Trust as a Fintech Commodity
Written by Sashreka Pillay
The Patreon business model is my new obsession. (Don’t worry I get out much more than it seems.) Patreon is often described as crowdfunding for creators but this explanation doesn’t grab me. It’s cleverer than that.
The name is a throwback to the concept on which this community site has been built – patronage for artists and creators. It works like this: You have a podcast show. You need funding to keep producing each episode. It’s your passion project, but a passion that doesn’t pay the bills. You register on Patreon and create a tiered contribution structure which sets out how people engage with you and pay for your services. At each level you decide what value you will make accessible to those who contribute.
This is where the crowdfunding analogy stops. Contributions are made monthly by your “patrons”. In a traditional crowdfunding model, the contributions are made over a finite period of time and are driven by once off rather than serial activities- creating an urgency to contribute. This is why crowdfunding campaigns work best when you produce a product.
In my analysis of the very successful accounts, one of the factors which is most common: They have built unwavering trust with their patrons. (It also hinges on finding their micro-tribe and valuing their content correctly but that’s another conversation altogether.) Because they have a passion for their work, the work they create is authentic. They also carry an amazing respect for the patrons in their care. They build trust, connection and spur consumers of their content to action: a monthly contribution.
So, how does this relate to fintech?
The financial system is based on trust. Fintech firms are part of the financial system. In the same way that content creators have engendered a visceral trust from their patrons, fintech firms should work to create the same sentiment in both the financial institutions with which they want to partner and customers they are looking to serve.
The unfortunate nature of trust is that it is elusive and difficult to quantify. It’s also comparative in nature. For example, it’s not uncommon to hear a customer say: I trust Stripe more than I trust any other payments firm. This unique characteristic makes trust a quality that’s traded. It makes it a commodity. A freakishly risky commodity, but still a commodity.
Building trust is not easy for a content creator and it is definitely not easy for a fintech brand. Being consistent on the fundamentals goes a long way: quick turn-around time on customer queries, regular communication and follow-through are good examples. The element I believe takes a firm the extra mile is relationships and connections. Spending time creating scalable ways of doing this is one of the best investments of resources – just ask content creators on Patreon receiving monthly contributions from patrons who trust them and they trust in return.
Until next time,
P.S. Remember to share your thoughts with me on this article or anything fintech/innovation related - always open for the feedback. If you enjoyed this article and would like to read more from myself and others on the Matchi team, please visit: https://matchi.biz/news