Fintech is still far from mainstream, but one player is finally showing how to get there

Despite a decade of hype and billions in funding, fintech is still only used by early adopters. But one startup has finally got the right strategy to crossover to the mainstream — by not trying to be for everyone.

Fintech funding moves into the growth stage

CB Insights recently reported that total fintech funding has hit $77.6bn with 26 ‘unicorn’ companies each valued at over a billion.

As the Fintech Insider podcast discussed the funding is moving from early stage (funding new startups) and into growth stage ‘megarounds’, with Atom Bank having raised £340m in total, and Revolut’s latest round of $250m (after just 3 years!)

But do any of these businesses yet have the right strategy to actually grow into the mainstream and stand a chance of paying back this investment?

Nearly all fintechs are targeting the same early adopters

I’m an early adopter. I have Monzo, Tide and Revolut accounts. Partly becasue I’m curious and am trying them out, and partly because they do different jobs: current account, business invoicing, travel/crypto card.

If you hang out in Shoreditch (as I do), you’ll see lots of people with these cards. If you hang out in Stockport (as I also do) than you’ll see rather less.

So this got me thinking: where are these fintech companies on the technology adoption lifecycle?

The technology adoption lifecycle

Some ‘back of fag packet’ calculations:

  • Monzo have c.600k customers with c.200k daily active and c.500k monthly active users. There are 67m current accounts in the UK. So they have at best 0.9% market share.
  • Revolut have c.2m ‘customers’ with c.250k daily active and c.900k monthly active users, but spread across 6 European markets. So that’s, on average 330k users per market. They’re launching loads of products, picking off the low hanging fruit in lots of market, rather than going deep in any of them.
  • There are forecast to be 3.2m new entrant current accounts in the UK by 2020, which would be 4% total market share.

So the best fintechs are still only appealing to Innovators today, to just 2.5% of the population. And even the most bullish predictions still have them deep inside Early Adopter territory in a few years. So why aren’t they crossing over to the mainstream?

Crossing the chasm

In his seminal 1991 book, Geoffrey Moore set out the challenge of ‘crossing the chasm’ from early adopters to mainstream consumers, and suggested techniques to successfully cross it including “choosing a target market, understanding the whole product concept, positioning the product, building a marketing strategy, choosing the most appropriate distribution channel and pricing.” (Wikipedia)

Brands can’t cross the chasm by trying to be for the whole of the mainstream. You can’t create a clear enough proposition to persuade people to adopt a new behaviour while focussing on 34% of all people. Instead you have to find a discrete audience within the early majority; the first mainstream audience who will adopt your product, and by using it will normalise it to the rest.

  • Facebook famously focused on students in Ivy League universities as their first mainstream audience
  • Uber focussed first on town car customers in big US cities (not all taxi users)
  • With Skype we consciously appealed first to international students (and by proxy their families back home)

The fintech movement is meant to be about customer centricity. But how many of these companies have a clear idea who their mainstream audience is? How many truly understand those people’s lives and their ‘jobs to be done’? How many have a brand purpose that dedicates them to being the best in the world for those people?

The end of being for everyone

Banks used to have to be for everyone, because they were regionally based; because we used to live local, physical lives. The Midland Bank. The Royal Bank of Scotland. Alliance & Leicester. They had to be able to serve all types of people in their region, through their general purpose branches.

But new banks and fintechs are free to focus on a substantial niche of customers they can reach wherever they are through internet distribution, and that focus can allow them to be the best in the world for those people.

So why then are nearly all of them still trying to be for everyone? For example:

  • Monzo is a great modern current account. It’s what a current account should have been like all along. But it’s general purpose, it could work for anyone.
  • Yolt is a great money manager app. It sets the standard for all money manager apps. But it’s general purpose, it could work for anyone.

The first fintech that’s being for someone?

This new campaign for Transferwise’s borderless account declares that they are for “more than one passport people, bilingual kids people, one way ticket people”.

We’re meeting more and more VC or corporate backed fintech startups that have built a great product, but have no idea how to take it to market. They may have done lots of user research as part of their product design process, but they didn’t actually get to understand their target customers and their real lives, and so have no idea how to find them and how to talk to them.

Transferwise are the first fintech we’ve seen to pick off a discrete mainstream audience, and to show that they truly understand those people’s lives and, more than that, want to celebrate those people’s new way of living.

Bravo. More of this please.


At KBS Albion we help businesses understand people’s changing needs, and work with them to create new offers and ways of working to keep up with them. If you’d like help to get your new product to cross the chasm, then please get in touch.