Nearly every day that passes brings new examples of how finance is being molded and remolded by technology. Sometimes, however, the clamor of innovation is so loud that it’s easy to lose sight of the unique ways in which fintech touches on different sectors.
Tradestreaming spoke with five industry experts who shared the trends that are having a major impact on the financial services and products they offer.
Brands from outside the finance industry set the experience bar high
Joe Salesky, CEO of CRMNEXT
Salesky believes that the finance sector needs to take its customer service cues from big-name brands like Amazon and Apple. “Amazon has proven that if you make it simple to interact, they’ll do so much more with you,” said Salesky.
He’s also convinced that Apple products are a perfect example of how multiple bank products should work together. “Your Apple products, you tend to use them a long time, and oh by the way, they tend to work really well with each other. Getting another Apple product makes it easier than switching to Android. With banks it should be the same. ‘Gosh, I’ve got these things with the bank, it’s super easy to pop open a college fund,’ it should just be so simple.”
Of course, big brands have things to learn from banks’ approach to fintech as well. The 2016 Temkin Web Experience awards recognized two banks, USAA and Regions respectively, as the cream of the UX crop. Amazon came in third.
Desktop software is joining the rotary dial phone
Rob Maurin, VP of marketing and brand engagement at Wave
Accountingtech is becoming increasingly critical for hyperconnected small businesses. Maurin cites two industry trends that were critical in shaping accounting technology. The first is the switch from desktop software to the cloud. “Nobody is innovating in desktop software anymore when it comes to software for small businesses … At this point, the business owners that I talk to, overwhelmingly it’s just a given that they’ll be doing their accounting in the cloud.”
The second is the willingness of SMB owners to turn to a startup instead of an incumbent, a fairly recent change in the history of finance. For credit card processing and lending, “the notion of going to a fintech company first for that kind of solution – in 2010 that simply didn’t exist. Now, in 2016, it’s a well established thing.”
Big data is, well, a big deal
Andrew Downin, managing director of research at the Filene Research Institute
For credit unions, emerging fintechs have presented both a growing challenge and an opportunity. Due to the ease with which potential and existing credit union members can find competitors, “it’s more imperative than ever for credit unions to identify fintech partners that may be able to deliver fintech products and services better than the credit unions that work with them,” said Downin. The other option is of course for credit unions to work to become experts in the fintech products and services they want to offer.
The next big thing for credit unions? Algorithm banking and big data. “We see a lot of opportunity for credit unions there … not only to generate a profit, but to serve the members.”
Don’t underestimate the power of financial education
Eduardo Casas, VP and general manager of ValoraLife, MassMutual’s new life insurance product for Latinos
Casas is aware of the fact that technological developments are having a huge impact on the insurance sector. “Technology is moving fast – today that’s the way that consumers are interacting with financial organizations.”
However, fintech is still incapable of completely overhauling traditional insurance. “At this point there’s a lot of complexity in financial planning – consumers are looking for someone to lead them through a process, to help them understand … there’s definitely and important role for financial advisors and the type of financial advisor that MassMutual brand offers.”
So while the 165-year-old company is investing heavily in bringing more technology onboard, the trend that Casas predicts will become increasingly prominent in the Latino sector is financial education. “Financial education is going to be fundamental to the prosperity and growth of the Latino consumer,” said Casas.
Search engines are rearranging marketing
Stuart Robertson, president of Capital One Advisors 401(k) services
One of the trends that helped drive the development of Spark 401k, Capital One’s newest 401k product for SMBs, was the specific way that SMB owners have begun to use technology. “We’re seeing more and more SMBs using different digital means to research and interact with financial services,” Robertson noted.
While SMB owners’ research methods may be up to date, fintech developments haven’t made a dent on their conception of 401(k) costs and risks. “These core misperceptions … haven’t changed in eight or nine years,” said Robertson.