GfK - Lessons Learned…From FinTech’s Impact Across Financial Services
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Transcript of GfK - Lessons Learned…From FinTech’s Impact Across Financial Services
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Lessons Learned……From FinTech’s Impact
Across Financial Services
© GfK | Innovation In Insurance | October 12, 2016
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Tom NeriHead of
Financial Services
GfK North America
…service providers
must reimagine the
entire customer
engagement to occur
on a smartphone.
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
A
Convergenceof
Phenomena
Capital
Smart-phones
Millennials &Underserved
Big Data/Algorithms
Technology
Regulations
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 3
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
The challenge
Common struggle to reimagine
personal financial management for
mobile and determine whether
consumers want to do anything
that complicated on their
small screens
Traditional players
are turning to FinTech
companies to help
solve their issues.
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 4
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
FinTech
Nearly
1,400 firmswith $33 billion in
capital, working across
16 financial services
categories
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 5
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financially underserved
The Underserved:a geographically, economically and demographically diverse group of people who, by choice or circumstance, operate partially or completely outside the traditional banking system.
The Unbanked:
have no checking or savings account
The Underbanked:have a bank account but also used at least one non-bank financial service during the past year
Theunderserved
consists primarily of two main groups:
25%
68%
7%
Check cashing
Moneyorders
Payday loansvcs.
Pawn shops
Wage paymts.
Prepaid cards
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Dave Melnick
Smartphone for Everything Everywhere
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 7
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
C2. Which of the following best describes your mobile phone( the one you use the most)?
68% 71% 72% 69% 69%
88%
Smart-
phone
ownership
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
State of US Retail
E-Commerce Growth Fueled by Mobile
• Forrester Research projects mobile commerce sales to generate a 17% CAGR through 2020, accounting for half of all online sales.
• According to GfK’s Future of Retail reporting, 75% of Americans say their mobile device is becoming their most important shopping tool.
U.S. E-Commerce Sales
Source: GfK FutureBuy
Advantage Online
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
State of Consumer Engagement
Industry Outlook
EXPERIENCE MARKETING
BIG DATA
EMOTIONAL ENGAGEMENT
OMNI-CHANNEL INTEGRATION
OMNI-CHANNEL COMPONENT DEVELOPMENT
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 10
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
A Tale of Innovation in the Age of Millennials
Emergence of Gen Z, Establishment of Gen Y
* Age in 2014
Source: GfK Consumer Trends, 2013
GEN Z18-24*
GEN Y25-34*
Social natives
Book smart & savvy
Fun & frugal
Fun first, work next
Connected Confidence
Global minder
“Both / and” stress
Friends = family
Close todoting parents
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 11
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
2229 33
39 434554
63 6067
2937
43
54 58
1221 25
32 34
510 9 13 18
0
10
20
30
40
50
60
70
80
90
100
2011 2012 2013 2014 2015
Total 18-29 30-44 45-59 60+% of Respondents
Mobile banking
usage continues to climb…
Base: n=1000
Source: Consumers and Mobile Financial Services 2016 – The Fed
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Upward trend in smartphone shopping among Gen Z
13% 14%8%
3%21%
25%
15%7%
32%25%
18%
7%
7% 10%5%
2%9% 10% 11% 10%12% 11% 9%12%
Share of All Online Shopping Activity on
Smartphone (US)
Share of All Online Shopping Activity on
Tablet (US)
2013 2014 2015
18-24 25-34 35-54 55+
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Generational Divide Evident
In Perceptions of Mobile Payment Utility
Source: GfK FutureBuy®
Mobile payments are:
39% 44% 24% 22%
44% 46% 30% 26%
40% 46% 25% 18%
33% 34%18% 14%
“Easier”
“Faster”
“More Efficient”
“How I Pay When-ever Possible”
% US Shoppers Agreeing(completely / somewhat)
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Millennials & Their Boomer Parents
Influence Each Other
My mom helped me
open my first checking
account when I was 13.
I’ve always had a great
relationship with my bank.
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 15
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Lesson 1 for Insurance industry …
Ways to engage consumers
EducationAccessible Experiences
PersonalizationFinancialFitness
Trust & Authenticity
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
Broader Industry Perspective
What’s
working???
Retail
banking
app
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2016 – Thinking of the last time you used your Smart Phone to Shop- Was it in-store or Online?
