, but also bring about changes to how things are run in other sectors. What this all means is that the pool of fintech firms will increase significantly, and at some point, communications needs will arise as companies look to build stronger awareness and develop differentiated positioning.
This is where working with the right communications and PR agency becomes critical. There are many PR agencies in the market with strong financial and corporate teams as well as technology expertise they can help raise your profile and tell the right story, whether it’s about founders with interesting backgrounds, or strong funding backing to share.
In terms of how we talk about the company and the business, it is not surprising for entrepreneurs in the fintech space to see their business and work in a technical or siloed manner. Working with communications professionals to uncover more nuances to your story is important, because we believe that fintech is more than just the technology – we should never be selling the product, but should instead be focused on the story telling for the clients.
It is therefore crucial to establish the messaging strategy and work out the specific key messages and story lines from the get go. Fintech companies in the insurance space, for instance, could have compelling stories around how their platform connects people with the best plans, shortens waiting time and also changes people’s lives. These stories help to give the work that fintech firms are doing – as a result of the smart and meaningful use of fintech – life and a momentum on its own.
Finally, as the industry evolves so quickly, communications professionals are encouraged to stay up to date on the latest developments. Most PR professionals understand the need to become more savvy and educated in the ongoing changes around regulatory frameworks, policy discussions, as well as legal changes and implications, in order to provide the most informed counsel for clients. This is where it pays off for fintech firms to engage PR professionals as well in navigating the complex space and also in dealing with the media.
– Yvette Lim