Throughout Finovate Live, we’ve heard from experts on a whole host of fintech hot topics, including new technology like AI and robotics, as well as analysis on what is happening in retail banking and trends driving innovation at such a fast pace. What can often be lacking are the voices exploring the moral and ethical justifications around technology deployments, and the consideration around how we can ensure that all the advancements in the finance industry will benefit everyone. Here, we bring you conversations centering around the future of fintech and why it is so important to have these conversations now.
As part of Finovate Live, and our #WomeninFinTech series, we sat down with Mary Wisniewski, Consumer Banking and Fintech Reporter at Bankrate, to get her take on the fintech industry, looking from the outside in, and what she thinks can be done to help close the gap and get more women into the sector.
Finovate: How did you start your career?
Mary Wisniewski: I started my journalism career by writing about high-end jewelry for a business audience. Then I stumbled into writing about tech that debt collectors use to collect arrears. After that, I found myself blogging about fintech for Bank Innovation. Since then (and + 10 years), I haven’t parted ways with the fintech and digital banking beat.
Finovate: Why is fintech an exciting industry to be a part of in 2019?
Wisniewski: Because of the possibilities. There’s so much promise for fintech to help improve traditional banking products and services for consumers – including by revamping the credit score system. That’s huge. As a reporter, I find the industry fascinating to cover. Banking is in the middle of an existential crisis, and the story possibilities are endless.
Finovate: What is your prediction for fintech over the next 5 years?
Wisniewski: The way consumers share their data to use fintech services – and/or get products – will continue to move away from requiring them to hand over their bank user names and passwords. As the model evolves and banks use APIs over screen scraping, we must all stay tuned to the risk of banks calling the shots of what data they share or don’t share. We also need to pay attention to how inclusive the new data-sharing model is.
While there are a lot of headlines about banks and fintech companies working as partners more than ever, I believe it’s not quite so cheery as that. There are a lot of battles ahead.
Finovate: Do you think we see too few women in fintech?
Wisniewski: Yes. There is a gender imbalance. Just look at the empty women’s bathroom lines at conferences as evidence. In fact, this issue is something I blogged about in 2015 for American Banker. I could re-post this again today – my points remain the same.
Finovate: How can businesses better attract and retain female talent?
Wisniewski: This question is a hard one to answer, so I also sought input from a pro and my pal, Bonnie McGeer, the executive editor of American Banker. What follows are some actionable ideas – some from her and a couple from me – all of which I support:
- Make sure women feel respected in the workplace – and that includes with raises. It also includes supporting their ideas with budget.
- Avoid “bro club” vibes, including by not making women the butt of jokes. Comments like “you’re a lot better looking than the last guy sitting here” need to stop, too.
- Require all those in leadership to be an official mentor/sponsor for one year to at least two employees (one male, one female) who are relatively new hires.
- Go beyond golf for networking opportunities.
- Make diverse hiring/promotions a component of annual evaluations for every manager that does hiring, and make poor performers on this component ineligible for raises/promotions that year. If women are at 10% overall of hiring/promotions for a particular group, that’s not acceptable.
Finovate: What advice would you have for women starting their career in fintech?
Wisniewski: Jump right in. You’ll get annoyed at times. But there are so many wonderful people in this industry – connect with them, at events and on Twitter. Also, don’t feel intimidated. Yes, there are people who have worked in fintech for a long time. But you’ll have something to offer they might not. You’ll feel in your zone soon enough. If you do get nervous, don’t underestimate what a power song can do before speaking to someone.
Steven Ramirez, CEO of Beyond the Arc, explores why customer experience has jumped to front of mind for most banks, and why there is no silver bullet to solve poor customer experiences. Success, he explains, is a medley of understanding your customer, deploying new technology, and keeping your staff happy, too.
Five years ago, no one in financial services was talking much about customer experience. Customer service? Sure. Customer satisfaction? Perhaps. But organizations weren’t equipped to examine the entire lifecycle of interactions that a person has as they learn about a bank, explore its products, become a customer, manage an account, and perhaps ultimately decide to leave or stay.
