I’ve spent the past two days at Finovate Europe in London, which must be one of the more thought-provoking ways anyone in digital financial services can spend two days.
Here’s my perspective on the lessons from the event for digital financial services executives:
More people are focusing on the small business opportunity. There were far more companies proposing to help small businesses manage their finances this year, in numerous ways from access to capital through to document storage and expense management. I was particularly impressed by the work that Efigence and Idea Bank have done to help Idea Bank’s small business customers manage their finances.
Automated financial advice for mainstream customers is edging closer. For years, Forrester has talked to its clients about the huge opportunity, and pressing need, for financial firms to use software to automate the production of financial advice. A growing number of firms are trying to solve this problem from one angle or another, including Money On Toast, Vaamo, Your Wealth and Yseop. Perhaps the best quotation of the event came from Elizabeth Farabee at Yseop: “A banker doesn’t sell the customer the best product, but the product he knows best.” Automating the manufacture of advice can fix that.
I’ve spent the past two days at Finovate Europe in London, which has rapidly established itself as the leading European retail financial technology event of the year. This year’s event was bigger than last year’s, with 64 exhibitors spread over the two days.
Here are my impressions from the two days:
Innovation is hard and usually incremental. Our expectations are so high. It’s easy to sit in the audience and think ‘I’ve seen something like that before’. It’s a lot harder to develop truly new ideas, let alone build them and market them. Innovation is necessarily incremental, moving into the adjacent possible opportunity as my colleague James McQuivey puts it (see him explain it on video here). True invention is extremely rare. As James puts it in his new book, “The most powerful ideas consciously draw from and incorporate elements that were being developed by others along the way, ultimately generating the best outcome in the shortest time at the most efficient cost.” That’s what makes events like Finovate so useful.
Over the past decade, BBVA has worked hard to become more customer centric and match its offerings to its customers’ needs. Given the pace of technology change, customers’ rising expectations and the digital disruption those forces cause, innovation is a critical part of the role of eBusiness and channel strategy executives. I thought I would share a few of Gustavo’s insights here for those of you who couldn’t attend. BBVA has become systematically innovative, launching a continuous succession of innovations many of which were a first in Spain, in Europe or in the world, such as:
Anybody out there who doesn't have a mobile device, raise your hand...just what I thought.
The explosion of mobile phones and apps in the everyday lives of consumers--and agents--is powering big changes in the business of insurance. Heightened customer expectations are getting formed by the changing mobile landscape; new generations of customers; new competitors, and the ferocious pace of mobile tech-enabled innovation that is radically reshaping how customers become informed, purchase, and get service.
In our new report, the first of Forrester's Mobile Insurance Playbook, we examine how mobile forces are driving customer expectations and how customer demands are going to influence new insurance business models.
Consumers are living La Vida Mobile. Mobile is a pervasive element in the daily lives of insurance customers. With more mobile devices available within easy reach, US consumers are tapping into this ready convenience to research, buy, and service their financial needs, including insurance. And how about those Millennial insurance customers? More than one in four told us that they use mobile as their main personal financial channel.
Agents are becoming proficient mobile tool users. The tablet form factor looks almost purpose-built for the needs of agents. From their hi-def displays to fast boot-up and super portability, agents are ardent tablet-ers, and half the agents in an informal survey at the end of last year cited mobile as one of their leading business initiatives.
In our research on eBusiness and channel strategy, we often come across clusters of innovation where innovation by one company in a sector causes its competitors not only to match it, but to try to leapfrog it -- resulting in a rapid cycles of innovation. Among the examples of these clusters are insurance companies in the US (Progressive, Geico and a growing number of others) and banks in Spain (Bankinter, La Caixa, BBVA and Banco Sabadell).
