FinTech Should Borrow from Big Pharma: Communication Lessons from the Synapse Aftermath

The interconnected nature of today's world means that negative publicity can have widespread repercussions across entire industries. The recent scandal involving Synapse, a company providing banking infrastructure for fintech firms, caused significant losses for its customers and intensified scrutiny on the FinTech sector. The FinTech industry, already grappling with a negative stigma surrounding "payroll loans" and "predatory lending," now faces even greater challenges in establishing trust and credibility.

When faced with industry-wide negative sentiment, companies need robust strategies to protect themselves from spillover effects. A historical example that provides valuable lessons is the 1982 Johnson & Johnson Extra-Strength Tylenol crisis. Following the tragic cyanide-lacing incident, widespread fear and mistrust affected over-the-counter medications. Johnson & Johnson's major competitor, Advil, was also impacted but strategically gained from the situation. Pfizer's adept crisis management and strategic marketing played a crucial role in Advil's success during this period.

Pfizer's approach involved proactive communication, highlighting safety measures, strategic marketing, and leveraging third-party endorsements. They reassured customers about Advil's safety, provided detailed information about their rigorous safety protocols and quality controls, and launched targeted marketing campaigns to emphasize Advil's reliability. Additionally, they sought endorsements from healthcare professionals and industry experts to restore consumer confidence and reinforce trust in Advil's safety and effectiveness.

For FinTech companies, the key takeaway is the necessity of a consistent and long-term communications strategy. In an industry challenged by negative perceptions, particularly around unethical lending practices, being prepared with a solid plan allows companies to respond swiftly and effectively to crises, thereby minimizing damage and potentially even gaining a competitive edge. Both Pfizer and J&J demonstrated the value of such an investment.

It's important to note that implementing these strategies is not exclusive to large corporations. Small and medium-sized enterprises (SMEs) can also afford to adopt and sustain effective communication strategies. The advent of outsourcing options for roles like Chief Public Relations Officer and the use of Generative AI (GenAI) tools have made these strategies more accessible and affordable for SMEs. These resources allow SMEs to maintain consistent communication, build trust, and prepare for potential crises without the overhead costs of a full in-house team.

Drawing a parallel to buying insurance, a robust communications strategy is something you don’t think you need until you need it. This is particularly crucial in fast-paced industries like FinTech, where the speed of innovation is rapid and competition is fierce, much like in the pharmaceutical industry. Investing in a strategic PR plan not only protects against potential crises but also enables a company to gain market share by reinforcing trust and reliability.

In an age where public perception can make or break a company, investing in strategic communications is not just a defensive move, but a proactive one that ensures long-term success. FinTech companies must differentiate themselves from the negative stigma by adopting transparent, ethical practices and communicating these values clearly and consistently to the public. Only by doing so can they build lasting trust and credibility in a skeptical market.