Editor’s note: The following was written by a guest blogger. If you would like to write a piece for our blog, contact [email protected]
Learn what’s unique about fintech, customer mindsets, and
the unique problems and opportunities
Are you looking for a lightweight introduction to product management in fintech? Have you wondered why shipping fintech products takes more time than shipping other products? Or have you ever asked, “what sets fintech product management apart from other product management jobs?”
If the answer to any of the above questions is “yes,” this article will help you understand some of the foundations of fintech product management. Of course, this is a broad topic, so I will limit this post to topics that are critical but not as frequently discussed as I would like them to be.
Fintech Essentials and the Fintech Landscape
For most people, money is an instrument or a mechanism to trade in exchange for goods and services. Money is translated mentally into “incoming money” and “outgoing money,” or income and expenditure, respectively.
We can further break down this concept of money into a few categories.
Some of these categories involve spending money, such as “Borrow.” When people don’t have enough money on their own, they borrow. They do this either to make ends meet or to fulfill their aspirations, such as buying the desired item or using credit to grow their business. On the other end of the spectrum, investing puts your money to work. When you invest, your money makes more money on your behalf.
But the visual above does not present the full picture. Here’s a much better view of the fintech landscape that takes into account mental models of dealing with money, as well as infrastructure, regulations, methods of transacting, and more – all of which can influence your customers as they navigate the fintech landscape.
You might also be interested in: Founders, Failures, and Fintech with N26 Product Manager
The Fintech Landscape
For more about fintech, I encourage you to listen to this conversation between Alex Rampell and Frank Chen. You can also learn more about mental models in the section below.
Customer Mindsets When Dealing with Finances
Regardless of the products you are building, you should be able to answer these questions:
- What am I solving?
- Why am I solving this?
- Who am I solving this for?
Once you know the answers to these questions, you’ll be better equipped to design a product that meets your customer’s unique needs.
One critical aspect of building financial products is the customer’s mental model or the “jobs to be done” with their money. While not every fintech product needs to address these aspects, this is a glimpse into the mindset of those either living paycheck to paycheck, and/or those striving towards a stable financial future. If you are further interested in this specific topic, especially as millions of people are dealing with the COVID-19 crisis and its financial impact, I highly encourage you to visit the Financial Health Network and the US Financial Diaries.
One major contributor to someone’s financial health and their attitude towards money is debt. Here’s a view of debt from the beginning of the 20th century to the early 21st century. If you follow the yellow versus blue graph, you will see that average savings haven’t changed much, but debt has skyrocketed.
Debt in the United States
Money is a cause for pleasure as well as pain — for those who struggle with debt, ‘money’ is not onlysimply a tool, it’s also a factor that induces stress, anxiety, and embarrassment.
Further, a customer’s “jobs to be done” could be something emotional like “I want to make investments on social causes that are interesting to me, but more so I want to appear cool to others.”
Note: this is not to argue that a meaningful product needs proper attention to all quants and/or quals. But hopefully, you see the nuance here in building financial products.
People also behave quite differently when dealing with money depending on their circumstances. Here’s a teaser on behavioral economics.
A better understanding of behavioral economics will reveal how your financial products work in the hands and minds of your customers.
I’ll wrap up this post with some quick tips on what to consider when building financial products. Please note this is not a comprehensive list and your regular management frameworks still apply here.
Meet the Author
Ram Alagianambi is a Head of Product Membership Platform. He is an analytical, data-driven Product Leader who is adept at building exceptional products with customer focus, business acumen, and technical excellence. He is truly passionate about solving customer problems and driven by learning new things along the way. Ram began his professional career as an Entrepreneur Engineer where he has developed product strategies, communicated with customers, conceptualized and embraced new technologies and delivered on multiple products.
During his lucrative career that spanned over 17 years, he has gained versatile experience in industry verticals ranging from Marketplaces, Fin-tech, Payments, SAAS, Mobile Apps, e-Commerce, Data Science – Machine Learning and cloud applications from some of the best-known brands in the world, including Microsoft, Amazon, IBM, Intel Corporation, and HP.