Three Digital Transformation Lessons Financial Services Can Learn From Other Industries

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This post was authored by Christine Reyes and originally appeared here on Liferay.com


It’s no secret that digital transformation is a necessity for long-term, traditional players in business, if they want to stay relevant to consumers. In a recent study of financial service leaders, 49% of respondents stated they were roughly halfway through digital transformation, and an additional 37% were in early stages. The fact that so many leaders are making inroads in digital innovation is a good sign for financial services. It means that they’re paying attention and preparing for any coming disruption.

However, being “roughly halfway” through digital transformation means that FSI still has a long way to go. The numbers around customer experience improvement efforts hint at some of the remaining obstacles in transformation. Of those surveyed, 55% are currently working on coordinating their customer experience across channels, and 36% are gearing up to begin this work.

This means that, except for a few leaders and laggards, financial services are in the middle of redesigning their customer experience or about to start. In order to sustain this great momentum and not get stuck, FSI should look to examples from other industries that are farther along in the transformation process.

Here are three lessons from the retail and food industries to help financial services carry digital innovation into customer experience.

Three Digital Transformation Lessons Financial Services Can Learn From Other Industries

Lesson One: Pay attention to micro-moments

Google has identified different kinds of micro-moments, which it defines as “moments that decisions are made and preferences are shaped.” One fun example of this from the food industry is Taco Bell’s TacoBot. It integrates with Slack so that you can order food through an instant message. Since Slack is primarily used as a work tool, this is an innovative way to capture the moments when hunger is setting in during the work day.

Or take, for example, what Google calls I-want-to-know and I-want-to-go moments. Consumers are searching for information on their mobile phones the moment a question occurs to them, and searches that include “near me” have doubled in the past year. Banks could take advantage of this through mobile apps that use geo-location to let customers know that they are nearby and available to help with any financial questions they have.

Lesson Two: Find technology that makes brick and mortar stand out

With the rapid rise of IoT gadgets and VR technology, retail companies have to be brutal about which digital trends are worth pursuing and which will fade away. The point of coordinating customer experience across digital and physical environments is to “help the physical, brick and mortar, three-dimensional retail environment distinguish itself from an online experience,” according to a recent article on Forbes. Currently, consumers still depend on in-person interactions for many of their finance needs. Financial services companies need to establish processes for evaluating technology that enable them to both boost their digital channels, as well as redesign their physical locations so that all touchpoints are seamless, easy to use and valuable for their customers.

Lesson Three: Culture is hard to change

People don’t like it when things change. In 2011, JCPenney launched a digital initiative that failed spectacularly, leading some to conclude that its digital strategy was flawed. But when you look at the department store today, they’ve implemented many of the digital initiatives that were attempted five years ago. This suggests that the obstacles they faced were about people and culture, not technology or strategy. See this recent interview with Lance Thornswood, the Senior Director of JCPenney’s omnichannel digital platform. He states that, even when initiatives were successful, trying to create a new work culture “pushed people so outside their comfort zones that the natural tendency was to snap back to the old ways.” He goes on to say that seeking consensus within the company leads to risk-aversion and stops innovation in its tracks. Instead, executives should empower their employees to pursue new ideas that they really believe in. This creates a more optimistic culture that doesn’t condition employees to say “no” to risk. Financial service leaders need to be aware of the resistance to change within their own companies and find ways to guide their employees through the transition.

Final Takeaway

There’s one more thing that financial service leaders can take from the final JCPenney example: it’s not too late to change. Even if your company is stalled on digital transformation and customer experience improvement, it might not be too late to recover. It will take time and coordination across your organization, but hopefully these lessons from those who’ve been there will inspire you to keep pressing forward.

Outbound Vs. Inbound Marketing for Financial Advisors

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Marketing is a necessary task for any business.  However, there are seemingly infinite ways to go about it given the current digital landscape. You might find yourself wondering, “how should I go about marketing my Advisory business?

Referrals used to be the bread and butter marketing tool to spread the word about your financial service offerings. Do a good job for one client, they tell two friends or family members and boom, off to the races. Today that method, while still sometimes effective, can’t be leaned on as heavily as before due to the many factors and channels that consumers are using to make decisions in today’s digital world.

So, what should you do? Plaster your name all over local benches? Take out ads in the paper? Make a commercial? Use one of the many digital marketing channels available at your disposal? How should you go about getting the word out about your business?

In this article, I will discuss two contrasting methods of marketing that will get your name out there; who the audience for each is, how the message will get in front of the audience and how the audience will likely respond to each message, as well as how that affects your business.

Outbound VS. Inbound Marketing

It’s a simple question that can confuse and confound those outside the marketing department. In reality, it simply refers to traditional marketing methods, such as broadcasting, print, direct mail and telemarketing. Everyone has been exposed to these methods, either through an ad on TV, fliers stuffed in your mailbox, or annoying phone calls while you’re eating dinner.

Why do we call traditional marketing “Outbound”? The term was intended to mirror “Inbound Marketing”, which is the process of tailoring marketing efforts to attract qualified prospects to your business and giving them an experience that turns them into promoters of your brand. Major techniques in inbound marketing are content marketing, social media marketing and search engine optimization (SEO). The major difference between inbound and outbound marketing is that inbound marketing is generally targeted at consumers who are already interested or have an awareness, in some way or another. Outbound marketing is less targeted and casts its net on a wide group of people in an attempt to get them interested. “Outbound” marketing is sometimes referred to as “interruption” marketing because whatever people are doing (watching a TV show, reading the paper, watching the road while driving) is interrupted by the marketing message (commercial, a full-page ad in the paper, billboards).

