The fintech market comprises a variety of industry segments including alternative lending and financing, digital investments and payments, and neobanking. The rising interest in investments among the public and the need for loans and insurance are the fundamental forces behind this immense growth surrounding the fintech lending explosion.
These organizations aim to streamline the lending process, which has, traditionally, not been always the most transparent. This process optimization and increase in transparency can empower fintech lenders to expedite their payment processing and offer seamless experiences for mortgage and loan seekers. However, despite their advantages compared to traditional lenders, fintech lenders have had a hit-and-miss experience with funneling in qualified leads.
A Big Challenge FinTech Lending Companies Face
While fintechs can brag about being the “new kid on the block,” this title and sleek tech-forward approach aren’t enough to penetrate the current grip traditional lenders have on small businesses, personal loans, and other consumers. Securing the ideal amount of leads that enter the sales funnel and complete the cycle has been a sticking point for fintechs. With intense audience competition from traditional lenders and other fintech lenders, addressing this lead generation and qualified roadblock is critical.
Acquiring and Moving Leads Through the Sales Funnel
Fintech lending companies are facing incredible pressure to generate new leads. The biggest competitive edge traditional banks have over fintech lenders is brand recognition. Customers often opt for a financial service provider merely because their families have used it in the past. Name power goes a long way when it comes to the “lending club.” What sometimes can feel like an exclusive market held on tight by traditional banks, fintech lending platforms may stumble to find and reel in their target audiences.
Fintech companies don’t have any legacy clients. Instead, they must focus their efforts on finding, acquiring, and moving new leads through the sales funnel in order to compete with traditional financial institutions and their extensive roster of past clients. Developing a lending relationship takes time, effort, and strategy in order to showcase why borrowers should go with fintech lenders instead of the status quo.
What Makes Lead Acquisition Difficult for FinTech Lending Companies
Lead acquisition is challenging for most marketers, and fintech lending companies are no exception. Listed below are some of the major factors making lead acquisition especially tricky for Fintech companies.
Ineffective Marketing Campaigns
A successful marketing campaign contributes to business growth and bottom-line results. Inversely, an ineffective marketing campaign reduces traffic and customer interest.
Unfortunately, fintech companies are having difficulty acquiring leads because they lack marketing campaigns that are meeting consumers where they live. To see rapid growth, fintechs need to ensure their marketing efforts are personally customized to the needs and issues facing modern business owners and consumer loan borrowers.
Poor Quality Leads
For a long time, marketers emphasized the importance of quantity over quality. Today, 70% of B2B marketers prioritize quality over quantity. You could be connecting with 1000 leads daily, but not all are genuinely interested in your services.
Quality leads are intrigued by what companies offer and are more likely to become customers than other leads. Unfortunately, Fintech companies are often not targeting the right customers, and poor quality leads are extremely difficult to convert.
As stated earlier, Fintech companies require IT integration and quality software to thrive. These technologies balloon the overall costs of running an organization. With a tight budget, it’s difficult to organize marketing campaigns and related activities. Eventually, tech costs sap marketing expenditure and leads slow to a trickle.
Solutions that Don’t Work for FinTech Lending Companies
Fintech lending companies use several tactics to boost their lead generation efforts. Unfortunately, most of them do not work. Here are a few common strategies that tend to yield minimal results.
- Doubling Down On Ineffective Acquisition Strategies: The Harvard Business Review recommends not to double down on failing strategies. Doubling down on a strategy that doesn’t work will only increase your losses. You can’t throw money at your problems; you have to rethink your tactics.
- Sunk Cost Fallacy: Sunk cost refers to the investment made in a project. The sunk cost fallacy is the belief that all projects must be seen through once they’ve been invested in. Companies assume that they will fail to recover the costs if they abandon a project they’ve invested in. They expect if an ill-conceived project continues, they “may” recoup the costs. However, it’s more important to consider future costs than past ones when evaluating the viability of a project.
- Non-human Focused Attitude: Fintech companies can sometimes be automation-crazed. However, studies reveal that most consumers still prefer human interaction over bots.
- Outdated Technology: Old tools no longer work in the fast-paced digital world. However, updating tools can be very expensive. Finding a good balance of effectiveness and affordability can take a lot of time.
- Trying to Fix Everything In-house: Having a capable in-house team is a plus, but it doesn’t offer a genuine solution to solving issues with lead acquisition. Sometimes, hiring a consultant is the right move.
How to Fix the Lead Gap for FinTech Lending Companies
Whether you run a Fintech company or work within the lending process, it’s within your power to fix the lead gap. Here are a few strategies you may want to try.
- Better Marketing: Ineffective marketing campaigns reduce your chance to acquire leads, but several Fintech giants ran successful marketing campaigns in the past. You can get in touch with professionals with years of experience in the related industry and seek expert guidance to leverage your marketing strategies and fix the lead gap.
- Updated, Affordable Tools: Fintech is impossible without innovative and advanced tools. You need to leverage the latest tool available to target quality leads.
- Better Data Analytics: Do not rely on two or three statistics to determine the right strategy for acquiring leads and lending processes. You can make better lending decisions through deep data analytics.
A Solution for FinTech Lending Companies
Fintech lending companies have the potential to gain traction in the digitalization age. In fact, many are already experiencing roaring success.
Regardless of the company size, boosting lead generation is essential to overcome the long-term challenges and maximize results. It is crucial to remember that you aren’t competing with the entire Fintech sector instead your specific niche.
Fortunately, GDS link offers AI-driven software solutions, analytics support, and services focused on credit risk management. You can utilize them to enhance your marketing efforts and improve the lending process.