The multi-award-winning fintech PR and marketing firm CCgroup released the results of its study on “How to influence fintech buyers,” which was based on a poll of significant banks and fintechs in five European markets. According to the study, 70% of European financial institutions anticipate raising their financial technology investments over the next 18 months, despite the fintech crisis and broader economic slowdown. The paper investigates how the cost-of-living issue and the present economic slump have affected the market for purchasing financial technology, providing information on the factors that affect banks’ and fintechs’ provider selection. 251 purchasing decision makers (C-level executives, VPs, and department heads) at major banks and fintechs in the UK, France, Germany, Spain, and Italy were surveyed by independent research consultants Censuswide for CCgroup.
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Fintech purchasers intend to make more purchases at higher ticket prices despite the difficult macroeconomic situation. Products and services that assist the institution and its clients in navigating macroeconomic uncertainty, particularly the cost-of-living problem, are now clearly the centre of attention. The top five categories for purchasing technology are payments (19%), core banking (21%), artificial intelligence & machine learning (20%), and insurance (25%). The average investment ticket for technology was between €290,000 and €570,000, which is a 300%+ increase over 2020 figures. Buyers desire solutions that increase revenue (34%), make it easier for them to integrate third-party services (33%), and make it easier for third-party services to be integrated into their offerings (31%). Savings products (35%), credit goods (35%), and loans technology (33%), in particular, are of interest to buyers as a way to help their clients get through the cost-of-living issue.
How to persuade fintech purchasers
The following channels, content categories, and provider characteristics have a stronger impact on banks’ and fintechs’ purchasing decisions than others:
Shortlist stage: The most effective media are trade media, advertising, internal business analysts, and content including analyst reports, news pieces, and industry debates. They offer a variety of potential suppliers and provide just enough depth of information—but not too much—to help decide whether to move forward with shortlisting. The impact channels and content get more focused as we move from shortlisting to selection. Buyers want to thoroughly research each company to help them make their ultimate decision after identifying suitable technology providers. The most important media include analyst reports, whitepapers, and opinion pieces, as well as platforms like social media, search, and events. Buyers desire providers who can show they are robust and well-run, with a track record they can be proud of. Values and ethics (28%), governance & oversight (25%) and supplier reputation (24.7%) head the table in terms of attributes.
Industry analysts: According to four out of ten purchasers, 25 to 50 percent of their technology purchases involve industry analysts. Just 2% of those surveyed claimed that no industry analysts were participating at all. Only at the discovery or even purchase stage do nearly half of buyers (45%) interact with suppliers.
What discourages buyers?
Buyers like to engage with service providers who are growing in the market, can demonstrate performance using publicly available company and technology information, and who have a solid reputation with the press and industry analysts: The top three factors that prevent customers from choosing a provider are lack of knowledge among industry analysts (31%), a lack of supplier news (29%), and a lack of online information (28%). Due diligence on the supplier (38%) and gaining agreement across the organisation (36%) are the main barriers to getting a purchase approved, followed by a lack of performance information and supporting documentation from the provider (33%).
“Geopolitical and macroeconomic turbulence is driving major financial institutions to buy more technology and at higher ticket prices. However, the market is crowded with thousands of suppliers vying for the attention of a small number of major buyers,” said Daniel Lowther, Head of Fintech at CCgroup. “The biggest issue fintech providers face is that nearly half of buyers are only engaging with a supplier at the discovery or even the purchase stage. This means that firms are being evaluated from afar and selection depends on their reputation and online presence. Effectively, it’s all about the shop window.” “To influence buyers at major European financial institutions insight is critical. Despite fintech being a $112 billion industry, quantitative data on how decision makers select technology providers is lacking. This research, and the CCgroup reports that precede it, goes some way to addressing that insight gap,” said Alexandra Santos, Head of Emerging Fintech at CCgroup. “The purchasing landscape is evolving. Increasingly, buyers are looking for technology providers that put a major focus on values and ethics, governance and oversight, and supplier reputation over the more traditional metrics like cost, flexibility, and cutting edge tech. Purpose-driven firms with strong reputations and track records that can evidence their performance are best placed to win.”
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