Holly`s views on fintech
I’m impatient. I want to change things now. If version 3 of my website is live, in my head I’m on version 8. I live in a permanent state of exasperation that people aren’t faster. However I’ve also learnt to be practical. There is a balance to be had between seeing the future and building the path to get there. So, my continual question when it comes to technology is, that’s great but what can I do over the next three months to get me a little bit closer?
Here are my take-outs on fintech in the investment space today.
Three themes: Collaboration. Customer-centricity. And using AI to enhance advice.
Collaboration is almost synonymous with Open Banking and the demo from Moneyhub really showed the power of consolidating our money information across all areas of finance. Makes so much sense from the customer point of view. Bud is a smart group building an exchange and already has AJ Bell Youinvest, Scalable Capital and Wealthify signed up on the investing side. I am all over Open Banking and think it has to be central to our thinking and strategies.
We were able to show our new data partnership with Harbr and to start to bring to life the power of aggregating data from multiple sources and blending qual insights (customer feedback) with quant research. You might all be slaves to your NPS score but a number alone highlights a problem without giving you the answer. If you have customer reviews to add to the mix then this answers the “Why” as well as the “What.”
eToro and Clever Circles are all about the wisdom (or folly?) of crowds. Taking crypto trading to the mass market is not something to be proud of (IMHO) but I also think it’s foolish of us to ignore the interest this generates and how it brings people to the ‘investing’ space. It unleashes a whole lot of dopamine (the pleasure vibe to be found in orgasms and almonds!) that gets our brains into receive mode. Something that traditional content and bog standard investments just don’t do. So I don’t tut and judge. I think about how I can learn and copy.
Open Banking and sharing data is the most dramatic catalyst for change I’ve seen for some time. There are parallels with open architecture debates here – “why on earth would we promote things from our competitors!? Why would we give away our crown jewels?” You can polish your tiara in isolation all you like, but it won’t impress anyone sat in the safe.
Customer-centricity was in evidence from the VCs who challenged solutions looking for a problem. Angel investor, VC and NED Dharmash Mistry talked eloquently about meeting customer needs and doing one thing very well. The winner of the popular vote was insurance play Anorak which effectively filters the market and presents people with a small number of choices in simple architecture.
No-one will forget Tim from Made By Many who railed against poor customer experiences (ATMs, rail ticket machines, pointless buttons on traffic lights) and told us to double, triple what we spend on consumer testing and to get our customers involved in the design process more. Swearing more than I think anyone has ever sworn at a finance conference before, but doing so in the voice of an angry customer so cunningly evading blame. He built an app for Nando’s staff and talked well about getting them involved in the design.
A future price war was predicted – Dharmash called out Robin Hood in the States - and newly funded Multiply are contemplating offering their advice services for free, in a “grab the eyeballs before wallets” tech-type approach to product launches. I have no doubt that we will see platforms question their revenue models (do we still charge for trading or open up alterative revenue streams), investment managers cut prices and advisers get much sharper on where they add value and how – and soon.
Although often confused with the well-established ‘computer program’ which let’s face it is not new, A.I. was shown with a great demo from Pefin in New York (the US’s first A.I. financial adviser) and a walk-through with Altus and Wealth Wizards closer to home. Rather brilliantly, IFA Lesley James shared her thoughts on how she is working with an A.I. platform and using tech to teach a machine to do things her way. So it’s not just cookie-cutter stuff – the machine is learning from her and so the resultant product and advice will be her baby, not some other adviser’s baby.
Seeing how A.I. will let Pefin evolve and deliver advice at $10 a month was thought-provoking in the extreme. That’s surely a topic of discussion in many a US boardroom today.
Our first Fin-k Tank showcased data (critical) , Open Banking (game changing), blockchain (longer-term anarchic dismantling of our processes), crypto (yikes, ‘nuff said), A.I. (cheaper, smarter advice for the mass market), copy trading (interesting if tweaked to avoid optimistic assumptions of consumer interest), robo advice (Mark 2 not Mark 1 online decision trees)…thanks to Aviva for hosting and to our supporting partners Altus for their great sessions.
My take-outs are. Think hard about Open Banking. What does it mean for your model. Use data well. Bring in more customers to your product design phases. Think very clearly about what you do and revisit your business in light of the new technology. Write down three bullet points on what it is that you do for your customers. And then think about your operating model. Is it still fit for purpose? What tricks are you missing. How are you making money. Is it still the right way – do you have other assets which you are not capitalising on. And don’t keep the tiara in the cupboard. Diamonds need light to sparkle. This is the age of collaboration.