Steven Ramirez reflects on the recent demos and what they tell us about fintech today
As the CEO of Beyond the Arc, Steven Ramirez and his team use data science and their expertise in marketing to help clients improve customer experience. He’s a long-time member of the Finovate community and a thought leader in fintech, so we asked him to give us his thoughts on the demos of FinovateSpring 2019.
What did the demos at FinovateSpring tell you about the fintech journey?
I identified four key themes that convey the current state of financial technology.
First, I was struck by innovative uses of existing technologies. These are the new spins on everything from SMS/text messaging, to novel email platforms, to co-browsing and chat.
Second, Machine Learning is embedded. This means that predictive learning algorithms are baked-in to a wide array of platforms and apps.
Third, affordable cybersecurity. With data breaches becoming an almost daily occurrence, banks without a billon dollar IT budget need robust protection they can afford.
And finally, scalable empathy. Banks and credit unions want to deliver on the promise of personalization. Digital offerings, eventually powered by AI, can help them to better know, and respond to, each customer in a way that’s most appropriate for that relationship.
How have the demos at Finovate evolved over the last few years and what do you take from that evolution?
Fintech partnering strategies now dominate the conversation, on all sides. As an industry, we’ve seen fintech move away from an “us” vs. “them” mentality. In San Francisco, we heard a lot about “white label” solutions. In the most recent demos, startup companies emphasized how they work with banks and credit unions. Visit the Finovate website and view some of the videos from 5 years ago to see what a huge shift this is.
By the way, I would note that the banks’ perspectives have also changed. They realize that there is a lot they can learn from fintech startups. The technology development process within a bank is optimized for reliability, not agility. Aside from a select few, most banks cannot get new digital services to market quickly.
The other evolution is the growing acknowledgement by fintech of the importance of compliance. New companies are adding compliance advisors even at the earliest stages. They realize that while a bank may agree to a pilot, it won’t move forward into full production unless all of the requirements are met. As a result, the demos at Finovate generally reflect startup companies have done their homework.
What are the customer pain points that can be solved with new technologies?
In financial services, legacy providers have been product-centric. They offer accounts, they assume that people shop for accounts, and they do their best to match customers and prospects with those accounts.
But, what if I’m not in the market for an account? Instead, what if I want to build a stable financial foundation, plan for the long-term success of my family, and pursue the things that bring me personal joy? There’s no account for that.
Fintech can help banks pivot, changing their focus so that the bank understands, and meets the needs unique to each and every customer. The focus isn’t just on removing the pain points and easing friction. At the heart of this is financial wellbeing. And it is different for everyone.
What type of organization helps people to clarify what is personally important to them? Helps them create strategies to reach their goals? Provides tools to monitor their progress? And perhaps, offers advice to get them there more quickly? I’ll wager that no one answered, “a bank”.
The promise of technology is that an FI can offer this personalized experience at scale. They can serve more people, far beyond what today’s staffing model allows. Using insights from machine learning, banks can help people see around the curve. This is what it means to be customer-centric, and to begin creating experiences versus offering products.
How will changing consumer behavior transform financial services? Can customer empathy be scaled?
As consumers, we’ve seen other industries evolve to better meet our needs. They understand what we want, they deliver value, and some become an integral part of our lives.
You can blame Starbucks, Netflix, Amazon, and a handful of others for spoiling us. We take these expectations into the online and in-person interactions we have with our bank.
And most banks, credit unions, and other FIs don’t measure up. Our bank doesn’t really know us, doesn’t reward us for our loyalty, and certainly doesn’t offer experiences that delight us.
To deliver empathy at scale, I think it requires two things. First, incredibly deep customer insights. Second, you have to actually use those insights to tailor the product, experience, and message to each person.
