Fintech Pivots From Product Innovation to Customer Acquisition as Distribution Becomes New Battleground

After fifteen years of building novel financial products, fintech companies are confronting a fundamental shift: the hard part is no longer making something new—it's getting customers to use it.

Alex Johnson, writing in Fintech Takes, argues the industry is transitioning from what he calls "the manufacturing era" into "the era of distribution." For CFOs evaluating fintech partnerships or investments, this shift signals a change in which companies will succeed and why.

The manufacturing era, as Johnson frames it, was defined by product innovation out of necessity. Early neobanks couldn't buy off-the-shelf technology to offer automated savings or fee-free overdraft—they had to build it themselves, often convincing skeptical regulators it was even possible. Online lenders digitized entire customer journeys because no incumbent would. These companies prioritized building compelling products over customer acquisition strategy, betting that superior offerings would essentially market themselves through conventional channels like Google and Facebook ads.

That approach worked when the product itself was genuinely novel. A checking account that actually helped you save money was interesting enough to convert customers who saw the ad. The wedge product—the thing that solved a customer problem much better than incumbents—did the heavy lifting.

But here's the thing everyone's missing: most of those wedge products now exist. The technology has been built. In many cases, it's been packaged and resold by the infrastructure companies that spun out of those early pioneers, or by ex-employees who started their own platforms to solve problems they'd already tackled in-house.

Which means the next generation of fintech founders faces a different question entirely. They don't need to prove a better checking account or loan application is possible—they can license that technology. The challenge is distribution: how do you acquire customers when your product isn't meaningfully different from a dozen competitors using similar infrastructure?

Johnson frames this as a choice between "Convenience or Community," though the source material cuts off before explaining what that means. (The article appears to continue beyond what was provided.) But the implication for finance leaders is clear: when evaluating fintech vendors or investment opportunities, the relevant question is shifting from "did they build something novel?" to "can they actually get it in front of customers?"

This matters for CFOs in two ways. First, if you're partnering with or buying from fintech companies, their distribution strategy—not just their product roadmap—now determines whether they'll be around in three years. A great API doesn't matter if the company can't acquire users profitably.

Second, if you're a finance leader at a fintech company, your capital allocation decisions need to reflect this reality. The manufacturing era rewarded R&D spend. The distribution era rewards whatever actually gets customers in the door—whether that's community building, embedded finance partnerships, or something else entirely.

The irony, of course, is that this is just fintech catching up to every other industry. Manufacturing versus distribution isn't a new problem. It's just new to an industry that spent fifteen years believing the product would sell itself.