HOW FINTECH IS SHAPING THE FUTURE OF WEALTH MANAGEMENT

DANIEL LEE | March 23, 2020

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The wealth management industry can no longer ignore the rise of fintech. Investors have pumped more than $100 billion into the fintech market since 2010—including $6 billion in the first quarter of 2019. Those investments are going toward things like robo-advisors and investment apps that help Millennials streamline their personal investments.I first noticed the fintech trend about a decade ago. Now, I can see that fintech is shaping the future of wealth management.

Spotlight

American Chartered Bank is now MB Financial

MB Financial Bank N.A. is a Chicago-based commercial bank with approximately $19 billion in assets and a more than one hundred year history of building deep and lasting relationships with middle-market companies and individuals.

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BEHAVIOURAL ANALYTICS WILL FUEL CUSTOMER INTERACTION IN FINANCIAL SERVICES

Article | June 1, 2021

The axing of third-party cookies by Google and the other major browser companies will require a major readjustment by financial services organisations. The decision, coming fully into force next year, will effectively choke off the data that has enabled personalisation, optimised website interactions and driven much internet advertising. It is no comfort that the browser companies have acted because of fears about infringement of privacy and data protection legislation such as the EU’s GDPR (General Data Protection Regulation) and the CCPA (California Consumer Privacy Act) in California. The move will affect how UK financial services organisations interact with millions of people. More than three-quarters of Britons now use online banking and 14 million use digital-only banks, expecting a slick, light-touch interaction. So it appears that just as many people go digital, financial services organisations will no longer have access to information they need for personalisation, being unable to track where customers go on the internet after they have visited a bank’s website. All that data about individuals’ habits and preferences will be unavailable. It seems catastrophic, but in reality, it is not. Financial organisations have a new opportunity to radically improve how they interact with web visitors and customers. AI-powered behavioural analytics offer far superior, real-time capabilities, using the data from the first-party cookies on their own website domains and where available, data from customers’ transaction histories. The result is a solution that is faster, more accurate and responsive than conventional technology relying on cookie data owned and stored by third-party organisations. Instead of relying on such data for relatively rigid profiling and personalisation, behavioural analytics enables real-time interactions based on a more dynamic picture of how an individual’s requirements are changing. The technology analyses all the browsing characteristics including time on site, speed of movement and page views, as well as more obvious features such as interest in specific products. Historical data added to the analysis includes what customers did on previous visits and the interval between those visits, establishing patterns where possible. The flexible advantages of behavioural analytics hubs in financial services Segmentation allows a bank to identify customers as soon as they arrive on its site, according to whether they are a new or existing customer. Their behaviour then indicates what they want. Knowing what customers are interested in is important. Customers visit financial services websites for a host of reasons – from seeking information, to opening accounts, exploring loans and mortgage offers, making or setting up new payments. They may also want advice about investments and savings, pensions or small business finance. Almost all of these requirements involve quite complex mental processes which financial organisations can influence while consumers are on their sites. Collecting the data is not difficult – the skill is in making it actionable in an effective way, replicating the ability of a perceptive employee to read a customer’s state of mind. Banks can do this by setting up a behavioural analytics hub to understand what a customer’s behaviour means and how it can be optimised. Using customised parameters, the hub will, for instance, trigger a screen notification that prompts the web visitor to fill in a form requesting an appointment. In the case of existing customers, the technology can correlate health insurance offers with spending on fitness, and, in general, savings and investment recommendations can be tailored to the client’s concerns or goals as revealed by their navigation of a bank’s website or mobile app. Banks can set up analytics to see when consumers are behaving in a way that indicates they about to leave the website, allowing them to intervene with a notification that could include an offer. This provides a positive outcome and avoids the blanket use of offers that undermines profitability. It is a more sophisticated and personalised approach that avoids annoying pop-ups or recommendations that fail to match individual preferences. As part of a single AI-powered segmentation platform, the technology enables banks to personalise marketing content in SMS messages and emails sent to consumers (who consent), which deliver far better results through precise targeting. Solutions for last-mile interaction in the open banking era The single platform approach also has another major advantage. It is much easier to implement and far more efficient and streamlined compared with separate solutions for different parts of the customer journey. The benefits of using AI-powered segmentation solutions should be part of the financial sector’s broader strategy to transform its systems for the open banking era as we approach the end of third-party cookies. For established banks, the reality for some time has been that complexity of systems has undermined their ability to deliver a high-quality last mile. This they can now address without huge disruption or investment. The alternative is for financial services organisations to become lost on an ocean of data, losing track of customers. Behavioural analytics will bring banks new insights into customers that surpass third-party cookie data, being actionable and accurate and in real time. To provide a streamlined and profitable experience for themselves and their millions of customers, banks must now employ the latest advances in AI-powered behavioural analytics.

