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Fintech, Disrupted

By Lindsay Cottman

Ice cream cones melting on the hood of a car. Afghan hounds in stylish surrounds. Millennial-pink Jell-O sculptures swaying in slow motion. What may sound like the makings of a David Lynch film are, in fact, the result of a careful brand re-boot. Although campaigns this quirky are typically reserved for consumer brands on the bleeding edge of cool, Swedish-based Klarna is in one of the least “cool” spaces there is: digital payment technology.

Financial brands have historically relied on conservative campaigns, and brand identities, to reach their audience. These traditional approaches signaled the reliability and trust that customers desired from the brands handling their money. Klarna, and fun-loving fintech peers such as Qapital, are rapidly winning away that trust, begging the question: are consumers and businesses looking for something different from their bank?

In 2005, the term “fintech” didn’t exist. Klarna entered an industry dominated by PayPal and credit card giants, and Klarna’s ambitions to revolutionize the e-commerce payment market seemed foolish at best, doomed to fail at worst. In fact, when the young startup’s three co-founders entered their idea into the Stockholm School of Economics’ annual entrepreneurship competition, they didn’t come close to clinching the grand prize. Fast forward to 2018, and Klarna is valued at $2.5 billion with aggressive plans for expansion into new markets, as well as plans to roll-out its very own payment card.

Klarna’s recent velocity can be attributed to the company’s rebrand, which transformed its bland blue-and-white visuals, initially aimed at B2B merchants, into a rich, playful palette clearly geared toward millennials. The company’s Instagram feed is rife with eye-catching GIFs and bizarre videos verging on high art (see Exhibit A: Klarna’s viral “mermaid dog”). Minimalistic emoji-like icons pepper its website, as does the triple O-ed “smoooth,” a spelling and concept coined by Klarna itself.

For a long time, though, Klarna just looked like any other financial brand. Historically, financial firms have engendered public confidence in their services by projecting an aura of stately, old-fashioned professionalism. Everything from a bank’s logo to its ad campaigns to the physical space its branches occupy is almost always muted, calculated, and boring. And according to Lloyds Banking Group’s CEO Antonio Horta-Osorio, in the wake of recessions and scandals, boring is exactly how banks should be portraying themselves.

Even companies that offered disruptive technology, such as PayPal, followed this approach. Its simple design, and blue and gray color palette would meld perfectly with any bank. Klarna embraced the same approach initially, with a safe, blue logo that sat somewhere between community bank and insurance provider on the design spectrum.

On the surface, Klarna might appear as if it’s simply trying to attract fanfare with flashy visuals and irreverent marketing. But Klarna’s CMO David Sandstrom understands the need for emotional resonance, and his perspective on the customer experience was what inspired the Smoooth campaign in the first place. By building a brand users can relate to, and by presenting content that reaches beyond the payment platform’s product features (and beyond fintech at large) Klarna is creating a memorable and truly original experience.

Authenticity is foundational to trust. And trust is foundational to any financial service. However, events like the savings and loan crisis of the 1990s, and the 2007-2009 recession have eroded the implicit trust long given to financial institutions. More recently, the Wells Fargo debacle, in which employees created millions of fraudulent accounts on behalf of clients without their consent, and the Equifax breach that compromised 143 million people’s personal data from credit reports, only wreaked further havoc.

The headlines provide a clear understanding of why Americans’ implicit trust in large financial institutions is at an all-time low, and why simply relying on historical fidelity won’t get a new market entrant very far. In fact, American confidence in banks has fallen 22 percent in the past decade (down to only 27 percent).

Any business or individual wants to trust the institutions handling their money. But, that trust has evolved from being implicit in the institution to earned through an authentic, meaningful relationship — just as two individuals develop trust.

Branding like Klarna’s does more than demonstrate it isn’t thinking like a bank; it signals a personality-driven relationship that its customers can connect with on an emotional level.

When a brand’s personality is revealed through story-driven marketing, and is at the forefront of everything it does, people can’t help but feel an emotional response — a response that borders on what we feel for our closest friends. Studies abound on the science of storytelling, and the results unequivocally prove that stories move us. Paul J. Zak, a professor at Claremont Graduate University and president of Ofactor, Inc. has long studied how stories change our attitudes, beliefs, and behavior, and the fact is: stories foster social cooperation and break cultural barriers, meaning that storytellers themselves stand to benefit from the favorable connections their stories create.

For this new wave of fintech brands, cultivating an authentic personality through story-driven marketing is only the beginning.

Traditional banking brands’ strength has always been the retail footprint. A physical branch in the community, and a friendly face behind the counter, was a powerful counterweight to the advances and convenience of technology. But as traditional banks have willingly surrendered this powerful advantage, fintech has stepped in with its own ways of curating community, and thus relationships.

Monzo, a digital, mobile-only bank based in the United Kingdom utilizes a community platform “where Monzo users come help to build the bank of the future.” The community is at the “heart and soul” of everything Monzo does, and it goes beyond giving the appearance that the company cares — it has the added benefit of providing regular user feedback, which the company can use to enhance its product and the brand itself. By cultivating this community, Monzo effectively engages its users and encourages them to communicate not just with the brand, but with each other.

We like to think our decisions about money are rooted in rationality. But the reality is emotions play a gigantic role. Before working with Woden to craft its brand story, banking app Qapital recognized its messaging was failing to strike an emotional chord. Until clarifying its story, Qapital spoke about its services much like any other financial app: users could deposit money, transfer funds, and manage investments. Equipped with a narrative about empowering users to gain newfound control and perspective on their money, Qapital was able to foster closer connections with customers, and revolutionize their banking experience.

From Klarna’s offbeat marketing, to Monzo’s community-building, to Qapital’s commitment to helping transform users’ habits for the better, these efforts are successful because they arise from authentic brand personalities. It’s also why TransferWise’s pointedly anti-bank language appeals to customers and draws a clear line between the brand and traditional banks. Phrases like “No skyscrapers. No suits.” and “Bye-bye bank fees, hello world” make it clear TransferWise has its own personality.

This language is a touch snarky, but it provides a sharp contrast to the messaging of traditional banks. Because of the customer experience (and controversy) legacy institutions have created, slogans such as “America’s Most Convenient Bank,” or “Together We’ll Go Far” ring more ironic than authentic.

While campaigns like Klarna’s might be a bit “out there” for some consumers, the brand succeeds at being authentic in its own right. By eschewing the outdated tactics employed by traditional banks in favor of portraying a genuine — albeit quirky — personality, companies like Klarna will be rewarded in kind by users who trust its authentic voice.

Whether a bank, a fintech company, or any other business trying to build lasting trust with its audience, this new approach employed by Klarna is a guide for fostering that kind of connection and dedication. The rules of trust-building have changed. Institutions and establishments no longer have the power that they used to, and traditional campaigns are not strong enough to win hearts and minds.

Instead, what’s required for success and genuine trust is an authentic brand that makes every customer, whether business or consumer, feel like they are part of real relationship.

Lindsay Cottman is an associate at Woden. Whatever your storytelling needs may be, Woden can help. Read our extensive guide on how to craft your organization’s narrative, or send us an email at connect@wodenworks.com to discuss how we can help tell your story.