#Credit #card fraud is a big problem, with an increasing number of companies launching products to patch the problems. The most recent example is #Final, which today announced it is shipping its first consumer product: disposable credit card numbers. That’s lovely, but in doing so, it serves predominantly as an example of a company fixing a serious problem from the wrong side of the fence. Read More
San Francisco-based #Fundbox bolsters its leadership with four new appointments.
FinTech – Finance Magnates | Financial and business news
At the end of the day, the bloodiest battleground in #banking is “real-time analytics for relevance in the financial relationship, and the partnerships that go into that relationship that allow that to happen.” This observation by Chris Skinner, founder of The Financial Services Club, is absolutely on point.
Banking is really about leveraging data to provide insights to customers just when they need it, in the way they prefer, through physical or digital channels. This means offering a delightful experience every time customers interact with their bank. But for this to happen, #banks need the right partners.
THE RELEVANCE STRUGGLE IS REAL
Let’s face it: banks are struggling to stay relevant in their customers’ lives.
When your customer does not know her branch director’s name anymore, or when customers avoid going to the bank more than their dentist’s office, it means the bank is losing relevance.
When customers only check their account balance, withdraw cash from the ATM and order a transfer from time to time, the Bank is not being relevant.
When customers are used to positive digital experiences with Apple, Google or Amazon, and don’t find a similar experience when dealing with their Bank, the Bank does not meet new generations’ expectations.
When customers get an instant loan from a new online lending platform, the bank is getting dis-intermediated. When customers are increasingly looking at crowdfunding and crowdlending platforms to make a better use of their money, the bank is out of the game.
As the above examples illustrate, relevance is the name of the 21st century banking game.
HOW TO STAY RELEVANT IN THE DIGITAL ERA
So how can banks stay relevant, or even gain relevance, when customers interact less and less physically, are lured by alternative options and even avoid dealing with the Bank?
Simply by impacting customers with the right solutions at the right time in the right way.
I know – easier said than done!
The best place to start is with the core function of banking: help customers better understand and manage their money. Basic, right?
But wait – which customers are we actually talking about?
The answer is all of them: the ones that are barely scraping by right up to the ones with money to burn. By all means, their bank should be reaching out to each and every one with properly segmented educational material, physical interactions and digital tools. Proactively and timely, at the different stages of their life.
To illustrate the potential contribution of #Digital Money Management (or PFM) to improving the lives of all kinds of customers, let’s separate them by saving capacity* (i.e. amount of disposable cash at the end of each month) and take a closer look. Depending on their needs and priorities, I’ll show how each customer uses the PFM features most relevant to their day-to-day financial life.
(*Separation by saving capacity is done for the sake of the argument, with no intention to oversimplify)
PFM FOR CUSTOMERS WITH LIMITED SAVING CAPACITY
These customers will generally be extremely cautious with their spending, withdrawing a maximum of around $50 from the ATM at a time. You know the type: The odd extra purchase. Minimal savings.
What these customers will love is the ability to visualize their expenses, which also come automatically categorized. They are more likely to set budgets for each category to effectively track weekly spending. Once they understand the meaning of Ok-to-Spend, they will check it often to eliminate those nasty, embarrassing surprises – no more “Card Declined” or “Insufficient Funds”.
Naturally, these customers love discounts and will appreciate receiving highly relevant offers in line with their spending habits. With the right software, their bank will be able to use machine learning algorithms to match merchant offers with customers’ purchasing behaviour at key moments in their buying journey. Before making any purchase, these customers might even check their app to see what-if they make the purchase, and how it will impact their balance and budget for that category.
Armed with these digital tools, the bank is truly helping customers with limited saving capacity to spend smarter and budget better. With this newly found discipline, such customers could even begin to start saving a little!
PFM FOR THE SAVINGS-CAPABLE (CASH-FLOW POSITIVE)
These customers generally focus on building future savings despite holding some debt, perhaps from financing their University degree or buying a car or acquiring a property. Still, they have a higher capacity to spend, and should therefore take care to spend and invest wisely.
Ok-to-Spend is an especially useful indicator for them since it factors in all direct debits, contributions to savings goals and even identifies spending patterns. The other side of the same coin would be Ok-to-Save which will become a monthly reference to build even more savings up.
Automatic categorization will shed some light on their spending and possibly help correct some (bad) spending habits. The good planners will start setting budgets online to better control expenses and creating savings goals to fund a recently announced wedding or summer holidays to Europe next year. Savings-savvy customers will especially appreciate perfectly-timed, personalized alerts and push notifications received from their bank, which is helping them gain full control of their financial situation without being overly intrusive or irrelevant.
Finally, cash-flow positive customers can get a broad overview of their finances and forecast and anticipate expenses looking at their personal financial calendar. This feature improves their receptivity to relevant merchant offers, product recommendations and financial advice that are relevant to their actual financial situation and lifestyle preferences.
PFM FOR AFFLUENT CUSTOMERS WITH HIGH SAVING CAPACITY
In my early-days experience in private banking, I learned that wealthier customers generally keep a very close eye on their money (maybe that’s why they’ve been able to accumulate so much) and can even be the greediest!
However, their higher capacity to save does not mean they don’t (want to) control their spending – a common misconception. Visualizations are welcome, and not only for their investment portfolios.
Actually, having an aggregated view of all their bank and card accounts, automatically categorized, visualized and analyzed, is a kind of nirvana very few high-savers have reached with their bank.
These customers are very used to receiving and even paying for financial advice, having their portfolio rebalanced, and taking risky investment decisions – but what does their spending actually look like? No clue. What if they are losing part of their investment gains in bad spending habits? No idea. Of course, some affluent customers won’t care – but others will.
Furthermore, they and their wife (or husband) will love receiving luxury merchant offers on their smartphone that fit their exquisite lifestyle and social status.