Why Inbound Marketing Works

Inbound Marketing will continue to be effective in 2017 for a plethora of reasons; from the fact it can effectively target specific segments of the demographics, to the value it brings to potential customers pre-purchase, to the convenience and cost savings for the company.

Inbound marketing costs 62% less than a traditional marketing campaign and generates 3 times the traffic of a traditional (outbound) marketing campaign. It makes sense though, writing a blog post or a few Tweets is far less expensive than purchasing ad space. A domain name costs only a small amount per year and the long-term costs associated with maintaining social media feeds, a blog, website or other assets that are common in inbound marketing are quite low compared with various forms of advertising. Even advertisements online (Google Adwords for example) would cost far less than TV ad time.

The lower costs, and the agility of inbound marketing means that you may personalize the message to its target market to a near infinite extent. For example writing a blog post about how investing would work in the Harry Potter universe (to attract wizards and fans of wizardry), or what Batman’s portfolio would look like (to attract Gotham billionaire Bruce Wayne) at very little cost and in very little time compared to traditional forms of marketing. Inbound marketing allows hyper-targeting, tailoring your message to a specific audience in a way that will feel personal and convey that you can speak to and meet their specific needs and challenges.

Convincing people to trust you with their assets is hard. No matter what medium you use. Selling your financial service to people online, and showing them that you can meet their needs and benefit them is even harder. While inbound marketing generally costs less than outbound marketing, the challenge of appearing to be a legitimate solution to someone’s problem can be much more difficult online.

By sending a hyper-specific message to somebody who already recognizes that they have the need for a specific financial service, inbound marketing generally ensures that all marketing efforts are put in front of people who will actually consider your message, increasing your chances of attracting an MVP customer that can help grow your business.

So why is outbound marketing dying?

There are many reasons why outbound marketing is losing its lustre, from it’s interruptive nature to the slow, inflexible, and often costly process of creating an outbound campaign.

A commercial break in the middle of your favorite TV show, an unexpected cold-call (which always seem to be at the most inconvenient time), spam mail with offers you aren’t interested in coming into your home and bringing clutter with it. People are growing tired of the interruptions and will do what is needed to avoid the interruptions.

Over 200 million people worldwide use ad-blockers when browsing the internet, which renders banner, sidebar and pop-up ads ineffective for a large part of the target audience. The trend of blocking ads is not limited to browsing the internet. More and more people are using PVR’s or services like Netflix, Shomi or Hulu to avoid watching TV ads. Outbound marketing has annoyed people into avoiding as many ads as they can.

Another issue with outbound marketing is the fact that these measures are often slow and inflexible. TV commercials, print ads in major publications, and billboards all take significant time to develop and arrange for them to be released to the public. This means that it is very difficult (and expensive) to have an ad that is current and based off what prospective clients want. Inbound marketing efforts such as Social media, content marketing and SEO are much more agile, meaning campaigns and marketing efforts can be real-time and relevant, with more flexibility and timeliness, all at a much lower cost.

In addition to the difficulties mentioned above, there are issues in outbound marketing involving putting your message in front of the appropriate target at a reasonable price. There are still a few mediums with high viewership for a specific market segment (such as ESPN for sports fans) but many segments do not have such an outlet. This means that to market your product to your target market you must cast a wider net, perhaps by making a commercial and playing it during a show with massive viewership, hoping that some of your target market is watching. These efforts are very costly and generally return a very low ROI.

If we were trying to attract clients to our financial advisory firm we could put an ad on the back cover of our local newspaper, potentially paying tens of thousands of dollars for that ad space. The issue is that although some targets may see the ad, it still got in front of many people who wanted nothing to do with it and are not at all interested. This can be a wasteful process. We could spend far less money designing a top notch website, paying for a domain name and using SEO to ensure that every single person who Googles “Financial Advisors in (Where you live)” will see our website, and our thought leadership content. Simply put, inbound marketing is far more effective at matching your value proposition to a target customer.

Today, if people want something, they Google it, Bing it, or Yahoo search it. They understand there is a market for whatever they are looking for, from financial services to a new furnace. People today don’t want to be sold something. They want to buy it themselves.

Not today, but soon

How does this affect you? That depends entirely on how you want your business to grow into the future. Are you satisfied with an aging client base, who will soon begin to retire, divest and live the easy life? Would you rather have a client base full of millennials just getting into the workforce, still needing to buy a house, plan for a family and work for many years to come?

Generally speaking the older someone is the more likely they are to be influenced by outbound marketing. Younger generations want personalized, unobtrusive marketing efforts. For your practice to thrive and survive in the future you will need to meet the needs and expectations of those generations.

Why you need to recruit milleninials

For your business to thrive you need clients who are still in the Wealth Accumulation stage of the Financial Planning Life Cycle (as shown above). At this time most Baby-Boomers are moving through the “Children in College” phase and into the “Empty Nester” phase. Roughly 10,000 baby boomers turn 65 every day and that will continue for the next 15 years.

To maintain relevance in such a competitive industry, financial advisors must work twice as hard to cater to the future, even if that means moving away from word-of-mouth referrals that has been the gold standard for your entire career.  It may mean moving towards having a strong digital presence that draws in targets who have already identified a need that you might be able to help with.

Another reason to focus your marketing efforts on inbound tactics is that studies show 70% of internet users would prefer to learn about products via content instead of advertisements. Roughly half the world’s population uses the internet, with that figure even higher in developed nations. With the increase of internet users with adblock technology installed and the population steadily migrating away from traditional forms of media and towards digital media, nearly every industry is going to have to get serious about their content marketing, use of social media and their ability to personalize messages.

What does this mean?