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TIME TO DRIVE API INNOVATION THROUGH OPEN BANKING

Article | March 31, 2020

As the paper points out, application programming interfaces (APIs) are starting to significantly disrupt corporate banking. Nearly nine in ten (86 percent) banks are working on Open Banking and open API platforms, and nearly half (47 percent) of corporate treasurers see opportunities for banks to improve their product offerings to provide innovative solutions that go beyond traditional services.

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Warning: PayPal will kill cash within 5 years

Article | September 6, 2021

You heard that right. It’s not “if” PayPal will replace cash — but “when”. But, where’s this coming from? Well, we already know 73% spend money via apps. So, it was time to speak with 200 PayPal and Venmo consumers to understand their shift to mobile app payments. After watching them leave these apps, we sent a survey. And, I can tell you…they think cash is a thing of the past. Here are 3 reasons why. Reason #1: It’s familiar. Branding is the foundation of familiarity. And PayPal is comin’ in hot — even if 6% of this group isn’t familiar with PayPal. Now, that’s interesting, huh? It may be that Venmo users aren’t aware PayPal owns them. Either way, it’s not stopping PayPal. Think about Bandaid and Kleenex for a sec. When was the last time you asked for a bandage or tissue? Exactly. Their brands are so strong, they’re actually nouns now. If PayPal can reach that level…cash has no chance. They’ve already got a following…Right now, 66% of the people we spoke to prefer their mobile app payment to cash or credit card. This isn’t a phase either, 8 in 10 people have used a mobile payment app for at least two years. So, it’s not a trend. Electronic payment apps are very top of mind for these users. In fact, 43% use a mobile payment app weekly. They’re in such high demand, 34% say it’s very important to have multiple payment apps – an option for every scenario. Payment at the push of a button. Speed at its finest. Reason #2: It’s instant. This isn’t business, it’s personal. You love instant gratification, so do I. And everyone loves speed when it comes to money. So, with 94% of the people we spoke to on PayPal for personal use, instant access comes in handy — 49% are here to pay back friends. Here’s what else they’re doing… Why are there so many use cases? Well, it’s simple. Yes, 72% use PayPal because it’s easy. Think of it this way. You spy a beautiful red sweater online, a must-have. You’re going to buy it. But first, you have to make a choice. You can walk to your purse… and fumble through gum, cough drops, and kid toys until you find a credit card… Or, you can just log into PayPal. It’s easier. Maybe that’s why 43% of PayPal users hand over the app at grocery stores, and 42% use it at restaurants and retailers. With more places adding app payments each day, it’s easy to see why the group we surveyed loves it. Already, 52% use it in lieu of cash or credit. Imagine what will happen when all merchants accept it… We’ll see the death of cash and credit. Here’s why. Reason #3: It’s secure. That matters. 73% of PayPal users say it’s their go-to payment app. They’re relying on the safety of the app and that’s important. Why? Well, because 15% choose to use a mobile app payment for its security. If you’ve ever lost a lot of cash or had your credit card stolen, you know how valuable that is. Peace of mind. Not only are mobile payment apps familiar, easy and instant — 37% use them because they’re secure. At this point, you may wonder, “if everything is so positive, why hasn’t PayPal already replaced cash?” Timing. Those we talked to, who don’t use PayPal — or other app payment options — as often, can’t because it’s not as widespread. Yet. Give it time and you’ll soon see buyers getting rid of credit cards and killing cash. It’s a matter of time. Now what? This is what your buyers want. 61% of PayPal and Venmo users believe mobile payment apps will soon replace cash/credit cards. Now is the time to prepare, as cash may not last another 5 years.1 Do the work now, so you’re ahead of the game. This is market research. You can actually survey the same group of people we spoke to here. Or, grab a whole new group of consumers to dive in deeper, based on the app behaviors you need to understand. Stay on top. Use consumer behavior to stay a step ahead of your competition.

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Taking Advantage of AI and ML in Financial Services

Article | April 1, 2020

Many financial services organizations have already begun to take advantage of ML technology because of its proven ability to reduce operational costs, increase revenues, improve productivity, enhance compliance, bolster security, and enrich the customer experience. However, most companies are in the early stages of exploiting the benefits of ML.

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Spotlight

American Chartered Bank is now MB Financial

MB Financial Bank N.A. is a Chicago-based commercial bank with approximately $19 billion in assets and a more than one hundred year history of building deep and lasting relationships with middle-market companies and individuals.

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