Smart Phone
for In-Store Shopping
Europe
APAC
LATAM
Middle East
28%
24%
23%
22%
Percentage of IN-STORE use of MOBILE
PHONE to SHOP GLOBALLY is 26%
US –
37% used their
Smart Phone In-
Store the Last
time they
Shopped
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2015, 25 markets
The global MOBILE PAYMENTS
MARKET is COMPLEX
Europe
APAC
LATAM
Middle East
9%
3%
6%
7%
Percentage of PAYMENTS conducted
by mobile phones in-storeUS market: 3% estimated
share of all PAYMENT TRANSACTIONS in 2015
Other
Credit
Card
Cash
Mobile
Device
Debit
Card
3%
38%
29%
4%
27%
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovation Solutions
Payments
Contactless, smartphone wallet based on QSR code
• A “pro-retailer” solution
• Merchants have the advantage of a network that includes no network/processing fees & no merchant fraud liability
• But they’re also getting shoppers’ data – something that today’s more privacy-minded consumers are fighting back against, but often are willing to make tradeoff for benefits
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Beacon-triggered mobile games
create two-way interactions in-store
Via the Macy’s mobile app and beacon-technology, customers shopping at more than 700 Macy’s locations nationwide who have signed up to participate in the game will have the chance to instantly win $1 million in Macy’s gift codes and prizes, just by walking in to their local store
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Saving
Pioneered a smart phone banking app that helps users track their money and improve their
savings by tracking spending and telling customers how much they can safely spend without running
out of money at the end of the month.
Moven is expanding internationally with bank alliances and a partnership with Accenture.
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Payment Transfers
Unipagos is helping the unbanked Spanish-speaking population on both sides of the US-Mexican border
make payments on their smartphones.
About 75 percent of Mexico's 100 million consumers don't have bank accounts, but 50 percent of the
country's residents wield smartphones
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Lending
Vyze develops software for retailers to
process consumer credit at the point of sale
• Proprietary algorithm using existing credit & proxy data, such as cell phone usage, utility payments, rental history
• Software provides retailer speedy match with willing lending institution for nearly instant credit/loan approval
• Particular benefits underserved consumers, meeting regulatory requirements for not using punitive interest rates
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Robo-advisors
Claims to have more customers than all of the competition combined, thanks in part to its $0 account minimum
• Powerful combination of goal-based tools & affordable management fees, particularly for accounts over $100,000, which pay just 0.15% of assets managed.
• Like other robo-advisors, Betterment uses exchange-traded funds (ETFs), and clients pay no commissions or transaction fees.
Other well known players: Wealthfront, Motif & Folio etc.
Betterment has emerged among plenty of competition as the current leader of independent launches, with more than $3.9 billion in assets under management.
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Complete Insurance Coverage
To get people the insurance coverage
they need and make them feel good about it.
The easiest way to get an individual from
point A (no insurance) to point B (insured).
policygenius gained insights into the kind
of experience people would want
and built it from there.
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Term Life Insurance
A mobile value proposition built around easier & faster access to term life insurance, using available, permissible data sources to improve the underwriting process.
Building a value proposition that redefines the traditionalnotion of an insurance ladder – a construct that lets you plan for extra coverage when you’ll need it the most and taper off coverage at other times –developing more dynamic, effective relationships with clients.
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Emerging FinTech Applications
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Smart
Home
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services© GfK 2016 | The Connected Consumer
Rethinking our
relationship to
the home…
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
High level of familiarity
of the term “smart home” Consumers
Leading
Edge
Consumers
Mobile Payments
Smart home technology
3D Printing
Wearable Technology
Driverless cars/Autonomous driving
The Internet of Things
Connected Car
Virtual/Augmented Reality
Smart Cities
55%
50%
41%
35%
33%
29%
26%
24%
24%
74%
78%
62%
63%
51%
50%
52%
46%
48%
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
P01. Thinking about the various categories of services that can be part of a ‘smart home’, what type of company would you most expect to offer each service?
Base: All markets=7149
Types of company most expected to deliver smart home services
Electronics Manufacturer
Multinational Tech Company
High Street Retailer/ In street (US)
Utility Company
Online Retailer
Telecoms Provider
Mobile Phone Network
Financial Service Company
Other
Would not trust any company
19%
12%
12%
10%10%
8%
8%
5%
5%
12%
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Connected
Car
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Not a car but a travel solution. This
app will take complete responsibility
for a trip, identifying the best
transport solution
7. Home to destination
Travel Solution
A car that knows your entertainment preferences
1. Entertainment
A self-driving car that drives
completely autonomously
2. Autonomous Driving
A car that communicates
with other connected
devices in your home
5. Life Manager4. Ultra Safe
A car that makes driving as
safe as possible. Connectivity
with other cars, cruise control,
integrated cameras
3. Data TrackerA car that tracks usage , runs
diagnostics, checks repair
costs; records accident data
automatically6. Self SufficientA strong but light
electric car
‘Connected
Car’
Concepts
We asked 5,800 consumers to evaluate 7 concepts
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
General
Consumers
LEC
87%
96%
66%
81%
73%
84%
68%
90%
62%
84%
65%
84%
79%
91%
UltraSafe
DataTracker Entertainment
Life Manager
Home to Destination
SelfSufficient
Autonomous Driving
QT1. Concept appeal Scale: 5 Point. Data is Top 3 Box
Leading Edge Consumers
leaning into connected cars…
As expected Ultra Safe concept is the most appealing. As safety is a ‘hygiene’ factor, we want to focus on concepts that follow next.
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2015
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2015
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© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Focus organization
to deliver consistent
cross-channel experience
Embrace
collaboration/
partnerships
Engage
consumers
on their needs,
terms &
benefits
Three Key Components…
to Implementing Innovation
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