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How fintechs can win at rebundling

Don’t try to be ‘everything to everyone’.

By Steph Bailey

Being a successful fintech used to mean being the best at one thing — a tailored solution solving a particular financial challenge better and cheaper than a bank. 

This meant ‘unbundling’ traditional bank services, and fintechs emerged that specialised in only mobile payments, managing funds or savings. But now, thanks to an evolved and highly competitive market, fintechs are now rebundling it all back up again.

“When the real fintech boom started, maybe 10 plus years ago, those fintechs were quite niche and really good at that niche,” says Denise Johansson, cofounder of card issuing and payment service provider Enfuce. “Then as years went by, the number of fintechs and service operators boomed and now again the fintech segment needs to adapt.”

The big fintech rebundling” is here and competition is steep — so how can fintechs looking to differentiate themselves find their edge? We asked experts, including Johansson, Jeppe Rindom, CEO of company spending startup Pleo and Oscar Hyléen, head of communications at challenger bank Rocker, for their top tips.

1. Find a niche

“The benefits of bundling are that you serve your customer needs from a broader perspective,” Johansson says. “If you do more for your customers, you’ll most likely have more loyal customers and a higher revenue.”

“If you do more for your customers, you’ll most likely have more loyal customers and a higher revenue.”

Despite this, Johansson says the first step for a fintech wanting to offer bundled services is to find a niche.

“It’s still about finding your niche — what are you really good at doing? — and making sure you are doing that better than others,” she says. “Once you have that solved and figured out, then you start to think about the pain points around it.”

With a clear and marketable niche, Johansson says fintechs can more easily identify what its customers want from its service. For example, Johansson and her four cofounders started Enfuce by looking into pain points companies had processing digital payments.

“We started there, and rebundled our service around that,” says Johansson. Now she describes Enfuce as a “one-stop shop” for banks, fintechs and merchants. It’s since expanded its offering to include card issuing services like BIN sponsoring (Bank Identification Number — which allows companies the right to issue cards), actual cards, regulatory compliance and sustainability services. Card issuing has been an increasingly popular demand from Enfuce customers, and it’s even recently launched a guide for businesses, titled “How to launch a winning payment card”.

Oscar Hyléen, head of communications at challenger bank Rocker, says Rocker started in 2017 with the single goal of giving people total control over their loans by completely digitising the process.

It’s since expanded its services around its customers to include credit, savings accounts and payments services — like the Enfuce-powered Rocker debit card — all integrated into one app. Soon, Hyléen says, the company wants to add mortgages and insurance too.

“Most people don’t have the energy to browse around,” he says. “If you want to reach this average type of consumer with a steady income, younger to middle aged, I think you really have to provide everything together as much as you can in one place.”

“If you want to reach this average type of consumer with a steady income, younger to middle aged, I think you really have to provide everything together as much as you can in one place.”

2. Don’t try to be a bank

After finding a niche, it can be tempting to rebundle for the sake of it. But it’s important to stick to a customer-led strategy, says Jeppe Rindom, CEO of Pleo, which issues company cards also powered by Enfuce. 

Pleo found its niche by offering a solution which alleviates painful company expense systems. Rindom says this strong foundation allowed the fintech to add new features, such as automatic receipt capture and cash tracking, to tackle challenges beyond expenses. 

However, Rindom says many fintechs fall into the trap of trying to become an ‘everything for everyone’ bank.

“We’ve always had the ambition to become an all-in-one spend management solution but we’ve never wanted to become a bank, simply because that’s not what our customers need from us,” he tells Sifted. Customers want to feel their needs are being catered for, and their problems genuinely solved, not used as an opportunity to simply upsell a new product.”

Customers want to feel their needs are being catered for, and their problems genuinely solved, not used as an opportunity to simply upsell a new product.”

Johansson agrees bundling services like a bank should not be a goal, as fintechs can and should offer more specialised products for specific customer segments.

Johansson uses her Apple watch as an example. She says: “As my bank didn’t offer Apple Pay, I turned to a fintech who did. I’m not looking to change banks, so I’m not expecting the fintech to bundle and offer full banking services. But, of course, my main bank did lose my everyday spending as I’m nowadays a 100% tap-and-go person with my watch.”

3. Finding the right partner is key

In order to bundle together multiple products and offer them to customers at a competitive pace, Hyléen says fintechs should actually work strategically together. 

“Some things we build ourselves, for other products we collaborate,” he says, noting Rocker’s collaboration with Enfuce that allowed the company to launch prepaid payment cards.  

“Some things we build ourselves, for other products we collaborate.”

Similarly, Rindom says there are areas Pleo can’t yet support: ”This has seen us integrate with accounting software, such as Xero and digital receipt business Flux, to complement our offering.”

Hyléen says collaboration allows fintechs to stay competitive and relevant, without using up too many resources. 

“The main hurdle for a lot of players is that if you go forward with the strategy to build everything yourself, then you’ll end up in a situation where you have too high costs to innovate and develop new products. And it takes too much time,” Hyléen says.  

Hyléen says Rocker is also sourcing data from different services. By using machine learning, this data is allowing Rocker to develop services to proactively help people save more money. Ultimately a collaborative spirit will help fintechs stand up to the big guys, he says.

“Big banks, they’ve provided savings alternatives for consumers for hundreds of years,” Hyléen says. “But they have never provided people with this advice on how to save more.” 

Want to learn more about how fintechs can win at rebundling? Enfuce has published their guide on launching a winning payment card, including use cases of both Pleo and Rocker. Read it here.

Sponsored by

Enfuce's logo

Enfuce, one of the fastest-growing challenger payment processors.

Learn more here.