Growing fintech apps in 2024: 5 things I learned in a chat with Self Financial’s Paul Kovalski

Growing fintech apps in 2024 is interesting. Sort of like the alleged Chinese curse may you live in interesting times (AKA tough times). 

Consider these data points from a Boston Consulting Group report:

1. Fintech funding is down 71% since covid
2. Fintech revenue is growing 14% annually
3. Fintech has a projected market size of $1.5 trillion by 2030
4. That’s 5X growth from today (!!!)
5. Fintech’s leading lights, neobanks, are starting to cross the 100 million customer threshold
6. Fintech now has 453 challenger banks, or neobanks

In other words, funding might be drying up, and the industry seems to be approaching some level of maturity, but it’s still growing fairly fast like new markets often do. And the potential is literally staggering.

So yeah. Interesting!

Growing fintech apps

In the middle of all this, I wanted to chat with a soldier in the trenches of the fintech growth wars. His name is Paul Kovalski, and he’s currently the Growth Marketing Manager at Self Financial. 

Self was founded in 2015, has raised $127 million in funding, has helped 4 million people build their credit scores to qualify for loans and mortgages, and was named one of Forbes’ America’s Best Startup Employers in 2024. 

Kovalski has a long history of growth roles including stops at Rally, Freshly, and AdRoll, and runs his own podcast, Efficient Spend.

Hit the play button to watch our convo, and keep scrolling for the highlights:

Fintech has been a rollercoaster ride

With growth, funding, and market size numbers like the ones at the top of this post, fintech is clearly a quickly evolving space. Add covid and all the changes it brought to the mobile ecosystem as well, and you can add some ghost pepper, or maybe even a Carolina Reaper, to that already spicy mix.

“It’s been quite a rollercoaster ride for sure,” Kovalski says. “There’s been a lot of changes in the macro environment.”

He joined Self in June 2020, right in the early stages of covid, rode through the Silicon Valley Bank collapse that shook so many startups, and continues to work at growing fintech apps through the increased challenges with old-school competitors as well as new.

“It’s been really intellectually stimulating and a fun ride as well,” he says. “Exciting!”

So what characterizes the fintech growth ecosystem now?

1. Growing fintech apps: multiplatform acquisition benefits (and costs)

One of the key distinctions in fintech mobile marketing is the ability to drive acquisitions across multiple platforms. The ability … and perhaps almost the requirement.

Most games and apps have traditionally used in-app ads in other games and apps. Fintech does this too, but along with a few other verticals, has a particular ability to use both web and app for user or client acquisition. 

There’s some big benefits to that.

“We can deploy our spend to those different areas,” he says. 

That means fintech can take advantage of lower pricing on the web, or better story-telling ability in CTV. And that flexibility has big payoffs on the web when growing fintech apps: you have a greater ability to tell a story on an owned web platform after the click than in an app store listing.

But there’s also some cost:

“That brings up a lot of measurement complexity as well,” Kovalski says.

Especially when you add very traditional means of client acquisition to the mix: direct mail and out-of-home.

The big benefit: you’re looking “in a bunch of different buckets to see what the most efficient spend is.” Another one: the web supports retargeting, which allows marketers to amplify and reiterate messages over time, resulting in more conversions after initial clicks.

2. Fintech has a very different value curve

Games, especially casual or hyper-casual games, have a very steep value curve. It’s quick: you install a mobile game, start playing it, and if you like it, you’re getting value as a player almost instantly.

Same with many apps: get, use, enjoy.

Growing fintech apps, however, means working with a very different value curve: a much more gradual slope.

“With a game the value happens more immediately after downloading the app,” Kovalski says. “With fintech … the value happens over time.”

I don’t know about you, but I don’t hand over financial details after just learning about an app 10 seconds ago. That’s a reason to drive potential fintech customers to the web and sign them up to something less extreme, like an account, Kovalski says. The web is also a better place to educate potential customers about the company and the value, and provide social proof and other signals that doing business with this neobank is safe.

Then later the app starts to matter more because customers with the mobile app have direct, immediate control of their financial affairs wherever they are, and are also more valuable to neobanks or other fintech providers.

3. Growing fintech apps means you need to understand the “paid marketing fit”

Kovalski has developed his own framework for deciding where to invest marketing dollars in the fintech space. Referencing the well-known “product-market fit” that startups need to achieve to become real, profitable, sustainable companies, he calls it the “paid marketing fit.”

“Product market fit is you have to create a product that aligns with market demand,” he says. 

“Paid marketing fit is that you should be spending your dollars and aligning towards consumer demand, meaning that your first dollar spent should be on the highest demand audiences wherever they are … that’s where conversion rate is gonna be the best. That’s where your costs are gonna be the lowest, and then you can scale into these lower demand areas.”

Paid marketing fit will first align your marketing spend with those who are most likely to click, to install, and also to convert into users and customers.

Those are the segments currently experiencing the pain that your product takes away.

After that, you can probably get more customers, but they might be getting a vitamin to enhance their lives, not a painkiller that transforms their lives.

4. Humor works

About 6% of Americans still don’t have a bank, and about a fifth of those making less than $25,000/year don’t have a checking or saving account. 

That’s certainly 1 source of growth.

But there are plenty of regulations on how fintechs can approach the market and what they say in ads as well, which means that marketers need to be careful about how they construct their ads … and, increasingly, whether they allow generative AI tools to write copy, or platforms like Google App Campaigns to mix and match ad components.

(More about that later.)

But humor is often a good tactic.

Kovalski talked about building creative for growing fintech apps:

“It’s really putting yourself in the mind of that consumer and what they really need, and then speaking to them in a compassionate way about that,” he says.  “And maybe sometimes also in a humorous way too … one of the things that I found that has worked really well for talking about stressful topics or things like that is adding a bit of humor, a bit of of levity to the ads.”

As long as you avoid the potential minefields humor can bring, of course.

5. Automated ad copy and generative AI is not as good … for lots of reasons

It’s tempting and easy to just use the tools that the big ad platforms are releasing to make your ads for you. That’s potentially dangerous in the tightly regulated fintech space, however.

Plus, it’s also not as good as doing it yourSelf.

(Sorry, couldn’t resist.)

“If you just go blind and don’t look at all of it and just press yes, automate, automate, automate … you’re gonna create some shit, right?” says Kovalski. “The copy will not be as good.”

That’s particularly true on the big blue used-to-be-just-social-network, where you can use Advantage+ Shopper Campaigns for credit advertisers that will automate your ads, optimize your ads, and automatically apply “best practices” for you.

But … you can’t exclude existing audiences.

You can’t do holdout audiences.

“Then those turn into like defunct retargeting campaigns,” Kovalski says. “Marketers really need to be mindful of this stuff, right?

So: use the automation, but don’t over-use it. Generate the automated ad, but then improve it. Vet it. Make it human, relatable, humorous.

Kovalski actually uses ChatGPT for a lot of initial copy generation, then makes modifications and improvements to ensure his ads fit the brand, have some sparkle, and don’t break any regional regulations.

Growing fintech apps: much more in the full podcast

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