For financial advisors and financial service providers, inbound marketing can be the next generations referral system. Instead of attracting one client and building through their network, establish your own network. Create engaging, informative content that can help solve consumer’s challenges and put it out into the world so those looking can find it, and more importantly find you.

This means you need to create your own social network, create engaging content, teach people things about finance through creative, engaging, educational content. Have them come to see you as a thought leader and when it’s time for their purchase decision, it’s likely they will choose the most experienced, capable financial advisor in their social network, which thanks to your efforts educating and engaging them is YOU.

Don’t be left behind in the new generation of digital marketing. Establish your name and build your social network. The only way to thrive in the future of of financial services is to show the world just how good you are – online!

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What’s your most successful method of attracting people to your practice? Do you still rely on referrals? Are you a LinkedIn giant or is your website the go-to place to learn about finance? Let us know on Twitter @VeridayHQ #OutboundIsOut

Michael Jordan, Mohammed Ali & Serena Williams: What They Can Teach You About Business

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I’m a big sports fan. In my day to day life, I tend to think about sports a lot. I’ve come to idolize and respect athletes from many different sports and walks of life; not just because of their actions on the field (or ice, diamond, court, course, take your pick), but because of their wisdom which can be translated to many other aspects of life. Sports are a medium to build teamwork, friendship and to learn the value of hard work, all while having fun. Often lessons learned during a game can translate wonderfully to the business world. Below, I’ve compiled my top 10 favorite sports quotes that can also be related to business.

 1. “Champions aren’t made in the gyms. Champions are made from something they have deep inside them — a desire, a dream, a vision.” –Muhammad Ali (World HeavyWeight Champion Boxer)

Muhammad Ali, while being one of the greatest boxers ever, was also one of the best speakers of his era. This quote should hit home for anyone with a desire to make something of themselves, boxers and entrepreneurs alike.

 2. “The secret of winning football games is working more as a team, less as individuals. I play not my 11 best, but my best 11.” –  Knute Rockne (College Football Hall of Fame Coach)

If you work with a team at your company, this quote holds true for you. If you manage a team of people this quote should hold especially true. Great teamwork will always get more accomplished, with a higher degree of quality than a skilled performer who doesn’t work well with others whether that be on the field or work environment. Nearly every job involves teamwork.  I (and many others) believe that team synergy is one of the most important aspects of success.Just because you can’t measure the ROI of teamwork directly, the value of good teamwork is certainly not to be ignored.

 3. “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” – Wayne Gretzky (Hockey Great)

Wayne Gretzky definitely knows a thing or two about being a great hockey player, but this quote also holds true in any situation. Top performers are always ahead of the curve. That means being ready to adapt to the next shift in the market or the next challenge to overcome. The puck is a metaphor for your business. If you can stay on top of things that’s good, but if you can get ahead of the trends and be one step in front of your competitors, your business truly has the chance to be great.

 4. “Take your victories, whatever they may be, cherish them, use them, but don’t settle for them.” – Mia Hamm (U.S. Soccer Great)

I think Mia Hamm wanted to let others know that they should always be striving for greatness, no matter what field they’re in. If you just landed a big client, turned in an amazing project or just passed your sales goals, it’s important to continue to strive for the next big thing.

 5. “Obstacles don’t have to stop you. If you run into a wall, don’t turn around and give up. Figure out how to climb it, go through it or work around it” – Michael Jordan (6-time NBA Champion)

Michael Jordan, probably the greatest human being ever to play basketball, was a pretty competitive guy. So competitive, in fact, that when he said this he might have been talking about literally running through a brick wall because somebody said he couldn’t do it.  This quote, while it definitely applies to athletes (and people who need to get past a literal wall), it also applies to business. It’s important to keep moving forward, no matter what obstacle gets in your way, from a difficult client to a seemingly impossible engineering problem. It’s important to move forward, keep going and work around your obstacles.

  6. “It doesn’t matter what your background is and where you come from, if you have dreams and goals that’s all that matters” – Serena Williams (Tennis Superstar)

I’ll admit, this quote is a little bit of a cop-out. It can really apply to any part of your life but it applies fittingly to business as well. No matter what your goals are, it’s important to realize that nothing is impossible. Whether you want your own business to grow to become an industry giant or if you want to get a promotion, your goals can become a reality with some hard work!

 7. “Age is no barrier. It’s a limitation you put on your mind.” – Jackie Joyner-Kersey (Track and Field)

I think that this quote is very fitting in today’s rapidly changing technological landscape. While Jackie Joyner-Kersey (3-time gold medalist) was talking about competing in the Olympics against a field of much younger competition, this quote can apply to your everyday business needs as well. Adopting new technologies (for any purpose) can be beneficial to the growth of the company. That can mean anything from setting up a Snapchat or Instagram account to trying to engage the Millennials, or investing in robust ERP software, don’t let yourself fall too far behind in regards to technological trends. Be willing to innovate! Don’t let years of doing things a certain way stop you from adopting a new trend or technology, it just might help and make things easier.

 8. “As the leader, part of the job is to be visible and willing to communicate with everyone” – Bill Walsh (American Football Coach)

This quote goes out to all the leaders out there, whether you’re a team lead, manager or CEO. If you lead you should listen to the wise words of Bill Walsh. Communication is an essential part of team success. If you lead a team of people you need to be available and ready to listen to your team and ensure they are all working in tandem. This cannot be done without top of the line communication. While your team members may have very little in common with the NFL athletes Bill Walsh had on his teams, the job of a leader is the same, no matter the situation.

 9. “If you aren’t going all the way, why go at all?” – Joe Namath (NFL Hall of Fame Quarterback)

Throughout history, there are hundreds of variations of this quote, said by people from all different walks of life. It boils down to the idea of doing whatever you do to the best of your abilities, giving it your all and bringing everything you can to the table.

