The CEMC New York Forum focused on the New Age of Customer Experience in Fintech, featuring visionary speakers who shared cases of digital transformation.
We are living in the Age of the Customer, and technology is transforming the way lenders serve those customers. This year’s CEMC New York Forum focused on this fact and featured visionaries who shared cases of digital disruption. Held at “The Home of Fintech,” Rise New York, a Barclays project designed to create ideal conditions for innovation and growth in financial services, the Forum also highlighted several fintechs that put innovation into practice.
Currency CEO and CEMC Founder Charles Anderson kicked the Forum off with a recap of important takeaways from the council’s June event, including: “Humility is the most valuable trait in a successful life” and “The most successful people allow themselves to play in the most pie slices.” As the world moves toward tech, Anderson stressed the importance of interconnectivity to move e-commerce forward.
Focus on Customer Happiness
In a fireside chat, John Stein, CEO of Betterment explained how his desire to help people make better decisions led him to launch the smart digital money manager. While working in the financial industry, Stein learned that the solutions to today’s industry problems, such as a lack of customer-centric products, were never going to come from within the industry. So, he decided to launch a new solution.
Stein said customers want three things: performance, convenience and peace of mind. While many companies claim to take a customer-centric approach, their plans to attract customers to make purchases don’t cut it. To truly focus on customer experience, Stein said, financial institutions must focus on customer happiness. Financial institutions must ask, how will the customer be better off because of our products?
But what truly creates happiness? Stein said that studies have shown that having a purpose or a passion is important. Citing Behave: The Biology of Humans at Our Best and Worst, Stein said that the human body provides dopamine, not when we get the reward, but as we work toward goals. So, as Betterment users work toward their financial goals, they also boost their happiness.
Leading with Data for Customer Centricity
Keynote speaker Paul Zikopoulos, VP of Big Data Cognitive Systems at IBM, took attendees on a journey through data, noting that beginning a 1% journey to AI can lead to customer centricity. He urged attendees to find ways to improve their organizations by 1% every day to achieve meaningful and measurable results. He pointed out that from a technology perspective, things are changing so fast, our skills years are like dog years. This presents both an opportunity and a threat.
To reach customers, you must know how they interact. Zikopoulos mentioned that younger people, like his 13-year-old daughter, are driving the migration from a text-expressive environment to a visually expressive environment. This shift is delivering visually enhanced data, which will impact our understanding of anything from preferences, to wealth, to health. He noted that our digital body language has changed as well. Instead of clicking and scrolling, we now pinch and touch.
In five years, Zikopoulos predicted that AI will be “ambient intelligence.” Like the lights on the ceiling, which perform their job without being noticed, AI will be part of everything we do. He said digital-everything millennials and Generation Z are driving these changes and will direct about 55% of disposable income spent in North America by 2025. Citing a study by USA Today, Zikopoulos said mobile phones are incredibly important to millennials — on par with deodorant — so they expect a digital experience.
Zikopoulos pointed out that technology disruption is happening in every industry. He encouraged attendees to look at the issues they were trying to solve and ask two questions: 1) Are we looking at the right problem? and 2) Can we look at this problem differently? He said these questions are especially vital in a saturated marketplace.
Netflix, Uber and Apple Music were among past disruptors, Zikopoulos said, adding that they all “crushed it” because they went data first. Today, many millennials will look at Apple as a financial provider before looking at a bank. He predicted that ethics and reputation will be the company bragging rights of the future. Data can deliver a competitive advantage to businesses, but he pointed out that data is just like your gym membership — if you don’t use it and build your acumen, you’ll get nothing out of it.
We are at an inflection point. Today, processes are run by humans and technology supports them, but this will soon reverse as humans support technology. Zikopoulos said this is a “lift, shift, rift or cliff” opportunity. “AI can’t sit in corner offices,” he said. “It has to be democratized for the many” to achieve results.
Zikopoulos noted that when businesses lead with data, they start to create new markets, steal revenue from competitors or invent new lines of revenue. He told the story of Rogers, a telecom provider in Canada. To find higher margins, the company expanded from Wi-Fi to geofencing, which benefited parents with teenage drivers. From there, Rodgers started looking at predictive auto maintenance. Today, this telecom provider knows when a car needs maintenance before an auto mechanic or dealer because it is pulling that data. “They have no business being in there, but AI allows you to be in places where you don’t belong,” Zikopoulos said.
Loyalty programs, designed to help restaurants and retailers innately understand the customer in a hyper-personalized way, are a great example of data in action. Zikopoulos said Starbucks, which offers experiential rewards, has one of the best loyalty programs, with its members delivering 41% of the coffee retailer’s sales.
Zikopoulos said we are in a perpetual state of documentation, but when data collection outweighs understanding, it outweighs opportunities to upsell, cross sell and retain customers.
Innovation in Practice
In a series of “Coffee Shop” sessions, six presenters discussed innovation in practice. Matthew Singleton, director at Flybits, discussed how to contextualize insights to deliver customer experiences at scale. He gave an example of the power of context in action: a businessperson at an airport waiting for an overnight flight receives a push notification from his credit card company extending complimentary lounge access. Utilizing data from purchases, location and flight schedules makes this possible.
Gabrielle Haddad talked about the business problem of trust. A former corporate attorney focused on M&A, she joined a financial institution in Switzerland and worked across four continents. These experiences showed her the difficulty of identifying hard-to-quantify non-financial risks like governance, corruption and fraud. She knew this problem could be solved with technology, so she took a one-year break to study at MIT where she met her company’s co-founder. Together, they launched Sigma Ratings, the first AI-powered non-credit rating agency.
Sajil Koroth, CEO of KapitalWise, discussed how his company’s platform helps traditional financial institutions better understand their customers using AI, which collects data from various sources. KapitalWise looks for opportunities in the data, so banks can personalize offers.
Karl Kilb, CEO of Boloro, discussed how the internet was never designed to be a secure platform to transact. His company designed a multi-factor and multi-channel authentication process, ideal for all forms of identity verification and transaction validation.
Deborah Reuben, CLFP, president of Reuben Creative and member of the Monitor Editorial Board, talked about getting into the “Tomorrow Zone” and thinking about the customer of the future. This involves enabling leaders and their teams to understand where technology is going so they can get ahead of changes and avoid being surprised by disruption.
Reuben said this process starts with developing an understanding of the exponential progress of technology and realizing the pace of change is only going to get faster. From there, she suggested recognizing and intentionally monitoring the forces of change that will impact your business and clients in the next five to 10 years. She encouraged attendees to make a technology watchlist, set time aside to focus on the long-term future and imagine what it could look like given the possibilities of technology.
Avantika Daing, managing director and partner at Plum Alley Investments, a member-driven investment platform focused on investing in STEM companies that have gender diverse founders, led the final Coffee Shop session. She said Plum Valley’s member investors have a tangible and experiential experience and have an interest in eliminating carbon emissions, building a resilient Earth, removing waste from landfills, using gene modification platform to keep the banana from going extinct, building America’s most broken city into its No.16 technology hub, preventing workforce burnout, eliminating cancer and providing access to clean drinking water.
Anderson closed the forum by asking the audience to share important takeaways from the day’s discussion.
The 2020 CEMC Innovation Summit will be held June 3-5, 2020 at The Ritz Carlton of Laguna Beach.