The FinTech Logo Cloud is Dead
If I asked you to say the first thing that comes to mind when I said the word FinTech, you might say a company name like Wealthsimple, or think of a logo cloud, or a digital app you use to pay for things.
And while any of those examples used to be a good answer, they no longer represent the best answer. For that reason, I think we need to stop talking only about FinTech. Let me explain why.
Logo clouds especially are increasingly less relevant in a world where embedded finance, banking as a service, and invisible payments are becoming mainstream. A FinTech logo cloud is used to define a segment, vertical, and similar types of companies.
How long do we need to continue trying to prove the value or impact of FinTech? We’ve done it. And so it’s time to move on.
I think you can safely assume there are a bunch of companies that do the same thing. There are important differences of course, but does it really matter how many there are, how many they employ, or what funding they raise? Why?
The case has been made! Does water repeatedly need to be shown to be wet?
There is no going backwards to a time when there aren't other options for a bank account, credit card, loan, or insurance product.
There is no scenario where there won’t be a better way to manage risk, deal with fraud, automate processes, or leverage data in decision making (unless the sun explodes).
There will always be new options offered by startups. Some will make it and some won't, but the power of small nimble companies who have created a better way of doing something is what all incumbents need to be continuously studying.
But FinTech can't be the only set of signals to look at. There is so much more than FinTech.
So if not FinTech Logo Clouds,
then what?
Customer ecosystems are the answer to what needs to be the next phase of study, and these should replace logo clouds.
But you now have to look farther than small tech startups, and you can't just add big enterprise providers, for signals from the market on what's possible. It would be impossible to say study “everything”, but that is what is actually needed. One way to narrow this down is to really understand your customers' needs and pains, and what “job” they are trying to do.
Customer “Job” Ecosystems
What is a “job”? In this context, it's the task a customer is trying to complete, the problem they want to solve, or the desire they want to fulfill.
For example, we buy a product to get a “job” done. Jobs are not just functional. They also can be emotional, social, and impactful.
Bottom line, people want products and services that help them get the job done:
Better
Faster
Cheaper
In less time
With better results
And always in a way that’s more convenient
The world today affords a lot of different options to achieve something “better”. What triggers the action to find “it”, is friction. Friction like having to sign a document in person, not being able to use the app to do something, being declined in your application, etc.
Looking at the customer job-to-be-done also changes who your competitors are. Your competitors aren’t just companies that make products like yours. They are any solution being used by your customers to get their job done.
That means even for the job to be done, your type of solution or product isn't the only thing they can buy. Instead of buying a home, you might rent. Instead of using cash management services from your bank, you might use an app offered by Xero or Intuit.
Embedded Finance & Customer Ecosystems
I have talked about embedded finance in a previous blog post. Finance that is embedded can be invisible and/or intuitive and added to the process (like payments). The key is it shifts the use of a financial product to the platform it is embedded in.
I predict that the combination of jobs to be done and embedded finance is the start of new customer ecosystems. This is the new type of “logo cloud” you, I, we should be studying.
Once you can accomplish a number of jobs-to-be-done within an ecosystem, the opportunity to consolidate jobs and use one platform becomes very appealing.
JTBD Logo Clouds
There will be many customer ecosystems that will help your customer to get their job or multiple jobs done in a way that is better, faster, easier, cheaper or delivers more value.
The question I really want you to spend some time considering is: Do you become part of other ecosystems, or create one around your customer?
Yours truly,
Sue
Chief Change Catalyst | Firefly Growth