Product-led growth will power the future of SEA’s fintech firms

Southeast Asia’s fintech sector is reaching an inflection point.

While the region’s consumers are no stranger to innovative financial services, competition in the market is becoming tougher than ever. Indonesia, for one, had some 48 licensed e-wallet operators in 2021 alone.

“Fintech companies face a unique challenge in that their specific industry is highly saturated – there are many products built to do the same thing,” says Mark Velthuis, vice president of Asia Pacific and Japan at digital analytics firm Amplitude. “This poses even more of a challenge for them with retaining or attracting new customers and users – they need to continuously improve their product to keep users from turning to alternatives.”

Mark Velthuis, vice president of Asia Pacific and Japan at Amplitude / Photo credit: Amplitude

Southeast Asia’s fintech sector is also starting to mature. Customers have higher expectations and more exacting demands, and investors are keen to find out “if the bets they made years ago have stood the test of time,” he adds.

All this, combined with the ongoing macroeconomic uncertainty, means that fintech companies are in a tricky situation.

“They will need to carefully stretch every dollar, while still keeping customers happy by not just meeting but exceeding their expectations,” says Velthuis.

The right kind of growth

This begs the question: How can fintech firms in Southeast Asia accomplish this difficult task? According to Velthuis, the answer lies in product-led growth.

The term, which was first coined in 2016, refers to a go-to-market strategy that relies on the product as the main vehicle for business growth.

This means that instead of spending a fortune on marketing, companies instead focus on building great products that essentially “sell themselves” because they truly meet user needs.

Photo credit: allensima / 123RF

“The product becomes your distribution channel, competitive advantage, and driver of customer loyalty,” explains Velthuis. “It operates by creating deeper engagement with customers who find immense value in the top-tier product and keep coming back for more.”

For fintech companies, this could mean building straightforward onboarding processes that get users to make their first transaction and see the value of the app as quickly as possible. Personalized features, such as having a customer’s most frequently used functions accessible from the home page, could also do the trick.

According to Velthuis, product-led growth allows businesses to focus on development and making the best possible offering that they can. “By analyzing what customers find valuable through continual product development, businesses can deliver personalized experiences that drive growth and retention.”

Indeed, according to Amplitude’s Product Report, fintech companies across the globe that have doubled down on product-led growth were able to successfully retain customers in the face of fierce competition and larger macroeconomic headwinds.

The devil is in the data

With product-led growth focusing very much on the customer experience, data is a crucial part of the process.

However, this is often where companies stumble. Many fintech firms are sitting on mountains of user data, but they aren’t able to leverage these effectively. This means that the decisions they make in terms of product development may not be backed by accurate information, and they could be wasting time, effort, and money building things customers don’t need.

“Many [firms] are operating blindly, as they don’t know how to capture the right product data or ask the right questions,” shares Velthuis.

This is where product management and analytics solutions come into the picture, enabling companies to synthesize the plethora of data they have into understandable and actionable insights.

An example of how this can make a difference is US-based NerdWallet. Founded in 2010, NerdWallet is a financial information platform that offers services like credit card comparisons and personalized financial insights. As the company grew, it found that it needed a shift in its product strategy to work more effectively.

Photo credit: NerdWallet

To do this, it turned to Amplitude’s product analytics platform, which allows a company to monitor a product’s real-time performance to gain a better understanding of user behavior. Through the platform, NerdWallet was able to identify areas of friction on its mobile platform, an important part of its business given that users access many services via their smartphones.

The firm observed that mobile users were 2x less likely to click through links than web users, which sparked an investigation into how to best lay out its mobile interface. NerdWallet subsequently tested different versions of its mobile platform and used Amplitude to measure the user response in real-time as it experimented with various approaches.

An example of Amplitude’s platform / Photo credit: Amplitude

The ability to see reactions in real-time helped NerdWallet refine and adapt its product quickly and saved the team from spending time on a solution that might not have worked. As a result, the company increased its click-through rates on mobile by 200%.

“Our analytics platform helps businesses understand what drives engagement, conversion, and retention,” says Velthuis. “In doing so, we help them capture data they can trust, uncover clear insights about customer behavior, and take faster action to drive growth, loyalty, lifetime value, or whatever business outcome they need.”.

Find your north star

As fintech continues to mature and customer demands continue to grow, Velthuis reminds companies that, above all, they need to remember their north star: the team’s key measure of success.

“A north star metric gives organizations clarity and alignment on what they’re optimizing for. It must be derived from a true understanding of what action provides realized value to the customer,” he says.

While the road ahead may be a challenging one for fintech startups, Velthuis is confident that, with the right approach and customer centricity in mind, they’ll be alright.

“Businesses will need to start putting customers at the forefront of their product strategy, delivering exceptional digital experiences that keep users coming back,” he concludes. “This is what will drive growth.”

Amplitude helps businesses optimize the value of digital product innovation to thrive in the new era.

Get started on driving product-led growth in your business and learn more about how Amplitude works via its demo.

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This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.