Rising out of crisis
Editorial

Rising out of crisis

Catalyst reports on how Fidor Bank is placing the customer at the centre of its innovative marketing plans.

Founded in Germany in 2009, and launched in the UK in 2015, German bank Fidor has been described as more like a marketplace rather than a place to open a current account. It’s less like a traditional bank and seen more as a social community with a banking licence.

The company’s strategy has been formed off the back of banking’s shifting fortunes, and Fidor’s growth in its home market, and recent international expansion which have been built on an innovative approach to creating new financial products.

However, it’s no secret that its arrival comes at a time of uncertainty and rapid change within the banking/financial sector. “For us, it means doing things in a different way, the way customers want and need, by offering products and services adapted to them,” says Fidor’s marketing communications manager, Nancy Kalogeropoulou. “Nowadays, consumers want services that truly respond to those needs; they want services that are performed quickly, in a simple way that’s hassle-free. This is what I would describe as innovation.”

Fidor’s innovative services and products have included crowd financing deals and peer-to-peer loans; customers can post requests to borrow money on the bank’s online community forums, where other customers can offer to lend to them. It has also linked its interest rates to Facebook likes: for every 2,000 likes the bank gets, it adds 0.05% to the interest rate, rising to a maximum of 0.5%.

Such modernisations have made for exciting headlines and helped increase brand recognition. But, says Kalogeropoulou, these innovations point to a strategy for growth that’s not just about turning people’s heads, but it’s about a longer-term plan.

Competing forces

Fidor’s brand proposition was developed specifically as a response to the financial crisis and the surge in public disaffection with banking practices. Fidor’s brand proposition was developed specifically as a response to the financial crisis and the surge in public disaffection with banking practices.
“The idea was to build a bank from scratch,” says Kalogeropoulou, “focusing entirely on customer relationships and ensuring their needs are met – one that is customer-centric and transparent, and with an online community of like-minded users, through which they can engage in discussions about financial matters or product suggestions.”

While the post-crisis world of banking might still be relatively uncharted ground, the forces shaping the company’s strategic outlook will be familiar to marketers: The threat of new entrants to the market has arrived in the shape of other challenger banks, including Starling, Mondo and Atom Bank.

The technology that Fidor is harnessing brings additional products and services to the market at a rapid rate. The power of suppliers is being felt with big banks owning much of the payments system in the UK – new and small banks have to request access to the industry from established competitors.

The company’s strategy might have been forged in a period of reaction to changes across the industry, but it’s also predicated on long-standing marketing values. That holistic approach can help marketers plan in the mid to longer term, but the ability to adapt at great speed is also a key tenet of Fidor’s proposition.

To meet the fast-changing expectation and demand that the forces outlined above elicit, the company has placed ‘technology enablement’ at the core of what it does, to provide choice and stay competitive.
“London’s fintech hub has been embracing new technologies over many years,” says Kalogeropoulou. “The financial services and fintech sectors are dynamic by nature. Agility and flexibility are therefore key to staying ahead of the competition and keeping up to date with customers’ expectations – especially as customers have the ability to compare services and choose those that are better, cheaper and faster.”

Kalogeropoulou also highlights how such a customer-centric strategy can enable a company to adapt more easily to a changing market “Treating consumers in this way makes them co-managers of the business,” she says. “The online community is where members can engage in various finance topics and express their personal views on our offering and strategy. It means we’re based on openness and transparency – and this goes back to the start, where you find the gap in the market in order to meet the customers’ needs, where other institutions have failed to do so.”

Strategy before product

In the UK, the ‘talk first’ approach extended to setting up a community before actually launching any products. The strategy targeted potential early adopters, creating an opportunity to listen to them and discover their priorities before settling on the specifics of a full-service launch. Matthias Kröner, the bank’s CEO, has described it as ‘a mutual approach’ to expanding the business.
“We also researched the markets that were in need of its products and services, and tested and defined the most effective media and channels to use to reach out successfully,” says Kalogeropoulou. Only then did the company commit to specific products.

The launch of the retail product offering produced quick growth in the UK, but Kalogeropoulou recognises that this was just the first iteration of an ever-evolving service: “You always need to continue to improve the services in order to provide customers and potential customers with more optimised solutions,” she says.

“For us, this will mean extending our retail and corporate banking offering – and increasing our market share. We have already integrated various fintech partners onto the platform for additional services, enabling the bank to create an experience that is unique. Creating new partnerships is the key for us to provide a wholly new, different and personalised experience for consumers.

When it comes to marcomms, Fidor has taken a joined-up approach to raising its profile: “The whole variety of marketing channels, across multiple platforms – including social media, events, public relations, online marketing and affiliation – have also helped us increase our customer base to a great extent, by getting brand recognition in the UK market and promoting our current retail offering,” says Kalogeropoulou. “Marketing needs to be constantly revised and adapted to the market’s demands in order to be effective and successful.”

As well as keeping up with consumer demand, Fidor has looked carefully at building a team and creating a culture that can help it to meet its targets. “For an innovative business to move forward, it’s important to build an internal team with a focus on innovation and growth,” says Kalogeropoulou.

“The backgrounds and experience of the people comprising the team, as well as their passion, communication and willingness to make things in a different way, play a pivotal role in a company’s success. Continuous learning and personal development is another factor that is crucial to sustain innovation and growth in a corporate environment.”

 Catalyst issue three: Growth culture

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