The myth of differentiation

In almost every boardroom strategy session or brainstorm Zoom meeting, there’s one word that always seems to pop up:

Differentiation.

Everyone agrees on it and knows you need it.

But how often has anyone been able to explain it? I’m guessing hardly ever.

And even fewer have been able to get it right.

The reason for this is that being different isn’t the same as being meaningful.

‍

Why “different” always seems to fall flat

Most financial businesses still fail at the ‘being different’ bit. This is because most feel they don’t need to be different in the first place. It has worked in the past, so it can work in the future, right?

But failing to adapt simply results in stagnation at best or, far worse, consistent loss of business.

For those who do attempt it, many companies chase surface-level ‘differences’.

They design quirkier ads. They write punchier headlines. They launch features that are shiny, but not strategic.

Psychology calls this the fluency heuristic. It’s where our brains prefer ideas that are easy to process and connect with something we already value.

If your difference makes you harder to understand, or worse, harder to trust, it backfires.

​

Example: Monzo vs Revolut

Take the early neobanks.

Monzo’s bright ‘hot coral’ card was different. But what mattered more was that it signalled differentiation in the form of transparency, accessibility and a break from the grey, bland sameness of high street banking.

Revolut, meanwhile, leaned on a more sleek design and multiple app features, such as multi-currency spending, international transfers and tools for investing. Different, yes. But the difference resonated most with a particular identity: people who wanted to see themselves as global, tech-forward and financially savvy.

‍

‍

Both didn’t just ‘stand out’, they secured their difference with psychology.

​

Why being different isn’t enough

There’s a big trap that a lot of financial brands fall into. From my experience, most financial brands think of differentiation like fashion.

Change the colours. Tweak the look. Make a big noise.

But people don’t buy noise. They buy clarity. They buy identity. They buy safety.

Distinctiveness must connect to deeper human needs:

• Competence (Does this make me feel capable?)
• Autonomy (Does this give me more control?)
• Belonging (Does this signal that I’m part of the right crowd?)

If your ‘different’ doesn’t trigger one of those, it’s just decoration.

​

The danger of short-term campaigns

Think about all those fintechs that run meme-heavy ad campaigns or the asset managers who try to look ‘edgy’ for a quarter.

Their attention may spike… but the memory soon fades.

This is where psychology warns us about the von Restorff effect – the tendency to notice the odd one out.

Being unusual does get you noticed but only if you’re also relevant. Otherwise, you’re the brand that could only be remembered for the wrong reasons.

Noticed, but not respected.

‍

How to make difference meaningful

‍

1. Signal safety through clarity. Differentiation for financial businesses doesn’t mean being louder. It means being clearer. A prospect who understands you instantly will trust you faster than one dazzled by your quirkiness.
2. Anchor difference in identity. Show how your product reflects who your customer wants to be. Wealth managers who speak to “future shapers” are doing more than selling returns, they’re selling self-image.
3. Be consistent. Short-term difference looks like a gimmick. Long-term difference builds distinctiveness. Vanguard is a great example here: quiet branding, but principles consistently focused on low-cost, reliable investing.
   ​

Final thought

In finance, being different for its own sake is like shouting in a crowded room during a presentation at a fintech conference. You might get noticed but you won’t get remembered for the right reasons.

True differentiation isn’t about zigging when others zag.

It’s about connecting your distinctiveness to clarity, identity and long-term trust.

Speak soon

‍

‍