Realizing how much has evolved in the last year, I took a few minutes to reflect on how far the financial services industry has come and how we can use those learnings to build businesses and brands that outlast us. Financial institutions are having to think through new strategies to differentiate themselves as they fight commoditization and address new challenges around expanded customer needs.
Personalization is table stakes
As more of our financial infrastructure moves to digital, financial institutions have had the flexibility to build new, innovative services. The result has been beneficial for everyone, especially the consumer. Financial institutions have the opportunity to reach niche markets and provide products, services and even advertising that meets very personal goals. I’m seeing this across all industries—fintech, real estate tech—personalization is the table stakes to capturing any kind of customer.
The transformation to a more personalized world is happening rapidly. Ten years ago, businesses had all the incentive in the world to build products and services for the masses; niche audiences were just too hard (or too expensive) to reach. Today, I can’t imagine having to navigate brands or products that weren’t designed specifically for my needs, ranging from being able to buy a customized couch the exact right size for my living room, to a fully curated playlist based on the listening preferences on my music streaming service.
The risks are diminishing
Historically, many financial institutions with a large geographical footprint built products and infrastructures for the masses. However, with the internet, much of what used to be considered massive upfront costs are now variable costs that can be scaled over time. So while financial institutions might previously have focused on capturing the widest possible market to recoup massive fixed costs, today our partners have the freedom to capture the vast majority of a niche market, which is still really big!
It’s an exciting time to be in the industry. Our partners are working on bringing a generation of consumers into our financial infrastructure. They’re helping to enable merchants to quickly (and cost-efficiently) accept payments from people in safe and more reliable ways. And they’re helping to lower the barrier for people to build their own wealth, whether through real estate, the market or decentralized finance.
An opportunity for all
Luckily, we’re also in an industry where no one can be counted out. There’s an opportunity for all players in the industry to participate in this trend, whether they've been founded just a few years ago or have been servicing customers for decades. As money and servicing increasingly becomes digital, it’ll become easier for long-standing brands to reinvent themselves. At Facebook, we are building resilient solutions that help our partners understand the value of their investment. By lowering their costs, all advertisers can afford to provide services to the people they care about most.
To hear more about how our partners are building strategies for the future, check out our Money Clip video series, where we share insights from the most innovative leaders in financial services, to gain knowledge of their approaches to learning from the past and preparing for the future.