What fintechs should never do in the first couple of years

Lianna Brinded
Head of Yahoo Finance UK
Photo: Getty

Anne Boden is behind one of the UK fintech’s biggest success stories — Starling Bank — which has raised more than £263m ($338m) of investment and now over 1 million accounts.

Starling was one of pioneering fintechs to meld a fresh and enticing design of its hardware and software as well as a new type of functionality that has made it standout from traditional banks and their apps.

But as the industry has grown, the signature mint green card alongside those from the likes of Monzo, Revolut, N26 and others, are commanding attention from new potential customers.

Speaking at the FinTECH Talents conference in London, Boden said that while aesthetic is important in capturing new customers, startups shouldn’t get distracted in ramping up marketing spend to get attention in an increasingly saturated crowd.

READ MORE: Challenger bank Starling tops 1m accounts

“I think if you are a new bank and you’re spending marketing dollars in the first couple of years — there’s something wrong — unless the new adopters embrace you and actually really want to use you, you’re not going to have a sustainable future,” she said on stage at the conference as part of the Keynote Debate | Where we are going, will we need banks?, which was moderated by Yahoo Finance UK.

“I think in the first couple of years, it’s all about the early adopters embracing you and then you spend the marketing dollars and if you’re spending marketing dollars in the first year, something has gone terribly wrong.”

The advice goes against traditional marketing practice from incumbent companies.

For example, according to a Duke University and the American Marketing Association survey, companies with less than $25m in revenue spend an average of 11% of their revenue on marketing and firms that are new are usually encouraged to plough in more money at the start to build up a customer base.

However, after five years of being founded by Boden, Starling Bank included TV into its marketing strategy for the first time — an ad that ran on 14 October that hit audiences of the Great British Bake Off and England's Bulgaria qualifier for UEFA 2020.

Yahoo Finance UK is proud to be a media partner for FinTECH Talents — the ultimate global fintech festival in London 11-13 November 2019. There are 3,000 festival-goers + 1,500 innovators representing over 400 different financial services institutions + Rockstar speakers & steering committee members + Over 50 hours of content sessions + Game changing tech companies + The talent of tomorrow + Craft beer and live music sessions.