Another of those clusters is the retail banking market in Turkey. Last week I was in Istanbul and was able to see some of the innovations in person and meet a number of heads of eBusiness at Turkey's big banks. Turkey's banks have been quick to adopt digital technologies and achieved some world firsts for the banking industry. Here are a few examples you might like:
Ziraat Bank has deployed a network of unstaffed video kiosks (see picture, right), which it calls video teller machines, that use video-conferencing to connect customers with agents in the bank’s contact centre. Customers can use the kiosks to deposit and withdraw money, buy and sell foreign exchange, pay bills, transfer money and buy bonds. The kiosks let the bank expand its network much more quickly than building conventional branches would do.
There are a number of firms that we watch closely at Forrester because they stand out for sustained innovation. Behind the technology giants like Google and Apple, there are a number of established firms that are using technology to adapt rapidly and successfully to changing customer behaviour and needs. One of them is Commonwealth Bank of Australia. Over the past four to five years CommBank has introduced a series of digital innovations to serve its customers better including:
Finest Online. In the course of its "Finest Online" project from 2007 to 2009, CommonwealthBank of Australia redesigned its NetBank Internet banking service with the objectives of building an excellent customer experience and driving online sales. The bank implemented new content and functionality to support the customer journey and integrated new secure site sales processes with in-person channels and the bank's multichannel customer relationship management (CRM) system. The two-year, cross-organizational project boosted online sales, increased customer satisfaction, and improved the bank's image. (Forrester clients can read our case study.)
At our Marketing & Strategy Forum last November, Sean Gilchrist, head of digital banking at Barclays Bank, talked passionately about the importance of customer experience to the work being done by his team at Barclays. It's good to see some of the results of that focus on customers in two innovations introduced by Barclays in the past few weeks:
Firstly, Barclays has started rolling out a new online banking interface. While I'm sure that not every customer will like the change, the point is that Barclays is taking a modular (or widget-like) approach to displaying content and functionality in anticipation of having to serve customers on a rapidly growing range of digital devices. We think that approach is going to become increasingly common as eBusiness teams adjust to the fragmentation brought by the Splinternet.
For those of you who aren’t familiar with Finovate, it’s a fast-paced format with seven-minute live demos and pitches from 35 financial technology vendors. It’s produced by Online Financial Innovations, the people behind the excellent NetBanker blog.
I was lucky enough to go along to the show in London today. Unlike last year, when four or five themes dominated the day, this year’s exhibitors were more diverse. Among them were:
Over the past couple of years I have been intrigued by the concept of a 'digital wallet' that will combine mobile payments with a variety of other benefits for customers. The more people I talk to, the more convinced I am that mobile digital wallets will mark a big shift in retail payments. A mobile digital wallet is more than just a mobile payment system because it combines:
Mobile payment. Digital wallets are likely combine several different payments systems into a single service, including mobile contactless payments, online (i.e. web) payments, and over-the-network mobile payments, making it easy for customers to make a variety of different types of payment from a mobile device.
Barcode scanning. Scanning barcodes or QR codes will let customers get more information about products, and let them pay for items on their phones before showing an on-screen receipt to leave the store.
Loyalty rewards. Instead of carrying (and sometimes forgetting) a separate loyalty card, digital wallets will track customers’ spending and offer merchant-funded rewards, either on the phone or at the point of sale.
Coupons and offers. Digital wallets are likely to offer customers coupons and location-based offers.
[With apologies to all those of you who had already read this, I'm re-publishing this as the Forrester gremlins ate my previous post.]
For the past few years, many eBusiness and channel strategy executives in financial services have had a nagging sense that today's websites would be rendered obsolete as new technologies emerged or younger consumers developed radically different behaviour patterns. We think that time if fast coming upon us.
For the past six months we've been working on our vision of the Next Generation of Digital Financial Services, led by my colleague Alexander Hesse and inspired by the work of leading eBusiness teams worldwide. Although our vision is not an exact description of how all digital financial services will evolve, given the wide variety of markets that eBusiness executives operate in and the different strategies of their firms, we think the next generation of digital financial services will be characterized by five things:
Simplicity. Making it easy for customers to achieve their goals.
Ubiquity. Interacting with customers wherever they want.
Personalization. Making the entire experience relevant to individual needs.
Empowerment. Enabling customers to take action by themselves.
Reassurance. Providing human help whenever it adds value.