Some of the trends that I’ve seen in the market in the last few years, especially a few that have picked up scale during this global #covid19 crisis —
#1 Contact-less & touch-less payments
We’re already seeing a hockey-stick surge in e-commerce as big and small stores, shops and even medical services pivot to digital-led capabilities including tele-health consultations, curbside pickup and touch-less payments.
All forms of digital commerce and payments will be incorporated within the ecosystem of small, medium and large businesses and there will be an active use of digital for services that were traditionally delivered via face to face interactions (eg. financial advice, healthcare, workouts, events and more).
# 2 DIY banking + Do It Together banking
Wealth, Mortgage, Credit cards, loans, personal banking, investing, moving money — all these functions and more will be more of a collaboration exercise between financial advisors and clients.
This would mean customers and advisors sharing a common portal whereby either of them can upload documents, share common workflows, communicate with each other, provide and receive financial advice and recommendations for a full-service experience.
#3 Financial products & services personalized to your needs
You will see financial products & services personalized to your needs, whereby a silicon valley 50 year old investor is provided with wealth management and trading as a packaged service by default, whereas a 20-year old millennial might be given a package around credit and other savings accounts.
By combining the power of transactional and social media data, customized highly personalized products can be offered to different segments of the population as per their needs, motivations, stage of life and behaviour.
This also means building products in a modularized way, where every single product is broken down into capabilities that can be re-used and leveraged to build customized experiences for other user groups eg. Onboarding and activation in US would be different than onboarding in Asia or Australia, hence ‘onboarding’ as a capability can be built as a re-usable module which can be tweaked to fit different usecases.
#4 Tech companies turning to banking & financial services
Google, Facebook, Amazon, Apple – everyone is trying to get a bite of the finech pie.
However in order to do financial services properly, companies need to be very adept at regulation/ licensing and compliance requirements. A few questions arise —
- do you want to start owning infrastructure (be in charge of your own destiny)?
- do you want to own licensing and be responsible for regulatory requirements? — this in itself requires heavy lifting with the need to hire proper bankers and compliance people.
- do you want to completely own this market (go deep into this domain)?
- would you risk your own cash positive existing business to get into a new financial services opportunity?
Partnerships and collaborations between social & ecommerce tech platforms, fintech and banks — therein lies the direction of new business models in the foreseable future.
#5 Banks turning to tech
Banks have been going after the digital revolution for quite sometime now. However banks are not nimble enough to cater to the dynamic consumer needs. Well designed products offer a better customer experience, however fintech solutions need to be well-designed from a business and operational aspect as well to serve customers in their best interest.
Currently, banking products are adversarial for large mass retail and mass affluent clients. Banks do a good job of serving top clients (private banking), however products haven’t been well designed (eg. overdraft fees, poor customer service) for the average American.
Large banks would still need to exist in order to bank large companies. However, with social media and ecommerce platforms crunching away at the financial services pie, banks might want to tighten their pants to serve the average consumer better.
Impact of COVID and moving forward
- we’ve achieved 5 years of change in the last 10 weeks, enabled by technology and “agile” thinking
- trends towards #cashless & #contactless payments were already underway, but now are accelerating
- there would be an enhanced emphasis on values with respect to data: security, fairness, accountability, benefit for the customer
- digital products and services would still require the human touch. Personnel would need to be retrained with new skills to ensure we engage effectively via remote channels
- there has been a digital response to human crisis and hence there’s going to be a digital recovery as well.
- Recovery will be digital and domestic first in all its different aspects
- If consumer behavior changes, than businesses that serves them are going to change as well; particularly important for small businesses
- For sustainable recovery, businesses need to adjust their business model to the digital world