November 21, 2016

FinTech conference, why your insight matters more than tech (part 2)

By Paul Laughlin

fintech conferenceHere we continue our two-part series on lessons learnt from #CXC2016 FinTech conference.

Hopefully this provides some learning points, not just for those working in Financial Services, but all those in businesses facing disruption from technology & start-ups.

To complement part 1, which focussed more on presentations from incumbents or traditional business models, here I’ll share the highlights from a variety of other presenters.

I’m pleased to say a number of common themes continued:

  1. Importance of understanding your customers & the jobs they want to get done;
  2. Pay attention to the details;
  3. Recognise that the ‘millennial’ mindset affects older generations;
  4. Apply ‘design thinking’ to innovation & testing;
  5. Co-create with your customers;
  6. Pay attention to employee insight & experience;
  7. Partner with suppliers you can trust.

Here are some of the other contributors & key points I took away from their sessions at this FinTech conference…

Peter Neufeld (Partner at EY-Seren)

Shared a number of slides on the pace of change in digital adoption & how so many apps are changing the way we manage our lives (think Uber, AirBnB, Apple Pay, LinkedIn etc). It was also interesting to note that more new banks have been launched in the last 10 years than in the previous 30. Many have very different business models, like Mondo, Atom, Number26 etc.

But what was most interesting, for me, was that Peter referred to behavioural biases & the need for new defaults. One phrase used for a HBR article was “Retirement Planning needs a new UX”. The point being that many aspects of managing finances need to be redesigned to be as easy to use as mobile apps.

Taking on board behavioural biases means changing the impact of people doing nothing (think Auto Enrolment for pensions). What could this approach mean elsewhere in FS? Taking on board the importance of mobile channel, means considering context (as we have emphasised before). How could simple single task FS apps, that understand customer data, location & timing – greatly simplify & encourage appropriate financial actions?

Jamie Bell (Head of Banking Intelligence & Themes Unit at the FCA)

It’s always good to see regulators get out & about. Especially encouraging is seeing them engage and talk to innovators & CX/Insight leaders, not just the senior leadership of incumbents.

Jamie covered the opportunities that technology can provide to help people get better outcomes. But, also raised the importance of a number of key pieces of coming legislation, as well as GDPR this included PSD2.

Of more interest for this audience was his summary of the key findings from recent thematic review into Packaged Bank Accounts. This had lessons to learn for incumbents & pitfalls to avoid for new entrants.

Some of the key themes from that review are:

  • Where procedures were followed, customers got positive outcomes in 95% of cases.
  • But customers only got positive outcomes in 44% of cases (policies not being followed).
  • Record keeping was poor, only best firms are keeping digital records needed automating process.
  • The best firms had taken onboard learning from Behavioural Economics & tested comms for biases/outcomes.
  • Too often senior leadership don’t know what is happening in customer experience front-line.
  • Slick processes do not necessarily = fair outcomes for customers (need research & testing)

As a consultant who advises firms how to best use insight to meet their Conduct Risk responsibilities, it was encouraging to hear Project Innovate mentioned as well. Too few firms are making use of this regulatory ’sandbox’ to test comms & other changes that might breach current rules but could demonstrate behavioural evidence  for better outcomes (and so get a waiver).

Patrick Felixson (Head of Customer & Counterparty Data for Nordea Bank)

He offered an important reminder as to the importance of data governance.

As well as reviewing the importance of data quality and a single customer view. Patrick rightly emphasised that firms need effective Data Ownership. This cannot be left to IT but needs to be embraced by the business. Only then can effective business controls & prioritization guide both issues as they arise & improvements of capability (towards full Master Data Management).

Interestingly, Patrick summarised Data Ownership as covering these three areas:

  • Data Subject Owner (probably director level, accountable person);
  • Data Asset Owner (platform owner, often project sponsor);
  • Data Content Responsible (data capture/entry teams, normally customer facing).

It’s worth reflecting honestly on how well you have this in place in your own organisation (alongside the need for metadata management).

Andrew Nation (Senior Manager at Cisco Systems)

With so much focus on innovation through app development, digital CX design or major systems integration (all represented in exhibition hall), it’s good to be reminded of video.

Although most of us will be familiar with Cisco & may well use WebEx for online events, fewer may realise the range of video conferencing & telepresence solutions that they implement for businesses. With regards to innovation in this sector, there has been much talk about the rise of video & remote advice, but few case studies of mass roll-out.

Andrew was able to share his experience of leading such a project at Nationwide Building Society, before leaving to join Cisco. Implementing video conferencing solutions in branches, especially more remote branches has clear customer benefits. Not having to wait for an appointment with a trained adviser, flexible to meet at times that suit the customer & still the benefits of face to face conversation.

They’ve also, sensibly, produced a video to explain this solution to everyone (not just internal comms):


As is so often the case, the technology part proved to be the easiest part of the project. The real challenges lay in implementing solutions that worked for people in practice. Use of an iterative, agile methodology appears to have worked well for Nationwide. Stages of capture, model, design & deploy, included simulation models, pilots & scenario testing.

Perhaps most pleasing for customers in rural communities is that the economics of this solution has enabled Nationwide to avoid branch closures in several places.

Will Beeson (Head of Operations & Innovation at Civilised Bank)

It’s fitting to close this recollection with a start-up that has not yet launched.

Yet to be born, you might think that the focus of this bank would be all about utilising the latest technology (from blockchain to AI). However, that was not the message shared by Will.

Having assessed the market for business banking in the UK, they have identified a sector they believe is under served. Two key themes of the event were reiterated in this talk, the need for human-centred design & to clearly understand your target segment (& why). Good advice for all banks.

Will distinguishes his start-up from both “traditional challenger banks” (disrupting through service, but traditional business models – like Metro or Aldermore) & “digital challengers” (like Monzo, Atom et al). Civilised bank see digital/mobile technology as more of an expected hygiene factor, with the real differentiation being affordable relationship banking.

Their target market are more to the medium end of SME (£1-25m turnover). It was good to hear that they had done their market & competitor research, to understand that this sector is under-served by relationship banking. This is often because the cost would be too high for existing banks with legacy processes/systems, given scale of this segment & lower margins.

Where Civilised will make use of tablet based digital services, backed up by cloud based back-end system, is to lower the cost of providing such service. Making it possible to both sit down in person with the customer & to tailor offerings to the different needs of different businesses.

An interesting part of their ethos is that they don’t see themselves as ethically required to serve everyone. In fact they see the future of banking as more segmented.

Concluding remarks

I hope you found those FinTech conference recollections useful, especially if you work in Financial Services.

What encouraged me most, was to still see that those succeeding with technological innovation are also doing so because of Customer Insight.

A focus on really understanding your target market & the jobs those customers need to get done, can really empower human-centred design. Embedding cultures of customer centricity and measurement, with continuous test & learn cycles, can achieve sustainable improvements.

Fancy new uses of technology & start-ups might grab the headlines. But to really make a commercial success — they need Customer Insight Leaders.