For one thing, the siloed nature of many organizations doesn’t create an incentive to think about a customer relationship holistically. Fast forward a few years, and much has changed. Banks and credit unions realize that they are essentially in a commoditized business. They understand that with so much similarity in products and services, one of the only ways to differentiate is based on the experience they deliver. But therein lies the challenge: what investments in technology, processes, and talent are most likely to improve customer experience?
Technology companies like Amazon, Apple, and Google have disrupted a range of industries from advertising, to retail, to computer hardware. In 2019, they’ll increasingly target financial services. With this growth in TechFin, we can expect to see the creation of financial experiences, not just new products or services. The way people receive a paycheck, spend it, and save for the future will be technology-enabled to better reflect their personal needs and long-term goals.
This means you can’t just plug-in a new technology and hope to transform.
The importance of customer understanding
Your first investments need to be in better understanding your customers—both the ones you have today, and the ones you hope to attract in the future. In a recent study about innovation, only 18.3% of companies identified themselves as a Digital Leader. And on a similar note, just 29.5% said they were very excited about “their ability to adapt over the next three years.” Critical to both is the necessity to know more about your customers, and their needs, than ever before. With the explosion of data, and the tools to derive insights from it, you can now improve customer experience by spotting previously undiscoverable trends and taking action. You can see how machine learning, cloud and edge computing, and more robust data integration capabilities could play a role.
Personalization at scale
Investments in customer understanding help to fuel progress in personalization. Cutting-edge marketing from ten years ago emphasized the importance of sophisticated segmentation. Today, your customers want to feel like you’ve tailored your offering to meet their unique requirements. An important implication of this is that you need to communicate with the audience of one.However, you need to do this at scale for thousands, or millions, of people. Each person, as an individual, must feel that you are considering their needs, and only their needs, when they interact with you. Predictive analytics can enable real-time solutions that match customers with the most appropriate products and services, at just the right time for them.
Improve employee experience to improve customer experience
As Beyond the Arc strategist Michelle Espinoza notes in our recently published CX trends article, “Companies are focusing so intensely on CX, they’re losing sight of the employee experience.” She goes on to note that, “just like Amazon set the bar for CX, we can expect to see companies emerge that set the bar for employee experience as well.” I can think of several leading companies that get this right: Disney, Zappos, Ultimate Software (a BTA client), Salesforce, and others. What will it take for your bank to make this list? And what tools and technology might help to ensure your success? Machine learning can help tie your recruitment process to key success factors for various jobs. Business intelligence, real-time alerts, and robotic process automation (RPA) can help you to report on, and streamline, operational conditions so your employees can remove customer pain points.
Tech, transformation, and the future of CX at your bank
Unfortunately, there’s no simple recipe to transform customer experience. If there was one, your raw ingredients would include better customer understanding, personalization, and employee engagement. In their book Outside In, Kelly Bodine and Harley Manning argue that there are billions of dollars at stake. They cite the example of Fidelity: when clients had a good experience, they invested 4.5 times more with the firm than people who did not, amounting to billions in incremental assets every year. And telecom provider Sprint saved $1.7 billion from averted customer service calls per year. Technology can certainly help you to acquire vital new capabilities. But to achieve success, your bank will need to treat CX as a core business process, focus your resources on measurable improvements, and invest in both people and technology.
- What can you learn from Finovate? Here are some of my key takeaways from FinovateFall 2018 in New York: https://youtu.be/6RuFcmu2dyc
- Wondering about the innovate startups? Take a look at highlights from my live blog with real-time analysis of some of the latest crop of Best of Show winners.
- Need some practical tips for responding to digital disruption?
Who is Beyond the Arc?
We help companies apply innovation to attract customers, improve customer experience, and develop data-driven strategies. From telling your story in clear, compelling ways in digital and everywhere else, to unlocking business value with data science, AI, and machine learning, Beyond the Arc has got you covered. Follow us on Twitter @beyondthearc.
