Helping leaders make better decisions when the status quo feels safest
Last week during Finovate Fall 2013 we launched the Bank Innovators Council. More than 75 bank innovators, entrepreneurs, CEOs, bloggers and industry analysts joined us on a Manhattan rooftop to celebrate the launch of the first organization designed by bank innovators for bank innovators.
We are proud to be creating a platform to bank innovators do together what they can’t do alone. Join us at BankInnovatorsCouncil.org
Finovate Fall 2013 wrapped up a whirlwind two days of FinTech innovation in New York on September 10 and 11. Eight of the 69 presenting companies were voted Best of Show by those in attendance.
Five of those eight winners had direct or indirect applicability for the investing/financial planning/wealth management space (LearnVest, MoneyDesktop, Motif, TipRanks and Yodlee).
This year’s venue at the Manhattan Center (which includes the historic Hammerstein Ballroom) was not the best for this kind of show. Finovate is really two simultaneous events– the eight sets of back to back to back rapid-fire 7-mintue demos (no slides or Q&A), and the longer one-on-one interactions with the presenters at each of their booths for those who want to learn more and/or make connections. Past venues provided sufficient separation between the stage and the presenter booths to allow both to co-exist. That was not the case this year, and unfortunately both parts suffered a little.
Beyond rows of chairs close to the stage, better seats with tables were placed around the two balconies, with remote viewing via video screens also available on the 7th floor and its balcony (plus a press room in the basement) . This split up the crowd a quite a bit and did make it more difficult for the ongoing conversations and networking that are so valuable at a show like this. There were also a few audio glitches that detracted, but the WiFi was much better than last year at Javits Center.
Still, it was great to see all of the newest innovations, meet the innovators behind them and catch up with my growing list of friends at these must-attend events.
(In a semi-related note, we held the launch party for the new Bank Innovators Council on the middle night of Finovate. More than 75 bankers, partners and thought leaders joined us on a Manhattan rooftop to kick off this new organization designed specifically to help bankers innovate together in ways they cannot do alone. More on this in a future post)
Congratulations to all of the Finovate Fall 2013 Best of Show winners, all of whom are very deserving of this honor.
I also send an extra personal congratulations to my friends at MoneyDesktop and Yodlee, whom I have had the pleasure of getting to know and work with over the past year. I look forward to our future collaboration.
Read the entire story on finovate.com, where you will also soon be able to see videos of all 69 presentations from Finovate Fall 2013.
It’s even harder doing it alone.
FinTech entrepreneurs have incubators, accelerators, VCs and hackathons to support and encourage innovation, but banks are on their own.
Until now.
Today I am excited to introduce the launch of the Bank Innovators Council, along with my co-founder, former BBVA Compass executive and fellow innovator Will Trout.
We know that most banks are not able to afford their own innovation labs and teams.
But we also know they can’t afford not to innovate.
The Bank Innovators Council is primarily designed for financial institutions without fully developed innovation capabilities. The council will provide opportunities for members to pool their resources to develop and test new ideas outside of the day-to-day demands of their existing businesses, in ways they could not do alone. We will also curate outside research and technology and help bank innovators create, test and launch new ideas.
Read today’s full press release.
We are hosting a launch party for the Bank Innovators Council on September 10, 2013 in New York, coinciding with the Finovate Conference September 10-11, where 60 FinTech companies will demo their latest technology to an expected crowd of 1,000 bankers, investors, analysts and members of the media.
Limited spots remain for the launch event, and requests to attend can be made here.
We live in a real-time traffic, turn-by-turn directions, GPS world. Why do financial institutions still hand out the equivalent of gas station maps?
I hear from many financial institutions that creating financial plans for their clients is an important goal, in fact some have goals to provide financial plans to all or a significant percentage of their clients. Part of this is a noble goal– firms will be able to do their best work when it’s relevant to a clients’ unique situation and goals. But it also makes good business sense. Research links financial planning to deeper wallet share and a higher likelihood achieving that elusive “primary financial advisor” status.
Unfortunately, the client’s experience at most firms goes something like this:
That’s the paper gas station map, folded up inside out at the bottom of your financial glove box.
Firms should be integrating a broader view of client data onto their desktops and into their financial planning process. According to research from CEB Tower Group, 90% of advisors cannot see a consolidated view of their clients’ holdings that are held away from their firm, and 76% cannot even see a consolidated view of their clients’ holdings within their own organization!