 10. “In baseball and in business, there are three types of people. Those who make it happen, those who watch it happen, and those who wonder what happened.”  – Tommy Lasorda, Hall of Fame baseball player and manager

This quote needs no explanation. Which one of these types of people do you want to be? The choice is up to you!

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What do you think of our list of quotes? Let us know your favorite sports and business quotes. We’d love to hear from you on Twitter: @VeridayHQ #MotivationMonday

FinTech Trends and the Response from Traditional Financial Services: Part 2

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This series takes an in depth look at the report “Blurred Lines: how Fintech is Shaping Financial Services”.  For an intro on the topic, check out part 1 of the series before reading on. Part 2 will examine the future of FinTech and what strategies financial service providers should use to counter FinTech.

There’s a definite disruption. So, what are the exact risks?

There was a time when physical video rentals or purchases were the only way for people to watch movies from the comfort of their own home. As technology progressed, these physical video outlets didn’t take the steps needed to counteract the disruption from newer video streaming companies. Slowly but surely, the newer technologies gained market share and won over the mass consumer market to the point that outlets that rely solely on physical videos are just not sustainable.

Similarly, the risks are clear in the financial services industry. 23% of financial services business is at risk of being lost to other FinTech options. That means 1 in 4 services offered by most financial service companies will end up being taken over by standalone, independent FinTech companies. The services at risk of being lost to standalone FinTech companies within the next five years are shown in the graph below.

FinTech Trends and the Response in Traditional FinServe: Part 2

The pressure is being felt within the sector with 2 out of 3 companies believing that FinTech will cause pressure on their own margin in the next 5 years, with 59% believing that they will also lose market share to FinTech firms. Both of these threats can be attributed to FinTech offering high-tech options for basic and convenient financial tasks. The high-tech options are often leaner, carrying fewer overhead costs, which, in turn, allows for the service to be offered at a lower rate. That cost reduction is passed down to the consumer, lowering traditional financial institutions market share and putting pressure on the margins of traditional financial institutions.

However, it isn’t bleak as it seems. There are opportunities related to the rise of FinTech. If a traditional financial service provider is willing to adapt and pivot into the future the risks discussed above can be turned into competitive advantages and lead to improved customer retention through simplification of processes, reducing inefficiencies, and innovation.

What are some strategies?

Integration – if you can’t beat them, join them. 60% of survey respondents in the financial services industry agree that FinTech should be put in the heart of their strategies and 78% of CEOs believe the same. However, there is quite a disconnect between the beliefs expressed and actions taken towards integration.

While 84% of the fund transfer and payment sector believe that FinTech has been put at the heart of their organization’s strategy only 56% of banks, 45% of AM & WM sector, and 44% of insurance sector have put FinTech in the heart of their strategy. All of these figures fall well below what the average respondent believes should be done towards integrating FinTech into the company’s strategy.

The first strategy involves developing a “mobile-first” approach. This strategy has grown in popularity because the majority of the financial service providers believe that up to 60% of their clients will use a mobile application to manage or transfer their finances. Currently, 53% of the industry has a mobile application and 18% of firms in the industry have an app in development. It seems this has become a standard strategy to combat the evolving landscape caused by FinTech.

A second strategy involves collaborating with FinTech companies and integrating the FinTech systems into their own organization. There are many ways this could happen, with acquisition of the whole company, internal R&D, or a joint partnership. All of these have their own pros and cons, which is more of a business problem – but the end goal remains the same.

Since developing a “mobile-first” approach and bringing FinTech thinking into your own organization are the two predominant strategies, many financial service providers have made strides towards modernizing their systems. Other potential strategies to combat the ever-shifting landscape caused by FinTech companies involve altering organizational structure, however, for this strategy to succeed many factors such as talent innovation and luck must be present and the organization must be flexible.

The overall strategies fall in line with the mentality of “if you can’t beat them, join them” because the amount of business FinTech can disrupt is fairly high. Getting ahead of the curve in terms of new and emerging technology is the crucial step in dampening the disruption.

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These strategies will become more mainstream as late adopters to FinTech get out competed and the industry matures. However, for the time being these strategies are the only way financial institutions can retain margins against the competition that is FinTech.

10 Technology Trends & Predictions You Should Pay Attention to in 2017 (Part 2)

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Welcome to Part 2 of our 10 Trends To Watch: 2017 series. In part 1 we talked about some technologies that have the potential to disrupt markets and a business model that appears to be on the rise. In this article, we’re going to talk about a few more technologies and business models that might change the world, a growing trend to be concerned about, and the ongoing trend of shifting demographics across the consumer market.

6. Voice Search

Voice search technology has been around for a few years now (can you believe Siri is about 5 years old?) but with developments in Artificial Intelligence and machine learning, as well as evolving consumer habits, voice search is becoming more common. In turn, it is becoming more integral to Search Engine Optimization. Major tech companies are realizing this trend, especially with the proliferation of mobile device use and the convenience of an accurate voice search bringing value to users, not only to the “mobile-centric” millennials and Generation Z but also to older generations. 55% of teenagers and 56% of adults use voice search daily and the trend is not showing signs of slowing down.

Amazon, Microsoft and Apple each currently have their own digital assistant, Alexa, Cortana and Siri respectively. They allmake voice search a more pleasant experience for theuser by communicating results back verbally, limiting the amount of focus the user needs to put on their screen. Other technology companies are not far behind, either developing their own digital assistant or working out a deal with one of the 3 companies previously mentioned in order to use their digital assistant.

