Why customer acquisition is so difficult for financial startups

When it comes to getting new customers, startups in financial technology are in a lose-lose situation.

It’s no surprise: The reigning banks have been around for decades so they have a large existing set of customers and streams of data on them from over the years. Their problem is they’re plagued with old infrastructure that slows them down and cuts into their ability to manage data well. Startups don’t have that problem, but they also don’t have the customer base — or the ability to scale.

Customer acquisition is expensive. For a large bank it could cost between $1,500 and $2,000 to acquire one customer, according to Ciaran Rogers, director of marketing at StratiFi, an early stage startup that helps advisors manage portfolio risk. At startups it could be between $5 to about $300 for one customer. Fintechs just have less money to spend on that — at Wealthfront, for example, marketing budgets have decreased every year.

Read the full story on tearsheet.co

https://digiday.com/?p=262330

More in Marketing

With TikTok deadline, agencies are ‘staying the course’ but prepared to respond this weekend

This time around, eight agencies and influencer marketing execs told Digiday that their general sentiment going into the April 5 deadline is more calm and confident.

More brands are blending deterministic and probabilistic data for hybrid targeting approaches

Advertisers are exploring AI-assisted lookalike modeling for new audience targeting approaches — brought on by the fading third-party cookie.