As part of the #FinovateLive series, April Rudin, Founder and CEO of The Rudin Group and global wealth marketing strategist, explores the current wealth management space, and why this year the industry looks set to merge closer with fintech, as incumbent players realise they need to embrace technology to meet demands of younger generations.
The old guard wealth management industry and fintech have kept each other at arm’s length for years, claiming the other lacks the tools to meet current client needs. But in 2019, we expect they’ll put past differences aside and finally cozy up to each other.
“Partnerships” will be the buzzword for the new year as incumbent players realize they must embrace tech to meet the demands of their millennial clients, while so-called fintech players realize sometimes clients really do want the intimacy of a face-to-face meeting.
As proof of concept, look no further than Morgan Stanley’s recently announced bid to buy Solium Capital in a $900 million all-cash deal – its biggest acquisition since the financial crisis.
By snatching up the Canada-based employee stock plan administrator, which counts Hootsuite and Dropbox among its clients, Morgan Stanley hopes to facilitate a path to draw millennials into its wealth management practice. Solium, meanwhile, receives the backing of one of the largest banks in the United States.
We expect to see more of this in 2019 – whether it’s outright acquisitions of smaller players or strategic partnerships between incumbents and fintech players.
With the $30 trillion generational wealth transfer in its early innings, pure-play robo-advisers are finding that their algorithmic services aren’t enough to win over millennials on the brink of their asset accumulation years. A robo-adviser may be sufficient when a plan is in place, but fintech and artificial intelligence (AI) have yet to replicate the insights gleaned or the comfort level achieved through one-on-one conversations. This is especially true for young families balancing student loan payments, first homes, and education planning for young children.
Even my millennial son told me he was frustrated that robo-advisers kept being pushed on him when he really wanted a human adviser to help him navigate through the world of investments.
But it’s not just the robo-advisers that gain from partnering with incumbents. Traditional wealth managers also benefit by having their services buttressed by fintech players. It’s no longer an all-or-nothing dance between the two: Incumbents can leverage in-house technology to spend more time forging meaningful client relationships. What we’re seeing in 2019 is that an industry once known for its left-brained quantitative skills can now work the right side of its brain – all thanks to technology, ironically.
Clients will soon be benefiting from hybrid advice. While algorithms can quickly churn out portfolio options that advisers previously spent days crafting, advisers today can use the time saved to think more critically about their recommendations. Rather than prescribing financial advice, they can embrace a more holistic approach to determine what their clients want and how they feel about their portfolio and wealth.
But the expected partnerships in the wealth management industry don’t just apply to adviser-client dynamics. Total investable assets in North America are expected to grow by nearly 10%, to $28.8 trillion by 2021, according to a 2018 Ernst & Young study. And that wealth is not just concentrated in a mix of stocks and bonds. The era’s low interest rates have compelled households to allocate some of their wealth to alternative asset classes. For this reason, advisers need to know how to manage and analyze diverse holdings.
And as the wealth management industry continues to grow – both in terms of assets and clients from the wealth transfer – it will need to attract a young, engaged workforce to meet increasing and evolving demands. Analog solutions won’t cut it in a digitized world, especially when it comes to luring talent away from Silicon Valley. While many firms previously relied on a patchwork of legacy systems to conduct business, today’s younger workforce wants clean, reliable interfaces to complete their work.
We expect to see increased intergenerational team partnerships in the wealth management industry. After all, the “average” adviser is 55 – and perhaps thinking of their own retirement. We anticipate they will be leaning on their younger staffs and calling on their expertise. While advisers may have the years of experience, younger employees – and digital natives – will know new ways of reaching existing clients and prospects.
The room for partnerships in 2019 extends throughout the wealth management pipeline. From mergers between incumbent and fintech players to generationally diverse teams amid the wealth transfer, it’s clear we’re moving from conversation to commitment.