These developments in voice search and digital assistant technology are occurring in large part due to advances in AI and voice recognition which makes the search more accurate and user friendly, providing them with the results they wanted.

With Alexa being introduced by Amazon, continual improvements in AI and voice recognition, there is very little doubt that voice search will continue to be a major focus for technology companies in 2017. Marketers also need to embrace the trend, tailoring their terms and SEO strategy to embrace voice search.  After all, it’s the future of mobile in a mobile future.

7. Cybersecurity

2016 was a year where several high-profile cyber attacks dominated the news cycle. Anyone, from private individuals, to businesses, to government organizations; it seems that nothing is safe from hackers.

With the huge amount of personal, confidential, or strategic business information online even the least technologically inclined people are aware of online threats and that they have information that could be lost to hackers. The risks of lax cybersecurity are there for everyone using the internet and while security experts and long-time internet users have been aware of the problem for decades, it seems as a result of highly publicized events that everybody and their grandmother is aware of risks online.

Nefarious groups and individuals attacking businesses with a variety of ransomware, phishing attacks and other methods of breaking online-security is nothing new. 2016 brought a new level of attention to the subject thanks to cyber attacks on power companies, hospitals and most notably the attack on the Democratic National Convention and the many email controversies surrounding the last Presidential election.

In 2017, organizations of all kinds should reconsider the defenses and systems in place to deal with a potential cyber attack. While there is very little anyone can do to preemptively strike against potential hackers, you can can invest in top of the line security, use cloud storage and maintain high employee awareness about potential threats. There must be a protocol in place for when a hack does occur to limit the damage and protect confidential information as much as possible.

In a report sponsored by Intel’s cybersecurity solutions provider McAfee, called “Net Losses – Estimating the global cost of cybercrime” released by the Centre of Strategic and International Studies (CSIS), it was estimated that cybercrime costs businesses $400 billion worldwide.

For these reasons, organizations will open a dialogue (and their wallets via investments) about internal cybersecurity this year. Security experts and firms will be in high demand and there will be plenty of discussion on how to motivate employee awareness about the threats.

8. Autonomous Vehicles

If the Consumer Electronics Show 2017 was any indication it will be a big year for automakers utilizing technology and preparing for the era of autonomous vehicles. Google has been exploring the technology for quite a while now but 2017 has signaled that other automakers and new entrants to the automotive industry will begin exploring the technology. Companies like Uber, Amazon, Microsoft and Apple are investing in self-driving technology. Automakers are also leading the trend with firms like Ford, GM, Honda, Tesla and new entrant to the autonomous-electric vehicle segment, Faraday Future, exhibiting their progress with the technology at CES 2017.

In addition to the cars themselves, ancillary technologies for these vehicles are being developed to support efforts of the automakers with companies developing sensors, bandwidth solutions and software to operate the vehicles. These technologies, while by no means new, need to be refined before they can safely be sold to consumers. The internet connection of the cars must be perfect and the software must be flawless, with any failure likely to lead to a crash, potentially tarnishing public perception of the technology.

While we won’t see any self-driving cars on the road this year, 2017 is the year that self-driving vehicles will become mainstream. Governments will consider their potential implications, companies will continue to refine and develop the necessary technologies to operate the vehicles, keeping the terms “autonomous vehicles” and “self-driving cars” in the news for 2017.

9. Drone Delivery

Another technology that may not make its official debut in 2017, but will be at the heart of 2017 conversations about supply chain management, delivering goods and the potential for automated delivery with no need for human hands (or eyes).

The reason it may not debut in 2017 is not because the technology is not available yet, drones have been in use by the military for years now, and consumer drones are available to the public at a fairly low cost. Sure, the technology for automated drone delivery is still a few years away but that’s expected.

Right now the issue with drone delivery is the fact that governments ban the flying of drones over populated areas in the United States and the fact that non-commercial drones (owned by hobbyists) have had some run-ins with air traffic.

Drone delivery will be a popular topic in 2017. Many companies including Amazon, Google, Walmart and many VC funded startups are right on the precipice of being able to utilize drones for delivery. The biggest issue and conversation points will involve the general safety of drones (you don’t want them to land on someone by accident or fall out of the sky), the ability for drones and other aircrafts to coexist in the same airspace (or the ability for governments to split the airspace in a way that works for both human controlled aircraft and drones) and ensuring a positive public perception of drone delivery in general.

The conversation regarding drone delivery in 2017 will center around the legality and safety issues of drones. Once those issues are dealt with the delivery industry should be able to continue full steam ahead. The current regulatory situation, mixed with the willingness of companies to invest in drone delivery makes this  a very interesting trend to monitor.

10. Millennials and Generation Z

It’s not exactly a trend, but definitely a shift in power, momentum and the beginning of a drastic change in the demographics of many markets. In 2017, millennials are projected to spend $200 Billion worldwide, and are projected to collectively spend $10 Trillion dollars in their lifetime. This fact coupled with the fact that 10,000 baby boomers retire daily (with the oldest members of the group beginning to age into their 70s) means that businesses are going to need to begin replacing their current generation of customers with a new generation, one that is mobile-centric, tech-savvy and responsive to different factors then the baby-boomers.

Gen Z, while its members range from recent college grads to toddlers, will have (and already has) an extreme impact on the economy. While this generation will be more educated, more likely to multitask and slightly more ambitious (in regards to owning a business or changing the world) than millennials, the two groups still have much in common; from their love of screens, to their social decision making style and constant viewing of content. A lot of the traits that make millennials seem “millennial” are present in Gen Z, just more extreme.

