The FinTechs are coming but its different this time

If you ask anyone about Fintechs they will inevitably refer back to the Dot Com bubble (1995 – 2001) which fuelled the rapid growth of the Internet.

However, back then the investment was funding the building blocks of web technology with the most of the money going into Web Infrastructure, Security, Portals, Consulting, Marketing and Content. Unbelievably during this time there was no broadband and we were all having to deal with “Dialup” (In the UK Broadband was first introduced in 2000 and even by 2006 it only had 13 Million users compared to 2016 where 87.9% of adults have access i.e. 45.9 Million users), no real smartphones or tablets existed (The first iPhone arrived in 2007 and the iPad in 2010) so the main access to these technologies was via the desktop. The frenzy also saw massive investments in companies who were filing for IPOs without any revenue.

If we skip forward over 15 years we are now seeing an enhanced level of funding once again in FinTechs however this time its very different. In 2015 we saw the total level of Global deals reaching $14.8Bn and by Qtr. 3 2016 this had increased by 27% (this is in sharp contrast to only 5 years prior where only $2.59Bn was invested (2012)). In the UK $191m was invested in 2012 and by 2015 this had also increased to $1Bn (60% of investment in the UK are going to Challenger Banks, SME Financing, Money Transfer, FX, Digital Currencies and Blockchain).  Also companies filing for IPOs are now showing revenues in excess of $100m.

So why is it different this time? There are numerous reasons why a perfect storm is brewing and I will explain a few below.

  • FinTech Technology – During the Dot Com Bubble you needed to procure Servers, understand security and have funding to support and develop your offering. Now with the rise of Cloud Service like AWS, Azure, Google etc. anyone can build an application with a credit Card and pay by the hour.
  • Building Block Technology – Fintechs no longer need to create everything as you can plug and play the payment, billing, map software etc. (Think UBER)
  • Consumer Technology – During the Dot Com Bubble the barrier to entry was also on the consumer side as you needed internet connectivity (Dial up) and a Desktop. Now technology is widespread and its commonplace for people to carry multiple devices all with Internet Connectivity (Tablets, Smartphones, Wearables etc.)
  • Generational Changes – During the Dot Com Bubble 40 Million Gen Xers came of age. Now there are 85 Million Millennials, all of whom are digital natives.
  • Global Social Community – We are all now a global community over one world wide web
  • Regulation Changes – The regulators are now embracing emerging technologies and offering sandboxes and incubation to start-ups
  • Data is King – With the emergence of data Science and open data initiatives, Big Data and new modelling techniques are changing how we cost propositions and offer/sell insight.

In a recent report from McKinsey & Company entitled “Bracing for seven critical changes as fintech matures” they cite 30 emerging areas which are seeing Fintech growth.

So what should everyone do? Another article from Mckinsey & Company Cutting through the noise around financial technology suggests to some of the capabilities Banks should be making.

It’s all not doom and gloom though for the incumbents. Anyone can adopt FinTech methodologies and the Financial Services industry still needs regulation, oversight and to engender trust.  Everyone therefore needs to become fighting fit, embrace change and not forget a lot of these new technologies will come with a lower price point and enable greater automation with insight for the future.

Digital Hoarding is the biggest blocker to change

Digital Hoarders

Every month new predictions are made by technology analyst companies however most assume that everyone has a preference to use Laptops for more complex website transactions.  Even though this is technically true I do raise the provocation that this is only the case because Mobile Applications currently do not need to fill that gap and most non millennials are happy to live in a world where the main reason to have a laptop is to support their Digital Hoarding addiction (also known as e-hoarding and surprisingly has its own Wikipedia page).  Prior to the advent of streaming and cloud storage the only way to access your library of Music, Pictures and  Videos on the go was to digitise them and store them on your laptop hard drive however this has created a situation where everyone has terabytes of storage and the majority of the Music and Videos that are held so dear are never accessed again.  This habit however has created a real barrier to the removal of the laptop and created a blocker to Innovation.

If we ignore the music and video conundrum as these are easily replaced even if you have to buy them again or use a streaming service the only problem needed to be solved to remove laptops is how do you back up your photos in case the cloud providers loose them.  If we can finally solve this in a way that the consumer would be happy with and eventually break the cycle; laptops could be retired from the majority of homes and we would see a marked shift in technology predications for the Mobile/Tablet world which would ripple through everything we do and touch.  This new era would force websites to be more responsive and have usable apps for every facet of their interactions and in turn radically change the way consumers interact with technology.

