New market, new product, new experience
In 2010–2012, something began to change in people’s behavior. The changes happened so slowly and naturally that most of us did not even pay attention to them.
In 2012 Facebook was about to go public and the company focused on growing revenue per user. And since revenue directly depends on the time spent on the network, Facebook began to maximize it, knowingly or not exploiting all the weaknesses of the human brain.
Inconspicuous, but honed on thousands of A / B tests, notifications, and other design details (our instinctive reaction to stimuli is triggered), a Like button (seeking social approval), and, finally, algorithms that form a feed based on our patterns of behavior.
Twitter, for example, was the first to implement the “slot machine effect” — updating the feed when the screen moves down. So, change after change, we gradually found ourselves in a world where dozens of applications are competing for our attention, one more interesting than the other.
Now, think about what fintech companies should focus on. I believe fintechs and neobanks should focus on the customer experience model that requires to go beyond and above banking and finance.
I like calling this model “Experience Banking” or “Experience Finance” but there are a lot of other terms for example “Embedded Finance”, “Ecosystem Model”.
In this model fintechs become embedded in the everyday life of customers whether it is chatting, getting a meal, watching a movie, paying bills, or just simply saving for a car. The focus is much broader than banking and finance alone here, banking is merely transacting the monetary aspects of those experiences because spending, saving, or investing has a lifestyle/stage purpose. The more time customers spend in that ecosystem, the more fintechs learn about them, and the better they can personalize offers. Here, higher levels of engagement drive greater opportunity to capture wallet share.
To launch a successful start-up, you need to have an incredible breadth of knowledge and be able to thrive across lots of different areas and this is especially true when it comes to payments and fintech.
Very early in my career, I understood that my passion was building fintech products by combining finance and technology. I was born and grew up in Uzbekistan, a country with a developing economy but far behind the world in terms of fintech or at least I thought so until the moment I started learning deeply about fintech companies in developed countries like the UK, USA, and EU.
We often think developed countries are far advanced in fintech or digital banking because all the modern technologies are in these countries and their regulatory systems are also advanced. However, if we dig deeper we can see that developing countries are far advanced in fintech particularly embedded finance which is the future of finance including neobanking, payments, and others.
Due to lack of technology and outdated regulatory systems companies in these countries have to find other ways to innovate and develop products for customers. For example, in Uzbekistan we already use payment services on our favorite messengers, we can make peer-to-peer transfers without leaving the chat.
In the middle of the pandemic to be exact in June of 2020, I was offered to lead the product and marketing team of a new fintech startup that is planning to bring embedded finance and lifestyle banking to the UK market. At that time I was already working at the leading fintech company with 5.5 million customers and the widest range of products in the local market and I was excited to use my experience and skills in the UK market.
As a product manager, I like to find simple solutions to complex problems and I thought the UK customers at moment need fintech solutions that combine most applications they use into one and embed finance into their daily lifestyle and make finance invisible.
I accepted the challenge and joined the founders in their journey.
So, I was a mini CEO of product development and marketing which was very exciting and challenging. Let’s look at how product teams at fintechs differ from those at big banks and tech giants.
- Expert in everything
People in fintech product teams also need to be experts in areas outside of their daily job, such as regulation and compliance. The need for this is much greater in financial services than in, say, social media or retail, because of the potentially dire consequences if you get it wrong.
- Scaling challenge
As we focused on embedded finance we needed to have a strong emphasis on scaling and this both in terms of marketing and technology. Tech teams should be able to build systems that handle the high frequency and high volume transaction volumes and data transfers.
- Be a customer of your product
‘Dog fooding’ is a common practice in product teams that encourages teams to use their product or service as a customer would. Unlike product teams at big banks with their high level of bureaucracy, teams at fintech companies are more agile and are quite fast in adapting and changing the system quickly and in embedded finance, this is even more important.
I started to form my team, product, and marketing team based on these factors so that we can achieve our goals and bring new experiences to the new market. Taking into account I was working remotely still in Uzbekistan the task seemed impossible at the beginning but when I divided every task into small pieces and started working on them I was able to finish them one by one and bring the plan into realization.
I believe the right attitude and determination are key to success. I always try to follow these principles and so far have achieved most of my goals. I recommend product managers to determine their core principles and follow them and they will achieve their goals.