Compared to Baby-Boomers and Gen Xers, Millennials and Gen Zers are focused on technology, are extremely social, and listen to their networks when making decisions. They do not like to be interrupted or bombarded with ads and they do not wish to be solicited by companies. If they have a question they will ask, likely over Facebook, and expect a response ASAP.

This means that brands must begin to cater to these generations to continue to grow and thrive as businesses. That means engaging with them through creative, fun content that they can share with their friends. It means being present on the newest, coolest social media platforms to get an audience for your product. For some firms it might mean a complete overhaul of your business strategy.

It may not be a trend, but the youngest Baby-Boomer is 53 today, the youngest member of Gen X will turn 40 within the next 5 years. The future is now, and 2017 is the year to adapt.

 

So what do you think about my Top 10 Trends of 2017? Do you agree with them? What trend are you most excited about this coming year? Is it AR? (Mines AR). What trend most concerns you? Let us know on Twitter @VeridayHQ #TrendsToWatch

How Will the Industry Respond to Trends In FinTech?

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In this series of articles, We’ll be taking an in depth look at the report “Blurred Lines: how Fintech is Shaping Financial Services”. Due to the size of this report, each article will be broken down into sections based on 3 industries – banking, wealth management, and insurance. This article will focus on what exact risks and opportunities arise due to the disruption and how to counteract the disruption that FinTech is causing. .

What is the FinServ industry doing for the disruption?

From the inside of the industry, FinTech appears to be affecting a broad range of financial services. Although, the companies specializing in certain aspects of financial services believe that consumer banking and fund transfer and payments will be disrupted in the next 5 years. The graph below shows the results of the survey.

How is the current Financial Services Industry Responding to a Growing Trend In FinTech? Part 1The recent development of online banking platforms has greatly impacted consumer banking and fund transfers. Purely online banks, or banks with fewer physical branches, have begun to gain popularity due to the added value that is convenience. As an organic development from online banking, the technology to safely transfer funds and pay bills online has been developed.

There is also a high level of disruption in the insurance and asset management sector. 74% of insurers and 51% of asset managers believe that FinTech is going to cause disruption in their sector over the next 5 years. At the same time, outsiders believe that FinTech will disrupt those industries significantly less, signalling that there is industry knowledge of upcoming developments that hasn’t been diffused yet. The graph below shows the divide between industry insiders and outsiders.

How is the current Financial Services Industry Responding to a Growing Trend In FinTech? Part 1

What is the main cause? Digital experience. Clients are used to the experience other digital giants give, such as Google, Amazon, or Facebook, and they expect the same level of customer and digital experience from their financial service provider.

75% of respondents said that FinTech has made an impact on meeting changing customer needs and 51% said it has also made an impact on leveraging existing data and analytics. If these items were not on the to-do list for a company in the financial service industry, they sure are now – thanks to FinTech.

What are the members of the financial service industry going to do to counter the disruption?

  1. Banks are going for a renewed digital customer experience

The most important response from this sector is to implement solutions that banks can easily integrate or incorporate to improve and simplify solutions. Meaning, processes that increase customer experience just by reducing the amount of steps to perform an action or making it easier to do that action. The next biggest response is to move toward non-physical or virtual channels. While a portion of the consumers prefer a physical approach, banks must have virtual channels to compete with the changing industry.

  1. Fund transfer and payment priorities are security and increased ease of payment

The fund transfer and payments industry’s response to emerging FinTech trends included: creating advanced tools and technology to protect consumers from identity theft, fraud, and account falsification. This response isn’t necessarily one that could combat the emerging FinTech options, but it adds to the current value proposition. Since the existing companies specializing in fund transfer and payments have created a brand and acquired trust with their consumers, they only need to offer better value in comparison to the new FinTech companies. In addition to developing a more secure method of online payment and transfer, increasing speed of transfers in another common step to take in this industry.

  1. Asset and wealth management shifts from technology-enabled human advice to human-supported technology-driven advice

This industry will respond by improving data analytics to better identify and quantify risk and increased automation of asset allocation. The responses, however, will be leveraged with a human touch that can interpret the data and offer personalized solutions that fully automated solutions can’t.

  1. Insurers leverage data and analytics to bring personalised value propositions while proactively managing risk

Much like banks, the most important response the insurance industry will have is an emphasis on self-directed services. The increase in convenience increases customer experience as they are able to access all the information through an online portal. It can allow them to make claims, see their coverage, or access important documents. The next biggest thing is to differentiate their services by offering a usage-based insurance. As underwriting changes and technology becomes more advanced, the math behind underwriting can allow for more complex plans that allow for this. Usage-based coverage is another example of established brand to create and underwrite a complex solution.

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Developments in FinTech are causing financial service providers to move forward and innovate towards a better consumer experience. Part 2 will examine the future of FinTech and what strategies financial service providers should use to counter FinTech.

10 Technology Trends & Predictions You Should Pay Attention to in 2017 (Part 1)

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Another year  is upon us and another year of trends are soon to unfold. In 2016 we saw the proliferation of wearable technology, “Smart” homes, cyber attacks and 3-D printing. What will hit it big in 2017?

This year appears to be the year that Artificial Intelligence (AI) and Machine Learning hit their full stride, moving past the prototype phase and beginning to appear in consumer technology. Another massive trend to expect is increased focus on cybersecurity, both for private firms and for government institutions. After the Russian hacking scandal involving the Democratic National Convention, the general population is now aware of the risks cybersecurity aims to curtail.

