It is no secret that fintechs are facing a myriad of challenges these days, from cybersecurity threats to constantly shifting regulatory environments, and increased competition. More than ever, these organizations need a way to effectively communicate and disseminate information not only with their customers but with employees and stakeholders as well. So, we’re going to discuss below how public relations agencies can help fintechs do just that and navigate them through the current crisis they are facing.
1. Cybersecurity breaches and customer data breaches
Banks and financial service providers are data-rich and among the top targets for data breaches. According to The Economic Times, major cyberattacks threaten 98 percent of the top 100 global fintech organizations (phishing, identity theft, data breaches, among others). However, cybersecurity continues to be a big blind spot for organizations across the spectrum. How a business communicates post-data breach can influence the valuation of the company and affect customer trust. When a cyber hack occurs a huge amount of brand reputation is on the line – and a communications team can help protect your brand’s image.
It’s important to be proactive rather than reactive when it comes to cybersecurity. Having a cyber response plan in place ahead of time that aligns your security and leadership teams with a communications team is going to be the key to success. Most companies loop in communications teams after an incident where they can only do damage control, so it is important to make sure that they have a seat at the table ahead of time.
2. Regulatory challenges
As evidenced by the recent SEC lawsuits against Coinbase and Binance, crypto regulation has been hazy in the past. As crypto is a relatively new asset class, regulators are working around the clock to enforce regulation on crypto companies. Now is the perfect time for crypto firms to return to the basics and focus on business use cases and proper messaging.
It is especially important that risk is properly communicated to consumers. Markets also love those assurances of safety and security, so it’s crucial now that crypto companies go back to simplified marketing that focuses on the value that they provide. Crypto companies used to go for huge mass market appeal, like celebrity endorsements or stadiums named after them (FTX and Crypto.com Arena). These tactics may be a thing of the past, though, and communications agencies can help these crypto companies hone in on their target audiences and value propositions.
3. Financial instability
Fintechs and tech companies have been struggling across the globe in this current economic downturn. According to Crunchbase, more than 155,589 workers at U.S.-based tech companies have been laid off in mass job cuts so far in 2023. The months and years ahead are sure to be difficult for business owners in the financial services and tech space. Keeping your brand top of mind through public relations is one of the most important things that you can do in times of economic hardship.
Here are a few benefits that PR can provide in a down market: build top-of-the-funnel awareness and visibility in the space, secure organic media coverage, build brand credibility through channels like thought leadership and speaking opportunities, and discover more about your target audiences.
4. Competition in the space
Today’s fintech startups must compete with mega-corporations like PayPal, Zelle, Amazon, and more. According to The Fintech Mag, 75% of VC-backed fintech startups crash. For fintechs to survive in this ultra-competitive environment, it is crucial that they stand out from the crowd and effectively communicate the differentiators from their competitors. It is not necessarily about having a large reach but reaching customers who will benefit from your products and services. A good PR team can help put in place unique campaigns that will help your business gain notoriety in both the national and industry media. A good comms agency will also be keeping a close eye on your competitors to learn from their marketing and PR efforts.
5. Reputational damage
Reputational damage can happen to any company. For example, Ledger faced backlash this year for its recovery feature– creating mistrust in the company among its users. A communications firm can assist by protecting and rebuilding a fintech’s reputation when faced with bad news. PR pros are skilled in crisis communications, monitoring news coverage, social media conversation, and online discussions which are all important when a crisis breaks out.
By leveraging their expertise in crisis communications and public relations, PR agencies can play a crucial role in helping fintech companies deal with and mitigate the biggest risks that they currently face.
