Simplicity boils down to two essential steps “Identify the essential” & “Eliminate the rest” - Bob Babauta
This principle applies in the financial services industry in many contexts but lets think through some trends in tandem with this thought. The key trends emerging in the financial services industry & offerings which are critical to understand for all CEOs, into 2020.
Modern Banking has now transformed into becoming highly automated, all pervasive yet non intrusive.
Most banking services can be availed by a few taps on your smartphone. As more & more sophisticated technologies are adopted by the financial services industry, the role of a bank as an intermediary to finance will fundamentally evolve .
Fintech startups are pointing to the direction that modern day finance companies may not be truly playing by the traditional banking rules. They are present in areas to fulfill the exact gap left by traditional companies, eventually surpassing the need of basics which was provided by them.
Just think about it that , today to get finance, you could go to the bank as the last option, there's crowdfunding the strongest forms of alternative lending that have recently emerged.
Lending can longer be regulated by banks or regulators . The only way is to legitimize the process. Kickstarter & Indiegogo within less than 10 years have raised billions of dollars for their users. Crowdfunding is the right way for people who want to test their product for market validity or fund a project right from its conception to commercialization. You not only get validation of the idea but also the indicative valuation of the company if the idea matures. Crowdfunding is a manifestation of sharing economy where the providers of the capital & users of capital find each other intuitively with a lot of legitimacy to ideas.
This has created an ecosystem where businesses develop offerings by cross-industry partnerships. A good example can be a travel company booking a ticket for its customer through Paytm Wallet, not only does the customer receive a discount in terms of cashback but also accumulate added points for the travel agent . Another great example is how banks created an online loan approval model which would get the customer’s loan approved with a click of a button and crediting the customers account with the loan amount. You charge the customer only depending on what he's using for the loan.
Platforms such as BHIM, Paytm, Razorpay, Google Pay, PayPal, Venmo have paved a way for consumers to route the money without a bank. Big investments & ROI into these platforms have prompted traditional banks to develop their own versions P2P platforms & same offering but also prompted non-traditional players such as Facebook, Google and Amazon to develop their digital wallets. Quick, digital payments amongst peers has had a huge impact on the economy of India. Payments can be transferred simply by clicking on a friend's number or scanning a barcode.
The attitude of ownership is shifting in the mind share. This will have tremendous impact in the way in which we all do business. The sharing economy is an economic model defined a model of sharing the limited resources we have in the most optimum manner. This could be an outcome of recognising the wastage is no longer fanciful. This stems from deep human want to care for our environment and consume less.
People have become very choosy of what they wish to experience as they are inundated with a plethora of experiences digitally and otherwise.The modern man now is very wary of unwanted time being spent on things that don't really matter to their penchant, like standing in a queue in a bank, or waiting in queue for customer service agents, fixing problems created by complexities of products or services available.
Your high spenders are globetrotters and difficult to get their attention let alone market products to them. So the marketing you're left with is the right experience, nothing more, nothing less. Bottom line is that while the customers become more aware and conscious of their own priority, companies in order to maintain the mindshare, should invest in the right experience.
Blockchain is often considered as the next technological revolution especially in financial services many companies have been investing resources to commercialize this technology. As the threshold of companies which adopt Blockchain grows, many more companies & individuals would embrace the public ledger system not only for retail use but also for institutional applications.
Applications which have become very popular of these distributed ledger systems are Cryptocurrencies. There is always a question of the intrinsic value of Bitcoin. Blockchain applications are much larger than what was envisaged and it seems the early starters who are able to crack the ideas would be the winners in the long run.
When there is so much opportunity for automation, companies are struggling to streamline the essential data to make sense out of the plethora of information handy. More than 50% of data is unreliable. Such dirty data leads to poor insights and unpredictable outcomes.
Most competitive advantages & innovations have been created based on personal ideas, simplistic surveys and brainstorming. Considering constant online footprints, connected devices and real time interactions, companies can use or create sophisticated tools to derive insights. The trick is to find the right data and maintain the accuracy and predictability of that data set. With this data set, companies can design products and services well beyond what currently is.
Customer intelligence is the way data and design are used to create new solutions with the right outcomes. This would have an imminent impact on the way the companies are dealing with customers & their requirements as the evolved product designs would ensure customer centricity.
The advent of new technology has created a plethora of opportunities to service consumers in very personal ways but also has created complexities. Consumer behavior will evolve and brands need to keep up with the trends and ever changing tastes to capitalize on the emerging trends.
Jaidev Chatanat is a thought leader in the space of marketing intelligence, customer service and digital transformation. He has been an advocate for applying the right digital transformative strategies and techniques for many decades for fortune 500 companies.
He is reachable for consultation on email@example.com