Without further ado, here are the top 10 trends that I’ve picked to take over in 2017:

  1. Block chain
    One technology that has really started coming into its own is the development of blockchain. Blockchain is a distributed database that maintains a continuously growing list of ordered records, called blocks. It was initially described in the early 1990s but only first came to use in 2008, as the database behind bitcoin, an online cryptocurrency. The distributed ledger records transactions publicly and the most attractive facet of blockchain is that records are maintained automatically with no trusted administrator needed.Why are blockchains trending this year? Companies are beginning to see the value that the database can provide, keeping paper trails of all transactions.  Whether financially related or not, blockchain has a lot of value in today’s increasingly digital world. There are 3 main reasons why blockchain is a valuable database with potential for widespread use:

    1. The first benefit of blockchain is that any type of asset can be transferred using the database. It is not limited to financial transactions (as it is currently used for with Bitcoin) so it is a valuable tool for trade.
    2. The second benefit of blockchain is its use as a “truth-machine”. The database itself is quite complicated and difficult to explain. It’s more of a thesis paper than a blog post, but the automated method in which transactions are recorded using “nodes” has a high level of reliability and openness. Companies add additional information to a blockchain transaction, embedding that information in the ledger. Once a block is updated, it can’t be changed; creating a permanent, unalterable record. This application of the database could be used as a registry of anything needing to be tracked such as land titles, luxury goods or any good the user wishes to track.
    3. The third main benefit to companies using blockchain, and the third reason why it will be a trend in 2017 is the most ambitious application with the most potential upside. The third potential benefit is using blockchain as a database to execute “smart contracts”, programming conditions into the blockchain (which is already done by Bitcoin) that will execute transactions automatically given certain conditions. This would have many uses, both in financial services and in other industries, such as delaying payment until services are rendered, recording and automatically transferring funds and managing partner relationships.

    While these applications of blockchain would operate slightly differently from Bitcoin, the general use would be the same, an automated secure ledger. Banks and technology companies across many industries are exploring potential uses for blockchain such as issuing credits or tokens as part of a customer reward program, automatically transferring capital between funds given certain conditions or simply as a smart-ledger that can issue payments to accounts automatically.

    While traditional financial institutions may not be able to adopt the technology into their service offerings this year, 2017 will be a year when blockchain is investigated and developed for use by those institutions in the future. In 2017 expect to see financial service and technology start-ups begin to fully utilize blockchain, using it to capture market share in both developing markets and in established sectors of the FinServ industry.

  2. Artificial Intelligence
    It seems nearly everything can be made to be “smart” these days; from the development of autonomous vehicles, to digital assistants giving near human-like answers, to fridges that know how cold they should be. Every product under the sun is being developed with an internet connection so it can collect data to help make better choices.This data clearly needs to be analyzed before decisions can be made and people don’t want to access logs and spreadsheets to do that. In some applications, that isn’t even possible. That is where AI technology comes into place. 2016 saw some fantastic developments in this field and 2017 should expect the same.Machine learning and artificial intelligence will revolutionize the way connected objects can communicate and make decisions with no human input. In order for the technologies on the cusp of existence to come into fruition, AI technology will need to improve. Cars will need to make their own decisions in real time, toilets will need to know when to flush, chat-bots and robo-advisors will need to be able to understand what you are asking them and how they can reply in a realistic way, without a major delay.Artificial Intelligence lies at the heart of each of those situations. Devices, systems and objects are being designed that can process information, deal with new information and actually learn. AI can become integrated into every part of life. Major companies like Google, Tesla, Apple, Samsung, major automakers, banks and insurance brokers all rely on improvements to AI in order to make their next big innovation.2017 will be the year of AI; helping our smart-products communicate with each other to achieve the efficiency we first imagined when the IoT was first theorized. To take our next major steps we will need intelligent machines to lower wait times, increase energy and cost efficiencies, and make their own decisions to maintain our safety.Discussions about how AI will affect the economy, both short-term (as systems begin using AI) and long-term (due to automation and phasing out jobs) will also become common this year as lawmakers, and individuals fully realize the new reality of where businesses want to go next. People will have to fight back their Terminator flashbacks and realize that AI can be a great thing if we use it right and prepare for it.
  3. “As-a-Service”
    The “As-a-service” revenue model will heavily increase in popularity in 2017. Currently it is mainly used in two situations, when providing actual services (maintenance, etc) or when selling software. The model has benefits for both parties of the transaction. We will explain why using software as an example.The party providing the software benefits because they have a long-term revenue stream and can build a lasting customer relationship. If they sold the software as a product instead of a service they would get a one-time influx of cash and nothing after that until the customer decides to purchase another program (if they come to you at all). The party purchasing the software benefits from lower up-front costs, potential savings from eliminating elements of the software that aren’t needed or won’t work with that party’s system and some assurance of long-term maintenance and updating of the software.In 2017 “as-a-service” or subscription revenue models will become common across industries. Cadillac just announced the “Cadillac Book”, a new ownership model that will charge a monthly fee to provide on-demand-delivery of a Cadillac with a variety of booking options that can be done through a smartphone. The service they plan to provide (which has not been rolled out yet) is very similar to Zipcar but with a higher service level (delivery instead of pick-up).Cadillac is not the only automaker that has considered alternative ownership models. Other industries that provide high-value/high-cost products may begin to move towards the “as-a-service” or subscription based revenue model. 2017 is a time of mass personalization. Customers want every action to feel personal. They want to be in complete control of the purchase decision at all times and they do not want to be tied down with no flexibility, exactly what subscription or “as-a-service” provides. These alternative ownership models can help the spread of a product, both when dealing with consumers or selling products between businesses. The fact that the initial cost of a product is vastly reduced when sold as a service can motivate purchases. In 2017, companies will begin to sell everything from cars, to machinery, to technology as a service, giving the customer the ability to manage their needs and pay a monthly fee instead of forking out insane sums of cash to see if a product is worth it to them.
  4. Virtual & Augmented Reality
    Virtual reality (VR) is an artificial, computer-generated simulation or recreation of a real life environment or situation, like the holodeck in Star Trek. Augmented reality (AR) is a technology that layers computer-generated enhancement on top of existing reality, you probably saw it (or at least heard about it) this summer with the release of Pokemon Go. It’s the real-time equivalent to mixing CGI with real-world footage in movies.VR and AR technologies were one of the hottest trends in tech in 2016, there is no doubt about that. In 2017, I fully expect both technologies to really take off, not only in the entertainment sector, but in other aspects of life (and even business).VR, while extremely (extremely) cool does not need to rely on its cool factor to be useful in business. It can be a great tool to showcase products and services (at tradeshows, or by creating early content for VR platforms) and it could also be used to as a service itself (seeing events in other cities) or as a platform to provide more immersion in movies or games. VR can also be used as a training tool to train employees or students in high-intensity, life-and-death situations. By immersing themselves in the situation they would be able to better prepare for the real thing.AR, while slightly less cool (in my opinion) than VR has a more practical use that I believe will be explored in 2017. AR can be used to provide information and context to users in their day to day life. Their smartphone can turn into a lense that when looked through provides the user with information about their surroundings, various buildings, comments from other people about their location, and information about other people using the same program. The possibilities are endless. AR could provide more context in day-to-day life while revolutionizing information services, providing a real-time portal with any information the user may need.These technologies will definitely have a spot in entertainment over the next few years (because they’re really cool) due to the success of Pokemon Go and the hype surrounding VR. It has been proven that these technologies (especially AR) can be easily understood and utilized by the masses (thanks in no small part to our mobile devices). It is only a matter of time before they begin to trickle into other industries. 2017 is the year, watch out for AR and VR at your workplace!
  5. Internet of Things
    “Hasn’t the Internet of Things been trending for a few years now? I feel like all I hear about is how the latest, greatest device is now “smart” and can be connected to fully integrate everything in your life on one system. What do you think I’ve been under a rock for the last few years?”If that was your reaction to this section, I 100% understand. Smart objects have been around for a few years now. Instead of just recording information now many objects can “think” for themselves. The issue is not with the objects themselves, nor the ability for the devices they’re ultimately connected to to handle the data. The issue has always been around connecting the many different objects into an organized ecosystem, where the information works in harmony to provide the user with the most pleasant experience possible.With current technology this is not quite possible. Our machines are not quite smart enough to fully comprehend the world they live in. They still have flaws, more data will be tested and improvements will be made but all of that effort will be useless if a system to organize and use all the information these smart objects collect is not available.2017 is the year that the ecosystem design of the IoT will take place. Companies have already been working on creating an ecosystem but the work is not easy. There are gaps in the data, certain relationships are not yet understood and the development of “sentient tools” throws another variable in the equation however, we are rising to the challenge. The people working on these technologies see a world with ever-increasing AI abilities, a world where we understand more and more each day. They understand that for all our efforts creating a toilet that can tell you details about your nutrition after using it that a system will need to do something with all that data in order to make the data useful to us.There is great potential for cost and energy savings, better health information, better education and so many other potential benefits that can be provided by the internet of things. In 2017, the “mesh” that humanity has been working towards for so many years will take another step towards completion.