This article was originally published on CFA Institute, February 2019 >>
As part of the #FinovateLive Digital Week, we bring you exclusive interviews with the leading minds in fintech. Hosted by David Penn, Finovate Analyst, and William Mills, these interviews cover a range of topics, from why it’s riskier to not take risks when it comes to retail banking, to whether or not robots are going to need passports in the future (hint: they will!), to what trends these experts are keeping a close eye on this year.
Brett King, CEO and Founder of Moven, on what the most disruptive technologies in history all have in common
Jim Marous, Co-Publisher of The Financial Brand, on why we need regulators to regulate for change
JP Nicols, Co-founder of FinTech Forge, on why we’re not in the era of agility
Dave Birch, Global Ambassador of Consult Hyperion, on the future of AI and robotics
Welcome to FinovateLive! Tune in between 19 – 21 March to delve deeper into the biggest issues impacting the finance sector.
FinovateLive! will feature expert discussions via a series of interactive webinars, whitepapers and articles to shed light on the areas most ripe for innovation. The program will also highlight the technologies that have the potential to transform the entire banking, payments, insurance and investment industries. Catch the future of fintech in real-time from the comfort of your desk with our exciting agenda built around business challenges and innovative solutions.
Tuesday 19 March
Hear from Jeremy Balkin, as he showcases how doing things differently adds value and truly transforms business. We also put forward the question: “Is innovation essential in banking?” and look to get Jeremy’s take on how to create touch points and deepen long term personalized human relationships in a highly technology driven environment.
Featuring: Jeremy Balkin, Head of Innovation, HSBC
Wednesday 20 March
In this webinar, Clara takes a practical approach to developing an AI strategy. She discusses why designing a long term AI strategy is essential, and why patchwork innovation with AI is not going to pay off. The discussion will draw from Clara’s direct experience working with decision makers, as well research lifted from her upcoming book on how AI is transforming financial services.
Featuring: Clara Durodié, Executive Chair, Cognitive Finance Group
Banks are in trouble. Every modern bank dependent on branch revenue is in virtual survival mode, hoping for a miraculous reversal of emerging customer behavior. Brett King, discusses the future of banking and fintech, finally deciding which banks will make it, and which won’t.
Featuring: Brett King, CEO & Co-Founder, Moven
Thursday 21 March
In this webinar we’ll focus on the findings of the just released 2019 Retail Banking Trends and Predictions research, published by the Digital Banking Report. The report is now in it’s 8th year and combines insights from a crowdsourced panel of more than 80 industry leaders and a quantitative survey of more than 300 financial services organisations worldwide.
Featuring: Jim Marous, Co-publisher, The Financial Brand
In the last webinar of #FinovateLive, we speak with JP Nicols, Managing Director at FinTech Forge about the fintech revolution, why banking hasn’t yet been ousted by apps and wearables, and what has been seperating the winners and the losers in fintech.
Featuring: JP Nicols, Managing Director, FinTech Forge
Webinars have been editorially curated by Adela Knox, Editor in Chief, Finovate Digital Week.
More than just webinars
During FinovateLive, we’ll also be bringing you expert insights and exclusive interviews.
The decisions your bank makes today could have major implications on how you stay competitive—for years to come. Developing one app or digitizing a process might appear to suffice, but that is just the tip of the iceberg. It’s time to align your bank’s digital transformation strategy with the entire customer lifecycle by providing a personalized omnichannel experience. The result? Your bank improves customer satisfaction, increases customer retention rates, and drives overall customer profitability.
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Download this OutSystems report to find out how to move your bank from a product-driven organization to a customer-centric one. Interested for more? Check-out the Outsystems Digital Banking video too >>
Don’t miss our eye-opening interviews and thought-leadership from prominent women in the fintech landscape. Featuring April Rudin, Founder & CEO of The Rudin Group and Mary Wisneiwski, Consumer Banking and Fintech Reporter at Bankrate, we discuss the trends impacting the fintech landscape and hone in on what the industry can be doing better to attract, retain and advance female talent.