Affiliate marketing has become an immensely popular marketing strategy for companies and third parties alike for one simple reason: it works. Not only is it effective at helping companies expand their customer base, but it’s cost-efficient, too.
Affiliate marketing is used across a wide range of industries, from health and fitness to travel and hospitality. The financial technology sector is no different, and various fintech companies have utilized the strategy to attract new clients.
Referral vs. Affiliate Marketing
Referral marketing is also commonly used by fintech firms to reach new customers, and while the premise is similar to affiliate marketing, the process and execution are quite different.
Referral Marketing: You’ve likely been given the opportunity to be involved in referral marketing. Has your bank offered you a financial incentive to refer them to a friend? Has a credit card company promised you loyalty points if you get someone you know to apply for a card? This technique is known as referral marketing—when a company finds new clients via their existing customers’ contacts.
Some examples of referral marketing in fintech include Wealthfront, an automated investment firm that offers existing clients and their referrals an additional $5,000 managed for free in addition to their initial $10,000, while the financial services company Robinhood offers free stock to clients and referrals worth up to $500.
Affiliate Marketing: Much like referral marketing, affiliate marketing typically offers bonuses and incentives, but it does not involve using existing clients to attract new customers; instead, it relies on third-party platforms.
These third parties usually have industry authority and are therefore trusted by their audience. So, when they recommend a product or service, a section of their readers, listeners, and viewers will be inclined to purchase that product. In many ways, influencer marketing is a form of affiliate marketing. For instance, a fitness influencer recommending a pair of running shoes could get a small percentage of any sales made through a link to buy on their social media platforms. Or, the influencer could partner with the shoe company to offer followers a special discount code when they buy the shoes. Both methods are also applicable in affiliate marketing in fintech.
Affiliate Marketing in Fintech
Given the digital nature of many companies within the industry (digital banks, investment apps, online lenders, payment services, cryptocurrency platforms, etc.), fintech is ideally suited to take advantage of affiliate marketing strategies. The reason for this being that their ideal clients are already online and can be reached through the digital platforms they already use.
As an example, when someone searches “best investment apps for beginners,” they will be given an enormous list of results (590 million at the last check) featuring websites and blogs listing their best investment apps. These articles and blog posts will contain external links taking visitors to the website of the investment app(s). If a visitor ends up opening an account with that app, the website that created the article will get a commission from the affiliate link.
Affiliate marketing is big business, and the most influential bloggers and online influencers can earn tens of thousands of dollars every month in commission just by recommending products and services. With new fintech services and innovations constantly being launched, a person with expertise and authority—and who offers honest and unbiased reviews—stands to benefit greatly when they share their knowledge with a largely uneducated audience. In turn, the fintech service benefits from the influencer’s platform and influence.
It’s not just plucky fintech startups using affiliate marketing to promote their brand and services—major players are getting in on the action. Revolut, one of Europe’s most valuable digital banks, has invested heavily in its affiliate marketing program, which provides affiliates with the tools and widgets to effectively promote the company. Likewise, in the United States, bank holding giant Ally Financial Inc. rolled out a 45-day marketing campaign specifically for its affiliates focusing on expanding its clientele in the company’s investment and stock trading services.
Role of Affiliate Marketing vs. Traditional Marketing in Fintech
The effectiveness of affiliate marketing has led some to ask whether traditional forms of marketing are even relevant anymore. After all, if affiliate marketing costs a whole lot less and offers a much greater ROI, then why bother with expensive ad campaigns and elaborate marketing stunts?
While there is certainly an argument to be had, particularly for established fintech firms who already have a strong brand and market recognition, traditional marketing strategies still very much have a place in the financial technology sector. These strategies give companies, fintech or otherwise, the opportunity to market themselves using their style and voice, whether through ad branding, commercials, or guerilla marketing.
Perhaps, then, fintech firms are best served by combining the power of affiliate marketing and traditional forms of marketing to both establish their brand and attract new customers.