 

 

What do you think of the first 5? Do you think “As-a-service” economies have a place in 2017? Which of these technologies are you most excited about? Let us know on Twitter @VeridayHQ #TrendsToWatch

4 Steps for Marketing in the Digital World

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This article was written by Guidevine’s Head of Advisor Success, Khalid Usmani, and can be found here

Marketing is the cornerstone of growth for any business, and as the adage goes, one has to spend money to make money.

But advisors must ask whether they are spending their marketing budget effectively and whether their strategy is keeping up with consumer preferences.

An effective marketing and branding strategy should position an advisor and firm to evolve with consumer preferences. Not only must the messaging resonate with the target audience, it must also be easily accessible to them.

Clients are online, whether it is creating a Pinterest board for a new outfit, watching a YouTube video for a cooking recipe or checking their Instagram feed while standing in line at Starbucks.

And when it comes to financial information, studies show that 54% of high-net-worth investors between the 55 and 64 use LinkedIn for financial communication and research.

So advisors should be online with them. And the best way to do this is with an omni-channel approach to marketing.

Although it may seem that one social-media network is more important than another, each platform serves a unique purpose. Two-thirds of adults with investment accounts have a social-media account, so to ensure that advisors reach these prospective clients, it is important to be available to them on all platforms.

But it isn’t enough to simply post to multiple channels. With the vast amount of information online, the challenge to actually get the message through is increasing.

An advisor’s content must be interesting, engaging and relevant. Quality content about the client experience, investment approach or thoughts on the market can help enrich a digital footprint and keep people coming back for more.

Where to Begin

Here are some thoughts to get started on effective marketing in the digital world:

1. Clarify the target market and the firm’s objectives. Are you trying to reach a particular market niche; a specific age group; an interest group?

2. Create consistent and connected digital accounts (e.g., LinkedIn, Twitter and YouTube) to reach more consumers.

Do all the firm’s accounts carry consistent branding? Is it using a dashboard to manage accounts and ensure that posts are well-timed and appropriately coordinated?

3. Share and create interesting, informative and relevant content. Keep number one in mind when creating original content and links to others’ posts that will resonate with the firm’s target audience.

4. Engage with the audience, so that it is a two-way conversation. Advisors must ask themselves if they provide meaningful responses to comments on posts?

With 63% of affluent consumers taking action after learning about financial products and services on social media, an advisor’s digital presence must be relevant and robust. Considering these four steps will get the ball rolling.