Brands can make or break you

10 years ago, the GFC opened the chapter on a decade that has seen dramatic disruption and what feels like unprecedented change – in Australia, for example, the community has now seen these events crescendo with a Royal Commission into banking practices. Consequently, fundamental questions with long-term implications are being asked of financial services businesses and brands the world over.

Caught in the crossfire is Afterpay, one of a new breed of fintech brands leading the way in the lucrative buy-now-pay-later sector – first in Australia, now with its sights set on rapid expansion in the US and UK markets.

From retail to healthcare and more, Afterpay customers have taken advantage of the digital payments platform to help them 'manage their budget’. One welcome example is the incredible surge in new patients visiting dentists in just the 8 weeks since Primary Health Care began offering Afterpay’s service – clearly a positive step if it means people are able to find more manageable ways to access all-important healthcare services.

However, the Afterpay brand is also having to shield itself from criticism for causing ‘financial stress’ and the buy-now-pay-later sector at large is facing serious calls for reform. In helping people satisfy their immediate needs while delaying payment, Afterpay has earned nearly a quarter of its revenue from late payment fees – that’s AUD $28.4m, up from AUD $6m last year, and a clear signal that many of its customers are not in fact able to manage their budget after all.

In this climate, Afterpay’s mantra of ‘Eat. Sleep. Afterpay. Repeat.’ could well see the brand fall foul of consumer sentiment as people start to look for more from their tech-oriented brands. This year’s FutureBrand Index shows cross-sector declines in the tech sector and indicates a longer-term trend that while technology brings change and new experiences, the point and purpose behind it is sometimes less apparent. In other words, can we always trust tech brands from Facebook to fintech with change for the better?

Now more than ever, the ease of friction-free access to something as pivotal as financial security must also be balanced with responsible lending principles – not only in how we apply the law but also in how brands stay true to a meaningful purpose. In the case of Afterpay, that means making sure they do indeed ‘empower their customers’ rather than lead them into financial stress. What the FutureBrand Index shows is that you need to do more than come up with the latest technology to succeed: you have to use it to create better products, services and experiences that improve the lives of customers.

It sounds simple, but it can make or break you.