Willie Pang, CEO of Limepay
The booming industry that was, and continues to be, adtech has no doubt gone through its ups and downs over the years. Having worked in the industry for over two decades, I’ve first hand seen these changes come to light and then back into the darkness again.
But only since I moved into the parallel industry of fintech have I noticed some similarities that arguably place adtech a decade ahead. This begs the question: Is fintech’s future decided by adtech’s past?
There are three key areas worthwhile unpacking. The first is related to data and the value exchange (hint, in advertising and marketing, we’ve failed on this front). The second is the existence of too many siloed point solutions and a need for aggregation. And last, but not least, is the rising convergence between the finance and marketing eco-systems.
One. Data and the value exchange.
When we look at the trends side-by-side, the use of data emerges as a symbiotic relationship that both industries hold at their core. Yes, it’s true that any successful business has data at its core — no matter the industry — but the way in which it is used is the key here.
The ‘cookie’ system has long been used by adtech to build user profiles, leveraging opt-in information and preferences to better understand customers — which in turn allows them to better sell complimentary products and services. From a fintech perspective, payments data now holds a similar treasure chest of rich data that can be leveraged to define users and their personas — it’s the way that users consume that brands need and want to understand better and payments data provides exactly this insight.
One could argue that as the cookie nears extinction, payments data could deliver the next wave of insights brands require to maintain a level of personalisation that meets the high expectations of today’s customers. But again, this data must be sourced responsibly, which is where the opportunity of embedded finance blends into the marketing sphere.
With the rise of open-banking and data-sharing within the banking and finance industry, the floodgates of data access are re-opening. Where bankers need to learn from marketers most is how to transparently share the benefits of this value exchange with their customers and give them choice. It may sound utopian but I think it’s fair for consumers, and businesses, to grant data access permission in exchange for faster access to and movement of money — think digital wallets, bill payments, automated loan applications… the list goes on.
Where advertising made a strategic mistake many years ago was trying to hide this choice away, to be used as a secret weapon to increase advertising yield and boost sales. We can’t let this mistake happen again. Data shouldn’t be feared, it should be embraced.
Two. Too many silo’s make it impossible for marketers to harness the power.
This brings me to my second point on why fintech is indeed likely to follow in the footsteps of adtech. A decade ago, the adtechadtech industry had a countless number of niche tech start-ups all specialising in one small piece of the broader ad-tech puzzle. Slowly but surely, this led to consolidation as the ‘big players’ in the industry out-competed or absorbed such ‘small players’.
In fintech, we’re seeing a very similar pattern emerge. While banks are still partnering with fintechs, more and more we’re seeing fintechs bought out by dominant industry players — again following in the footsteps of ad-tech, which met its fate a decade ago with the buyout of leading startups by industry giants.
Three. The convergence is coming.
However, it’s not all doom and gloom. For now, the relationship between ad-techs and embedded finance delivered by fintechs provides a unique opportunity to close the circle and allow payments to elevate the overall experience a customer has with a brand, while in exchange for that experience providing brands with additional insight on who, what, why and when customers convert. Brands that acknowledge the value exchange within the adtech and fintech relationship stand to win, and until we see the fintech industry converge it’s likely those brands will keep winning.
When looking at it holistically, it’s possible that both fintech and ad-tech can work together to deliver the holy grail of the customer journey and truly understand what the key to conversion actually is. Often delivered by fintechs, embedded finance platforms provide brands with ‘white labelled’ payment options for users to transact seamlessly. Not only do they support a seamless user journey, but the fact that the user is transacting in the same ecosystem means brands can leverage their payment ecosystem to get more insight into purchase decisions and payments.
But it’s not just about using this data to sell. More and more we are seeing what we deem to be ‘responsible’ use of payments data, where brands leverage insights on payments to better understand consumption patterns and support financial health. Particularly amidst the rise of Buy Now, Pay Later platforms are brands being held responsible for supporting their customer’s financial health.
Knowing the power in payments data, we’re beginning to see new e-commerce ecosystems, such as Commbank’s Cheddar, emerge. Offering deals for consumers to purchase branded goods and services, Cheddar has tipped traditional banking on its head and reversed the relationship brands have with banks as they too begin to tap into the revenue opportunities such holistic ecosystems offer.
As a fintech operator, I know it’s still early days before the industry reaches its full potential. But, I’m hopeful that the fintech sector can apply the learnings gleaned from the adtech journey to build a better pathway to a converged future.