Yesterday, I read a report that Gen X are ahead of Gen Y, as it relates to their engagement with #Digital #Retail Asset Management. #Fintech and banks jumped ahead from the supply side, each with their individual nuances.
Most are not surprised. It is the slice of the Gen Digital pie after all. A counter school of thought which I subscribe to is: Gen X jumped on the ETF style #robo-advising, in some cases human-‘aided’. OK, super. All the hype has been about Gen Y, the millennial as the demographic and its audience. So, why has this not transpired as projected, a conundrum indeed.
The supply side has been nitpicked, sliced, diced and almost sautéed to a burn with no minimums, rock bottom asset management fees, with an attempt to capture the market share strategy.
This supply side audience is apparently the shale rock, and it has yet to deliver some more oil from the untapped pockets.
On the demand side, the pundits have yet to sit with the behavioral psychologists or the Customer experience guys. Most all are casting the bets on User Experience. I wonder what more can the pundits deliver.
The demand side yet, dares to inquire – Are the #millennials being served with the couture retail asset management fusion flavor which catches and captures their style, their fancy, their persona, their social diet.
The highlighted left side of the image (CC McKinsey) above is seemingly a blank slate.
The opportunity exists. As long as the unmet needs, mostly unidentified and undelivered, are set to a higher bar first, well thought of, well understood and applied, this time with a realistic #personas, experiences alone shall not deliver the forecasts.
How well is the C-Suite, the business strategists, the futurists and the forecasters prepared, for where we are, and may witness well into the future. The future is not the next shiny object, but still remains the Long Term Value (LTV) of the customer, we all desire.
Are we narrowing the Net Promoter Score (NPS) gap? Are we addressing the unmet, and yet unidentified needs of the customer?
digitalbrine.com | @ernestpaul | CC-by SA
With advances in AI, predictive analytics, distilled big data, customer analytics, web and social analytics, the CMO’s role has evolved and at times been misunderstood. Their outstanding achievements in this new digital, customer- centric, data driven, and ROI centric times has not been easy.
Not taking any sides – traditionally, the CMO has been the center point between the external agency of record and the business. To realize $$ for the intangible Don Draper- ish magic of TV, Print, Billboard advertising, with a splash of behavioral psychology thrown in ‘was/Is’ yet not really convincing to rest of the C-Suite.
Pepper in demographic shifts, the new customer experience desired by customers, the emerging touchpoints, the 8 second attention span (a goldfish has a 9 sec attention span) and hypnosis into the equation, it gets even tougher to determine’ Where is Waldo’, the holy grail in dollars, the infamous ROI.
Hard to attribute ROI in ‘dollars’ which the CFO does not frown upon, CMO/CFO relationship has seemingly been like ‘Apples and Plums’. ‘Apples and Oranges’ would simply be absolution.
The CMO accountable for building, maintaining the brand equity, marketing the organizational revenue generating segments, staying ahead of the curve with Customer experience, while balancing the introduction of new devices, channels, and the application of emerging marketing technology, it is a big plate……and extra laps around the track.
It is a persuasive argument for the C-Suite to consider ‘Marketing’ as a ‘revenue generating center’, not as a ‘cost center’, a burden.
Alignment and the prevailing climate between the CMO, and the CFO has to give way to solutions:
– Hammer out a sound unquestionable ROI attribution strategy, for intangibles and tangibles.
– A ROI attribution which audits the existing determinants and adopts CFO inspired tweaks. Having ‘Skin in the game’ makes the entire game plausible.
– A quarterly ROI health check which tracks monthly variances, with historic and cyclical attributes factored in.
– This proposed health check would lead to a robust Marketing plan for the next budget planning year.
– Finally, a forecast, where ROI and spend could be traced back to the budget
These efforts do require time and effort. From my cost accounting days, I know how crucial and illuminating this exercise can be.
From a business road mapping perspective, it brings agility and a shortened roadmap from the traditional 5 year plan.
The recent news of the federal financial regulator granting ‘Fintech’ companies banking charters has made headlines. The topic remains fluid with speculative outcomes. A new regulation requires agencies to solicit for public comment and decision making is based on evidence. Needless to say, it is a lengthy process.
My optimism lies in the wake which ‘Fintech’ brings with it. It has morphed and matured and into a broad landscape and a massive ecosystem of its own.
‘Innovation from within’ in US regulated industries remains in rapid fire from networking & partnering to investing, inventing, incubating, acquiring, and building MVP’s.
‘Fintech’ companies are seeking independence, due to an oversupply in the US, while demand remains limited, due to regulation limitations on banking charters.
The graphic below sheds a global outlook:
a. Asia-Pacific (‘Fintech’ presents the most opportunity, less of a threat)
b. The United States (‘Fintech’ presents more of a threat, less of an opportunity)
Fintech bank charters related risks are a reality and a cautionary step by step approach by Federal & State regulators is real as well. Tolerance of risk and reward is just one of the factors shaping the future.
Choking the competition, never to see the light of day, has not worked, either.
The US shares a lot of firsts, one of them hybrid and electric cars and is recognized as an early contributory pioneer. However, it was an Asia Pacific country who mass produced it, in 1997.
In a global and shared economy, a containment outcome runs the risk of mass migration of US ‘Fintech’ startups to emerging economies, and/or the Asia-Pacific regions, where regulations are ‘Fintech’ friendly and State funding is readily available.
The Fintech innovation success stories from regulation friendly parts of Europe, and a few APAC countries have not gone unnoticed by the UK’s old guard.
The loosening of some UK financial regulation, has seen successful outcomes. This has possibly tipped the balance in the US.
A top regulator, ‘Thomas Curry’ from the Office of the Comptroller of the Currency revealed -Fintech firms shall be treated as ‘special purpose national banks’.
The agency would for the first time start granting banking licenses to “Fintech” firms, giving them greater freedom to operate across the country without seeking state-by-state permission or joining brick-and-mortar banks to function.
This regulatory response is open to public comment through Jan. 15 and is expected to create tremors in the banking industry, followed by deliberations inside the OCC. Will this first U.S. federal regulator to allow non-bank Fintech firms to fly on its gradual own, who for now relies on a symbiosis with larger brick & mortar banks, including the state-by-state permissions and other capital requirements, and more.
This may be the first, of many more volleys of regulation challenges, bureaucratic debates, and stakeholder jousting. The eventual political opinion/actions shall determine, if US banking and Fintech firms are to be equals.
This move by regulators, since Dodd-Frank have been working hard at seeking an equilibrium between innovation, consumer choices, unmet consumer choices, while extending traditional protections to new and booming financial products which began to emerge, post 2008 Financial crisis.
The proposed move was cheered by the tech sector who had long been seeking independence, but frowned upon by financial institutions, some consumer groups and state regulators who see threats in reversing the traditional order.
A legislative/executive action may possibly determine, if US banking and Fintech firms are to be equals.