To Prosper, Banks Need To Move From Products To Customer Financial Wellness

Tom Groenfeldt

Banks will have to rethink their approach to customers and move from being product-driven to focus on customers and service, said Pascal Bouvier, an experienced financial services professional who has been a venture partner with Santander Innoventures since the end of 2015.

He is constantly investigating the latest developments in fintech for investment potential, to find stimulating new ideas, and to stir things up through his extensive commentary, like his predictions for 2016 on Finextra  and his blog. Banks face some fundamental challenges, he said in a recent conversation.

“It’s not only being digital, but also thinking about what is the core of the bank. Yesterday it was easy, it was the checking account, but I don’t think that is necessarily the case going forward. Legislation, especially in Europe, makes data from checking accounts accessible to a third party or two [at the customer’s permission or direction], so you can’t keep a customer with a checking account and poor customer service.”

Customers will be able to link outside service providers to their checking account, potentially leaving the banks as a low-value utility provider. Banks could take a lesson from technology companies, something they could learn from the book Platform Leadership, which Bouvier said is still the best book on platform strategy, examining Intel, Cisco, and Microsoft – companies that really understood platform strategy.

“Banks will have to act more like technology companies. They will have to be fintech incumbents and have a platform strategy, while in the past they used to be siloed.” Now, at least in Europe, they will have to share customer data.

“If I have an account and give assent to Google or Amazon to monitor what goes in and out of my account, the bank can’t do anything about it. If banks don’t pay attention to these nonbanks entrants, they risk becoming utilities.”

He cited the experience of a friend who got a call from a tier one New York bank asking if she would like to do something with the large amount she had in her checking account. She explained she was holding it for a down payment on a mortgage, and asked for a referral. Two weeks later no one had called; she called the bank’s mortgage department, had no success, and eventually got a mortgage from another lender.

“That’s a major fail for cross-mining data,” he said. Of course, it’s also a major fail for providing a basic level of customer service.

If banks don’t make this change, they face threats from fintech firms, he added.

“I mean every participant, not just startups. Make no mistake, the number one threat for banks and insurance companies is the same – not between themselves or startups but with nonbanks. Alibaba is number one, even bigger than Amazon. Google, Facebook, and Amazon – because of their sheer size, they are the real threat, they control the data.

“The tech firms have tons of data and they interact more frequently with all kinds of users.”

The threat could be through a regulated company like an Apple Bank or a Google Bank, or on the fringes with non-regulated services.

“Payments is only part of it, but look at the tech companies’ ability to get to a user in such an ambient and non-frictional way – Amazon’s Echo, Apple’s Siri, and Google with its virtual assistant. These are very, very interesting. A natural counter-strike for banks would be to have their own virtual assistants specialized for financial services.”

Bouvier thinks banks need to provide financial wellness services for their customers, taking a dynamic view over the life of an individual.

That would require a huge leap from the data silos and siloed compensation in most financial institutions today.

In a burst of optimism, Bouvier said there is a tremendous opportunity for financial institutions to focus on financial wellness.

“They could deliver contextual advice and services around that. Sixty percent  of people can’t afford to lose their job and or have a health catastrophe. In the developed world, the majority of the population is not well financially. If you have a bank that approaches financial wellness for the life of an individual with financial education and certain services and products over a period of time, then it becomes a much richer environment. That forces the bank to think about the customer experience and a holistic view of financial services.”

But at a time when brokerage firms relegate customers with less than $100,000 to call centers rather than individual advisers, the profit potential for financial wellness programs looks limited. And does anyone really expect banks to step up into this broad range of services?

Bouvier may be more on target with his forecast of banking utilities.

As millennials come online, financial institutions have a once in a lifetime opportunity to catch them, he added.

“Some banks will be utilities, some will remain with a strong brand name, but a lot will become dumb pipes.”

Blockchain, or consensus ledger

Bouvier expects limited adoption of blockchain, which he prefers to call a consensus ledger, within the next five years, and more widespread and broader use in five to 10 years. Some delay in adoption is inevitable as the law catches up to technology.

“With publicly traded securities, you have a very specific securities legal framework that everyone agrees to. When a share of Apple is sold there is no doubt. The settlement is definitive, and even though it is dematerialized and trades on exchanges, a court of law knows this is definitive. If you put the Apple share on a consensus ledger and I sell it to you between us directly, I am not sure that the courts and the securities framework recognizes that. There will have to be a lot of massaging for the real world framework to accept the consensus ledger.”

He expects first adoption to come in financial instruments that are not publicly traded, such as syndicated loans and over the counter derivatives.

“In the case of syndicated loans, 30-40 banks own the market, so it’s much easier to implement a consensus ledger than in publicly traded securities.”

