How Should We Reposition Against Substitutes in Fintech?

Direct answer: To reposition against substitutes in fintech, map the attributes your target customers actually trade off on—not the features you're proud of—then plot yourself and your substitutes (spreadsheets, incumbent banks, manual processes, or a rival app) on the two axes that most drive switching decisions. The winning move is usually to own an uncontested corner of that map where a substitute is weak and switching cost is high, rather than to out-feature a direct competitor. In fintech, substitutes are often "do nothing," "use the bank we already have," or "keep it in Excel"—so your positioning has to beat inertia, not just other startups.

Why Substitutes Are the Real Threat in Fintech

Most fintech founders benchmark against the three logos in their pitch deck. That's the wrong fight. In practice, a lending platform loses more deals to "the borrower's existing bank line," a payments product loses to "we just use invoicing and wire," and a treasury tool loses to "the CFO's spreadsheet and gut." These substitutes have zero acquisition cost, existing trust, and no integration risk.

The Competitive Positioning Map forces you to treat substitutes as first-class competitors. A substitute isn't inferior by definition—it's often "good enough" on the dimensions the customer prioritizes, which is precisely why they haven't switched. Repositioning means finding the axis where the substitute is structurally weak and the customer's pain is real and growing (rising fraud, compliance load, reconciliation cost, cost of capital).

Building the Competitive Positioning Map

The map is a 2x2 grid. The discipline is in choosing the axes and the honesty of where you plot yourself.

Step 1 — List everyone the customer could choose instead of you. Include direct fintech rivals, incumbent banks/processors, manual/spreadsheet workflows, and "do nothing." For a B2B fintech, "the customer's internal finance team doing it by hand" is often the true market leader.

Step 2 — Identify the attributes customers actually decide on. Interview or review won/lost deals. In fintech these usually cluster around: price/take-rate, speed to onboard, trust/regulatory credibility, integration depth, data/analytics, compliance coverage, and support. Don't guess—pull the language from sales calls.

Step 3 — Reduce to the two axes that drive switching. You can only plot two. Pick the pair that (a) most separates the players and (b) matters most to your ICP. A common fintech pairing: speed/ease of adoption vs. depth of financial control/compliance. Banks tend to sit high on trust but low on speed; spreadsheets sit high on control-illusion but low on scalability and audit safety.

Step 4 — Plot honestly, including substitutes. Place every option. If your product clusters right on top of a direct competitor, you have a positioning problem—not a features problem.

Step 5 — Find the open, defensible corner. Look for a quadrant where the strongest substitute is weak and the customer pain is acute. What "good" looks like: an uncontested position where your unfair advantage (e.g., faster onboarding with bank-grade compliance) directly attacks the substitute's weakness and is hard to copy.

Step 6 — Translate the map into a message and a roadmap. Reposition the pitch around the axis you win on ("audit-ready treasury in days, not a spreadsheet you pray over"), and align product priorities to widen that gap, not close a checkbox gap with a competitor.

What "Good" Looks Like, and Common Mistakes

Good repositioning is subtractive. You often win by deliberately not competing on an axis the substitute owns—for example, conceding that a bank will always be "safer feeling" and instead owning "speed + transparency" where the bank can never move fast.

Three common fintech mistakes:

• Choosing axes that flatter you ("most APIs," "best UX") when customers actually decide on trust and total cost.
• Ignoring "do nothing" as a competitor, so the whole map understates inertia.
• Repositioning the deck without repositioning the roadmap, so the new claim isn't true within two quarters.

Where Percision Fits—and Where It Doesn't

Full disclosure: I write for Percision (percision.app), a strategic intelligence platform, so weigh this accordingly.

Percision can run the Competitive Positioning Map as one of its 27+ frameworks, using your business context across a structured reasoning process to produce a plotted map, a repositioning recommendation, and a board-ready deck—typically in minutes rather than a multi-week engagement. Because it also produces financial intelligence (DCF, 60+ ratios, warning signs), it's useful when the repositioning question is tied to unit economics—e.g., "can we defend a premium position given our take-rate and CAC?" It's explicitly a co-pilot, not an autopilot: it drafts the analysis; your leadership team decides.

It's genuinely useful when you need speed, want a rigorous first draft to react to, or need to tie positioning to financial models for a board conversation.

When it's not the right tool: if your differentiation hinges on deep, non-obvious customer interviews and category-specific regulatory nuance, a specialist fintech strategy consultant will out-perform any AI first draft. And if you already have crisp win/loss data and a clear point of view, a founder plus a whiteboard and a spreadsheet is entirely sufficient—don't over-tool a decision you can make in an afternoon. Broader research on generative AI (e.g., the 2023 BCG–Harvard field study) suggests AI lifts quality and speed on well-scoped analytical tasks while producing weaker results on problems requiring judgment outside its information—positioning against substitutes sits on that boundary, which is why the human stays in control.

The practical pattern: use a tool like Percision to get to a defensible draft map fast, then pressure-test it with real customer conversations before you bet the roadmap on it. You can run a positioning pass in Percision and use its output as the starting document for that debate.

FAQ

Q: Should substitutes really go on the same map as direct competitors? Yes. In fintech the strongest "competitor" is often the customer's existing bank or spreadsheet. Leaving them off the map hides the real barrier to adoption—inertia—and produces positioning that only beats startups no one is seriously considering.

Q: How do I pick the two axes? Use won/lost deal language, not internal pride. Choose the two attributes that (1) most separate the players and (2) most influence the switch decision for your ideal customer. If everyone clusters together on your chosen axes, you've picked the wrong ones.

Q: Can I do this without any software? Absolutely. A whiteboard, honest customer notes, and a spreadsheet are enough for a first map. Tools help mainly with speed, financial linkage, and turning the map into a board deck—use them when those matter, not by default.