By being proactive, pushing the right notifications at exactly the right time, and providing personalized recommendations, banks can become or and remain relevant in their customers’ lives, which is absolutely crucial in the era of digital transformation.
Banks ahead of the customer experience curve are already (re)engaging with customers on a regular basis. They are already (re)building their relationships in a digital world. They are slowly but surely becoming the financial companion their nature mandates.
What’s even better is the full spectrum of customers would be grateful for such a delightful banking experience, each in their own way – even the ones who had previously lost faith. They would not be looking elsewhere, why would they?
[linkedinbadge URL=”https://www.linkedin.com/in/xaviermarcillac” connections=”off” mode=”icon” liname=”Xavier Marcillac”]
Xavier Marcillac is VP APAC at Strands and this post was originally published in Strands #Fintech Pulse
Startups should be ready to pivot if the current climate demands it and build even closer ties with clients.
FinTech – Finance Magnates | Financial and business news
Finance Magnates speaks with #Fluent‘s co-founder after its recent #fintech event.
FinTech – Finance Magnates | Financial and business news
Imagine a washer that autonomously contacts suppliers and places orders when it’s low on detergent, performs self-service and maintenance, and schedules its cycles to take advantage of electricity prices; a connected car, smart enough to find and choose the best deal for parts and services; a manufacturing plant where the machinery knows when to order repairs for some of its parts… Read More
RMB usage in the US was a mixed bag, despite retaining its spot as the 6th most utilized world currency.
FinTech – Finance Magnates | Financial and business news
US #presidential #candidate #Hillary #Clinton has announced she will #support #blockchain applications as part of her planned tech platform.
fintech techcrunch
#Blockchain, artificial intelligence (AI), machine learning and Big Data will transform #capital #markets, according to #German #stock #market #operator Deutsche Boerse. It urges established financial infrastructure players to start approaching #fintech firms and consider partnering with these innovative ventures.
In a new report entitled ‘Future of Fintech in Capital Markets,’ Deutsche Boerse, in collaboration with fintech research and advisory firm Celent, analyzes the potential impact of fintech on market infrastructure incumbents and highlights the opportunity for providers in partnering with these new innovative ventures.
According to David Easthope, senior vice president and responsible for the securities and investments practice of Celent, pioneering fintech firms are transforming major parts of the financial services ecosystem. He urges incumbents and fintech firms to start pursuing a collaborative approach, arguing that fintech will mostly likely shape the future of capital provision, #technology, and other industry workflows.
In 2015, about US$ 19 billion in capital was invested globally in fintech across approximately 1,200 deals, highlighting the general appetite for financial services disruptors.
The report points out five capital market fintech clusters and technologies:
Blockchain technology and distributed ledgers have the potential to substantially change the nature of issuance, and potentially enhance exchanges&8217; role in price discovery, access liquidity, reduce frictional costs and offer a path to a more efficient core market infrastructure.
Post-trade digitalization: firms are looking into Big Data, AI and advanced analytics to process and create compliance and regulatory reporting. Regulatory technology (regtech) is an opportunity for incumbents to improve their operational efficiency, reduce systemic risk, and provide additional revenue-generating opportunities.
Machine learning, predictive analytics and Big Data technologies, will impact capital markets by providing tools to mine data across the value chain. New methods of data delivery and tools for insight and prediction will allow firms to make better decisions around allocation and risk, and investors to gain access to next-gen index products, ETFs, as well as other innovative trading and investment products.
Investment technologies, including automated investment management tools or #robo-advisors, are gaining relevance as the industry continues to shift towards automation in asset allocation and rebalancing. On the retail side, customers are shifting to cloud-based digital solutions that are accessible in terms of pricing as well as usability.
Alternative funding platforms and peer-to-peer business models are reshaping traditional channels for equity and debt capital formation, opening up new networks for accessing capital. Financial market organizations can capitalize on this trend and provide new solutions to the financing and funding market.
As trends in digitalization accelerate, established technology firms and market operators will need to collaborate with new business models and innovative technologies.
“Market participants need to continually evolve and innovate their business models,” the report says.
&8220;The financial market infrastructure provider of tomorrow will have leveraged its leadership in regulation, market structure, trading, clearing, and settlement to guide startup fintech firms in the journey towards creating an effective and safe capital market for the twenty-first century and beyond.&8221;
The report was released simultaneously with the announcement of Deutsche Boerse Group&8217;s new corporate venture capital platform, DB1 Ventures. The team, based primarily in Frankfurt, said it will invest in early to growth stage fintech firms and manage the group&8217;s existing portfolio of investments.
According to Carsten Kengeter, CEO of Deutsche Boerse, the idea behind DBI Ventures is to allow the group to continue on being an active investor in the space. DBI Ventures will primarily focus on ventures and products that &8220;are core or adjacent to our client, product, geographic and technology strategy,&8221; according to Kengeter.
Committed to keeping up with emerging fintech trends, Deutsche Boerse has been involved in the space via various means. In April 2016, the group launched its Fintech Hub in Frankfurt, an initiative aimed at acting as a cluster for German financial innovation.
Deutsche Boerse is also an investor in Digital Asset Holdings, a developer of distributed ledger technology for the financial services industry. In November 2015, it invested in Illuminate&8217;s IFM Fintech Opportunities Fund, which focuses on areas such as compliance, regulation and connectivity.
In July 2015, Deutsche Boerse acquired forex trading digital platform 360T for 725 million euros.
Featured image: Deutsche Boerse by Jochen Zick, Action Press, via Flickr.
The post German Stock Market Operator Releases Paper On How Fintech Will Reshape Capital Markets appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
IBM has announced the opening of a new office for #blockchain coders in a trendy New #York City neighborhood.
fintech techcrunch
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