Expansion of consensus ledgers will require the development of neutral open standards, he added.

“That is a point of friction because financial services incumbents have never worked in a collaborative way with platform strategies.” However, the Linux Foundation has said it would like to broker open standards, and R3, or R3 CEV, the blockchain development company, has signed up about 40, and counting, major global banks for its work.

“The sooner we get to open standards, the sooner we will get accelerated widespread adoption in the industry.” Major financial firms are not going to cede their market power to one firm that owns the technology they rely on.

Alt lenders are at risk

The fintech boom has come after the global financial crisis and has developed in a world of very low interest rates.

“There is a generation of investors and traders that have never been through an interest or credit cycle,” said Bouvier, “and I do indeed worry about a lot of the alternate lending platforms out there.”

He suspects that some of the algorithms and underwriting frameworks might not perform so well as rates rise. What will happen to student lending platforms when rates go up?

“A student loan might not be the first you repay. First you look at your car loan, then your mortgage if you have one, and then maybe credit cards. Student loans will be a low priority.”

Gain strategic insights on gaining competitive differentiation in the digital economy. See MIT Technology Review’s report The Digital Economy: Disruption, Transformation, Opportunity.


Time For Banks To Fight Back

Laurence Leyden

Metamora, Illinois, USA --- USA, Illinois, Metamora, Close-up of man photographing checque --- Image by © Vstock LLC/Tetra Images/CorbisThe financial services industry has suffered consecutive blows in recent years. The global banking crisis, new regulations, empowered customers calling the shots, not to mention a new breed of digital disruptors out to steal market share, have wreaked havoc on business as usual.  Profits have been slashed, reputations have been damaged, and management has been blindsided.

The only way forward is change – a change of business model, a change of mindset, and a change of ecosystem.  It’s a major upheaval, and not to be taken lightly. Banks in particular have operated largely the same way for the past 300 years. Management is facing a once in a generation reassessment of 21st century banking.

Changes in customer behaviour, including 24×7 omnichannel service expectations, lack of loyalty by current customers willing to exchange privacy for easier access to information, generational expectations of future customers – “screenagers” and tech savvy Millennials – and technology advances in cloud, mobile, real-time data, and predictive analytics make yesterday’s business model redundant.

Banking isn’t actually about banking anymore. It’s about enabling people’s lifestyles. That means you have to completely re-think how you engage with customers. The lessons are everywhere in parallel industries. Nokia, for example, thought it was about the phone, not the customer experience. Digitisation has both emboldened and empowered customers. Ignoring this fact is pointless. You need to cater to what consumers want. That means your back-end systems need to be integrated, consistent, contextualised and easy to deploy across any channel.

There’s also a whole new ecosystem required to support this new business model. Banks are facing disaggregation as they no longer own the end-to-end value chain, as well as disintermediation as new market entrants attack specific parts of the business (think Apple Pay). Smart banks are forging relationships with different and unexpected partners, such as mobile and retail organisations, even providing products from outside of the group where they are the best fit for a customer’s needs.  As I’ve said in one of my previous blogs, there’s a new mantra for modern banking: “Must play well with others.”

Old-fashioned banking is gone, and with it so have old style processes, business models and attitudes. Nobody wants to be the last dinosaur.  It’s time for the industry to dust itself off, and step up. Embracing change is easier – and far more profitable – than risking irrelevance in the widening digital divide.

I’ve briefly summarised only some of the key drivers of digital transformation, but you can find much more insight – including views from thought leaders in banks, insurance companies, fintech providers, challenger banks and aggregators – by downloading the eBook from the recent SAP Financial Services Forum: The digital evolution – As technology transforms financial services who will triumph.

It’s essential reading if you’re going to successfully fight back.


Laurence Leyden

About Laurence Leyden

Laurence is general manager of Financial Services, EMEA, at SAP and is primarily involved in helping banks in their transformation agenda. Prior to SAP he worked for numerous banks in Europe and Asia including Barclays, Lloyds Banking Group and HSBC. He regularly presents on industry trends and SAP’s banking strategy.

Why Banks Should Be Bullish On Integrating Finance And Risk Data

Mike Russo

Welcome to the regulatory world of banking, where finance and risk must join forces to banking executiveensure compliance and control. Today it’s no longer sufficient to manage your bank’s performance using finance-only metrics such as net income. What you need is a risk-adjusted view of performance that identifies how much revenue you earn relative to the amount of risk you take on. That requires metrics that combine finance and risk components, such as risk-adjusted return on capital, shareholder value added, or economic value added.