It’s not just financial planning. The client onboarding process is often a similarly manual process that also often squanders significant opportunity to improve client engagement.
It’s time to bring the industry into the GPS world.
Too small to fail: The partnership-driven nature of fintech startups (via Pando Daily)
By Houston Frost On May 22, 2013In the last quarter-century or so that has made up the digital revolution, one universal axiom has held true: evolve or die. Record labels were too busy suing pirates in the 1990s to adapt their business model to the digital world, newspapers were consigned to the recycle…
[Read more…] about Too Small to Fail: The Partnership Driven Nature of FinTech Startups
I spent a great couple of days in San Francisco this week hearing from 72 FinTech companies at Finovate, stay tuned for my unique recap and thoughts from the largest Finovate ever.
As usual, there were several companies focused on improving access and service to the so-called underbanked– those who are priced out of traditional banking services, and those who simply opt out. This is a large market– several markets actually, and providing services people want and need at an affordable price is always good business.
I’m talking about affluent and high net worth customers. Not because they don’t have sufficient access or because they are priced out of any markets. In fact, it’s just the opposite. Affluent customers have plenty of choices. Maybe too many. It is a market niche most financial institutions should be pursuing, but it’s hard to stand out to affluent customers.
Marketers hoping to reach the affluent need to tailor their offerings to be relevant. Messages about daily cash flow budgeting, for instance, can be powerful for the mass market and the underbanked. Every dollar matters and the timing of every dollar matters. It is worth spending time on activities that will save money by avoiding late fees and overdraft fees, for instance.
For many (though not all) affluent customers, it’s the other way around– they will often willingly spend additional money in order to save time. They will also spend money on unique experiences, as I have written about before.
(See Reimagining Bank Product Design in the Experience Economy)
Smaller and midsized banks can play in the wealth management big leagues, but they have to use some Moneyball type tactics to compete and win against the big budget competition.
Before the financial crisis, a “Field of Dreams” approach worked– if you built it, they would come. An environment of deregulation, falling interest rates, a rising stock market and a seemingly unlimited supply of talent allowed banks the luxury of focusing largely on acquiring clients, almost regardless of cost. Now with compressed margins, skittish investors hoarding cash and a changing competitive landscape, new tactics are required.
In an article I recently wrote for BAI Banking Strategies, I detailed six key Moneyball strategies:
There is no reason for smaller banks to resign themselves to the minor leagues, as long as they make the right investments in their wealth management business and establish the right metrics to manage them.
Read the entire article here: BAI Banking Strategies: A Moneyball Approach to Wealth Management
Wealth management firms are increasingly turning to financial technology (FinTech) to enhance the client/advisor relationship, not just deliver self-service tools. It’s about time. That very subject is a prominent theme on this blog, and it comprises a lot of the work I do for financial services and FinTech firms.
Ernst & Young’s recent report Enhancing the Advisor and Customer Experience Through Technology cited three core themes that emerged from their survey of wealth management executive:
The survey found that 75% of wealth management firms surveyed have plans to increase client-facing time, and an equal share of firms plan to invest in mobile tools to improve advisor collaboration and effectiveness.
An article on the study on the Financial Planning website quoted E&Y principal Marcelo Fava as describing the rapid growth of self serve tools as a greater threat to mass market advisors than to advisors of wealthier clients;
“The low cost and effectiveness of that model is appealing, but as your move up in net worth and complexity it’s less so. Households that need tax effective financial strategies will still be willing to pay for the skills of personal advice.”
– Marcel Fava, Head of E&Y’s Americas Wealth Management
(Read the entire Financial Planning article here: Ernst & Young: Face-Time a Priority for Financial Advisors)
In general, I tend to agree, although I will continue to watch the growth of newer entrants focused on disruptively cheaper alternatives. I don’t see FinTech replacing financial advisors for affluent clients any time soon, but I do see it is both a an opportunity and a threat. Remember the Innovator’s Dilemma anyone?
I also continue to see clients gravitating towards more omni-channel solutions, where clients can choose self-serve, advisor-assisted and advisor-driven options when and how they see fit, on any technology platform or face-to-face. We are not even in the first few pitches of the first inning on this, but it promises to be an exciting game.
(See Clients Do Not Want Help. Until They Do)
