Thursday, April 9, 2020

Growth Hacking for FinTech Startups


Growth hacking has become the buzzword of the startup circles. After the market-product fit is established, growth is the true north of any startup. Growth hacking differs from conventional marketing in several aspects, such as a lower budget, shorter timeline, constant testing in lean style, involvement of programmatic efforts, etc. There are tons of fascinating stories about how growth hacking may help achieve eye-popping increment such as the story of Airbnb/Craigslist integration. However, in FinTech, many of the growth strategies may backfire if you borrow them directly. 
Considerations before growth hacking FinTech is not your average e-commerce business. It requires a huge capital investment, is a highly regulated market, and the key to success boils down to credibility. Here are some areas you should take note of when you do fintech growth hacking in Hong Kong:

1. Compliance and Regulations

Unlike Singapore, who introduced a sandbox to exempt fintech startups from hefty regulations and requirements until they are big enough to comply, the Hong Kong government has yet to come up with any such facilitation to encourage innovation. Until then, you are highly recommended to put compliance into consideration when you grow. Do know how the respective laws works, e.g. Banking Ordinance, Securities and Futures Ordinance, Money Changers Ordinance, Money Lenders Ordinance, Retail Systems and Stored Value Facilities Ordinance, Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, and, last but not least, the Personal Data (Privacy) Ordinance. I would draw special attention to KYC, AML, and personal data handling (e.g. opting-in for marketing message, instead of opting-out).

2. Customer Expectations

It is daunting for early adopters to entrust their personal and financial data, as well as their assets, with an unknown company. Being professional, trustworthy, transparent, efficient and consistent will help ease the doubt. While you need a sleek and informative UX that is repeatedly tested to ensure seamlessness, being too playful may make users question your credibility. After all, finance is serious.  Remember, one negative comment is more powerful than 100 positive ones. Only make claims that are deliverable. If possible, over deliver. Only then can you make early customers your evangelists.

3. Culture and Language 

Although people in Taiwan, China, Hong Kong, Singapore all speak Chinese, there are drastic differences in culture and language preference. In Hong Kong, despite the common use of English, traditional Chinese (Cantonese) is the effective language to direct conversions. Thus, copy writing in a local style is essential. Employing mainland copy writers and translating simplified Chinese into traditional Chinese, for example, is a cheaper option, but may not be the best move.

4. Industry fellows

Obviously you are disrupting the financial status-quo in the city, but banks and financial institutions are not your enemies. Instead, they are very valuable potential partners that can help bring your business to the next level. Extreme growth tactics may signal red flags to them and impact future collaborations.

Here are some standard steps you can follow to kick off your growth hacking:

Understand your Company, Product and Market 

What is your company trying to achieve? Which is your target segment? Is your business consumer- or business-facing? Understand your target group’s demographics and how you fit into their daily lives. Estimate the size of your market and major competitors’ market share. Understand their strategies and what set you apart from them. Construct a memorable statement you can own, and a few unique selling points (USP) to help you develop your value propositions. For example, we can easily associate “Cutting out the Middleman” to Zopa, “Micro Investing” with Acorn and “Home Away from Home” with Airbnb.

Goal and Timeline Setting

Is it the traffic, download figures, number of registrations, active users, conversions or transaction volume that you are growing? Sometimes, tactics for growing different attributes can be hugely different or contradicting; knowing the right area to work on saves a lot of reiterations. Set clear growth goals and a timeline, then optimize the limited resources accordingly. The numbers should be realistic because setting an overly ambitious target that is doomed to fail may hurt morale and disappoint investors.

Brainstorming and Prioritizing

Exhaust all possible growth hacking techniques and eliminate those that are not applicable to your model, not a good fit to your positioning, or too complicated to execute. Then, prioritize according the timeline, cost and effectiveness. To shorten the development cycle, external SaaS such as Mailchimp and Optimizely might come in handy.

Constant Validation and Reiteration

Do not wait until you have a perfect campaign ready to go. Instead, select the right segment and the right time to launch a MVP and re-iterate. It is very common for startups to employ several tactics at the same time, but make sure that you segregate the testing groups so that the impact of a particular change is measurable. Once your assumption is validated, run it through the entire user base. If the impact is not positive, go back to the MVP and fine-tune it or switch to other strategies until you come up with the best result.

There is no universal winning formula for all startups, but I hope the above prepares you to start your own growth plan. After all, people are the key to success and finding the right growth hacker is the first step. Good luck.

by Rachel Lam. As a veteran in consumer banking as well as a growth hacker and strategist in fintech B2B/B2C startups, Rachel aspires to promote Fintech and other innovations in Asia. She can be reached at: [email protected]

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