While the smart money is on a unified approach to finance and risk, most banking institutions have isolated each function in a discrete technology “silo” complete with its own data set, models, applications, and reporting components. What’s more, banks continually reuse and replicate their finance and risk-related data – resulting in the creation of additional data stores filled with redundant data that grows exponentially over time. Integrating all this data on a single platform that supports both finance and risk scenarios can provide the data integrity and insight needed to meet regulations. Such an initiative may involve some heavy lifting, but the advantages extend far beyond compliance.

Cashing in on bottom-line benefits

Consider the potential cost savings of taking a more holistic approach to data management. In our work with large global banks, we estimate that data management – including validation, reconciliation, and copying data from one data mart to another – accounts for 50% to 70% of total IT costs. Now factor in the benefits of reining in redundancy. One bank we’re currently working with is storing the same finance and risk-related data 20 times. This represents a huge opportunity to save costs by eliminating data redundancy and all the associated processes that unfold once you start replicating data across multiple sources.

With the convergence of finance and risk, we’re seeing more banks reviewing their data architecture, thinking about new models, and considering how to handle data in a smarter way. Thanks to modern methodologies, building a unified platform that aligns finance and risk no longer requires a rip-and-replace process that can disrupt operations. As with any enterprise initiative, it’s best to take a phased approach.

Best practices in creating a unified data platform

Start by identifying a chief data officer (CDO) who has strategic responsibility for the unified platform, including data governance, quality, architecture, and analytics. The CDO oversees the initiative, represents all constituencies, and ensures that the new data architecture serves the interests of all stakeholders.

Next, define a unified set of terms that satisfies both your finance and risk constituencies while addressing regulatory requirements. This creates a common language across the enterprise so all stakeholders clearly understand what the data means. Make sure all stakeholders have an opportunity to weigh in and explain their perspective of the data early on because certain terms can mean different things to finance and risk folks.

In designing your platform, take advantage of new technologies that make previous IT models predicated on compute-intensive risk modeling a thing of the past. For example, in-memory computing now enables you to integrate all information and analytic processes in memory, so you can perform calculations on-the-fly and deliver results in real time. Advanced event stream processing lets you run analytics against transaction data as it’s posting, so you can analyze and act on events as they happen.

Such technologies bring integration, speed, flexibility, and access to finance and risk data. They eliminate the need to move data to data marts and reconcile data to meet user requirements. Now a single finance and risk data warehouse can be flexible and comprehensive enough to serve many masters.

Join our webinar with on 7 October, 2015 to learn best practices and benefits of deploying an integrated finance and risk platform.


About Mike Russo

Mike Russo, Senior Industry Principal – Financial Services Mike has 30 years experience in the Financial Services/ Financial Software industries. His experience includes stints as Senior Auditor for the Irving Trust Co., NY; Manager of the International Department at Barclays Bank of New York; and 14 years as CFO for Nordea Bank’s, New York City branch –a full service retail/commercial bank. Mike also served on Nordea’s Credit, IT, and Risk Committees. Mike’s financial software experience includes roles as a Senior Banking Consultant with Sanchez Computer Associates and Manager of Global Business Solutions (focused on sale of financial/risk management solutions) with Thomson Financial. Prior to joining SAP, Mike was a regulator with the Federal Reserve Bank in Charlotte, where he was responsible for the supervision of large commercial banking organizations in the Southeast with a focus on market/credit/operational risk management. Joined SAP 8years ago.

Robots: Job Destroyers or Human Partners? [INFOGRAPHIC]

Christopher Koch

Robots: Job Destroyers or Human Partners? [INFOGRAPHIC]

To learn more about how humans and robots will co-evolve, read the in-depth report Bring Your Robot to Work.

Download the PDF (91KB)


About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing. Share your thoughts with Chris on Twitter @Ckochster.


Top 5 Content Marketing Trends Of 2016 So Far

Michael Brenner

Can you believe we’re more than halfway through 2016 already? It feels like just yesterday when we were making our 2016 content marketing predictions last year.

In 2015, 88% of marketers said content marketing was core to their overall marketing strategy. Their top five priorities included creating more engaging content, developing a better understanding of their audience and what content is effective (and isn’t) for them, finding more and better ways to repurpose content, creating visual content, and becoming better storytellers.

According to Content Marketing Institute and MarketingProfs, 76% of marketers surveyed said they had planned to produce more content in 2016 in order to drive more brand awareness, engagement, lead generation, lead nurturing, and sales – the top five content marketing goals marketers said were most important to their organizations.

So what are marketers doing in 2016 to achieve these goals? This Business 2 Community post looks at five of the top content marketing trends we have seen so far this year:

1. Content personalization

With so many marketers and brands around the world creating new content every day, it’s not enough to just create good content anymore. Just like the rest of us, today’s consumers are pressed for time, and so when they want to read content they will only want to see what is valuable and relevant to them.

To do so, many brands have started creating more personalized content tailored to their target audience’s needs and interests. Personalized content that helps solve a customer’s biggest pain point or answer a tough question they have is key to standing out from the flood of content that is out there today, to win your target audience’s attention, increase reach and engagement, and ultimately convert them into sales.

Here is an example of effective content personalization. According to the Business 2 Community blog, the e-commerce company Clymb was able to increase its sales by 12% by personalizing the products shown on the home screen when users visit the site.


To get started, here are some helpful tips you’ll want to know to develop a successful content personalization strategy.

2. Visual content

Today’s audience needs more than plain text to engage them. They want valuable content that not only educates and informs but also entertains them.

That’s where visual content can help. According to this HubSpot article, research has found that visuals help increase people’s willingness to read a piece of content by a whopping 80%! What’s more, people remember visuals six times more than plain text. An average reader also remembers 60% more of what they see compared to what they read.

It’s no wonder then that nearly two-thirds of marketers believe visual content is core to how they communicate their brand story, and that it is a top priority for marketers, as the Content Marketing Institute and MarketingProfs study has shown.

With YouTube becoming the second-largest search engine and third most-visited site on the web, and the rising popularity of visual-focused platforms like Instagram and Snapchat, brands need to incorporate visual marketing into their content strategy if they haven’t already.

Here are 15+ best practices and tools to help you create effective visual content your target audience will love.

Visual Content Marketing: Starbucks
Visual Content Marketing: Oreo


3. Interactive content

With so much content and so little time, coupled with shorter attention spans, it’s becoming harder and harder to reach and engage today’s consumers. This is why some brands are turning to interactive content to make a lasting impression on their target audience and to drive more engagement.

Interactive content, at its core, drives two-way conversations and allows the audience to actively participate in content rather than passively consuming it, as with static content. Content types like quizzes, tests, calculators, polls, and surveys allow consumers to gain tailored results or insights on topics they care about, or on challenges or problems they are facing, while also having fun in the process of interacting with the content.

Tourism Australia’s official website, for example, uses a variety of compelling interactive content to better engage potential tourists and convert. Its series of 360-degree virtual reality video tours, which can be watched with a VR headset, allows individuals to truly immerse themselves and virtually experience various stunning adventure spots in Australia, from swimming with whale sharks to climbing up the country’s highest building, SkyPoint Climb, for a breathtaking view of the Gold Coast.

Tourism Australia


4. Influencer marketing

One of the ways to cut through the content clutter and differentiate your brand today is through influencers. Influencers are individuals in your industry who have an engaged following on social (an audience that you want to target), and can help promote and amplify your content.

According to a McKinsey study, campaigns that used influencer marketing generated more than double the sales of paid ads and had 35% higher customer retention rate.

Here are 4 helpful tips to get you started with developing and driving a successful influencer marketing campaign.

5. Mobile-first content marketing

Smartphone and tablet usage accounted for 60% of all digital media time spent, according to a comScore report last year. It also reported that smartphone and tablet usage are up by a whopping 394% and 1721%, respectively!

With mobile quickly becoming the go-to device for everyday digital media consumption and services, many brands have started exploring new tactics and technologies, such a mobile apps, to create and deliver content that is mobile-first.

IKEA, for example, created a catalogue mobile app that offers customers exclusive features they are not able to get with a printed catalog. The mobile catalog gives customers access to enhanced content, such as additional product information and videos. Another useful (and fun) feature of the app allows customers to virtually place IKEA products using the camera of their mobile phone, so they can get a preview of what an item would look like in their home.

I hope these content marketing trends will inspire you with new ideas to help your brand stand out from the crowd. If you have any other content marketing ideas or strategies that you think your marketing peers should know about, please share them below!

Are you interested in engaging and converting new customers for your business? Contact me here and let’s talk about how we can help. Or follow me on LinkedInTwitter, or Facebook. and if you like what you see, subscribe here for regular updates.

The post Top 5 Content Marketing Trends Of 2016 So Far appeared first on Marketing Insider Group.

Photo Source: flickr


About Michael Brenner

Michael Brenner is the CEO of Marketing Insider Group, former Head of Strategy at NewsCred, and the former VP of Global Content Marketing here at SAP. Michael is also the co-author of the book The Content Formula, a contributor to leading publications like The Economist, Inc Magazine, The Guardian, and Forbes and a frequent speaker at industry events covering topics such as marketing strategy, social business, content marketing, digital marketing, social media and personal branding.  Follow Michael on Twitter (@BrennerMichael)LinkedInFacebook and Google+ and Subscribe to the Marketing Insider.