Therefore back up those photos, embrace mobile, dump the laptop  and enjoy the ride.

2016 is the year everyone should lock their digital door

Digital Door

Even though enterprises have long come to the conclusion that security is one of the areas which shouldn’t be ignored (especially with the increasing number of high profile data leaks which seem to be announced every month) is this same rigour applied to our personal lives?

If you were asked if it was good practice to lock your house or car you would think it a ridiculous question. It’s also common place not to leave things on show or to expose expensive technology like phones  when out and about as they may also get taken.  Surprisingly however, this good practice isn’t yet the norm for our most valuable assets; our personal information and data.  Even though there are numerous ways to protect your data, there are a few basic things you can do to at least deter attackers.

Home Wifi Router:

In the home your router is your first line of defence against hackers trying to access all your internet enabled devices.  Most ISPs provide advice on their websites specific to the router you have (BT, PlusNet, Virgin etc.) however as a rule of thumb it is always good to:

    1. Change the Access and Admin Passwords
    2. Ensure you are using WPA2 encryption
    3. Change your Network Name / SSID if you have set it to something that someone outside your house would identify with you

Passwords:

Always use complex passwords with letters, numbers and symbols (we do this at work but probably not at home).  Also don’t use the same password for everything, hackers will generally try and get passwords from less important systems hoping you use the same one for your Banking, Amazon etc.

Email:

If you have multiple email accounts and one is used for spam, signing up for newsletters etc., don’t copy your contact list here.  If this account is hacked it’s probably not the end of the world however you don’t want all your contacts being spammed. Also never click on links from unknown senders or confirm personal details or passwords (Banks or Financial institutions will never ask for this over email).

Mobile Phone/Tablets:

There are a few things to keep your mobile technology safe;

    1. Back it up – Your mobile technology will one day either be stolen, dropped or compromised
    2. Keep the operating system and apps up to date.  Updates usually occur to counteract new vulnerabilities

Voicemail:

There have been numerous Voicemail hacking scandals in the press however the word “hacking” is a little generous.  Have you changed the factory setting / out of the box number or password to access your voicemail?  It doesn’t take much for someone to guess 123 or 1234

Open/Free Wifi:

Even though it’s great to get free internet when you are out and about in coffee shops etc. however don’t forget people could be watching or monitoring what you do so don’t access websites or applications where you use a important password, like banking, shopping etc. as you would not be happy if someone got this.  If you need to do this ensure you use a VPN.

The above isn’t everything you can do but it would be a good new year resolution to start protecting your most valuable asset…..you.

Is it time to ask, “Where exactly was my data stored” ?

Screen Shot 2015-10-07 at 13.35.23

As the urge to hoard becomes less and everyone becomes more comfortable using web services in the cloud to run applications and store data how confident are you as to where your data is and could it be viewed without your knowledge? Financial Services have always worried about which jurisdiction the hosting servers came under and whether they were covered under regulation plus enterprises are now beginning to ensure that there is data governance and ownership for all their data. However how often should you review this?

This week the European Court of Justice has ruled that the 15 year old deal between the US and Europe (The Safe Harbour Agreement) was invalid meaning that many Businesses will now be scrambling around to put replacement measures in place to ensure that correct privacy rights are in place plus asking “did we ever use a service that was covered by Safe Harbour in the last 15 years?”

Interestingly, the ruling was not brought about by a Business but an Austrian law student against Facebook following the Snowden NSA surveillance revelations. Does anyone really know when they download an App from Apple or Androids App Store where this data is being stored? Do organisations know where the live and DR servers are located for every cloud provider, hosting company or SAAS product just in case privacy laws change? Should we? As more and more technology moves to the cloud maybe providers will offer transparency as to where data is being stored so choices can be made however as IT becomes a Global commodity there certainly will not be data centres in ever jurisdiction on the planet any time soon so in the meantime just keep a note where you kept that data as you may need to review it sooner or later.

Digital Convergence is key but where is all our Data?

exit

Since the inception of the internet back in 1991 we have all been on a journey to digitise our lives. In the early days (Dial up started in 1992 in the UK) you could go off and make a cup of tea whilst your email downloaded however the transition from paper had started. Things got a lot faster in 2000 when broadband arrived however you were still very constrained by how much you could afford to spend on a PC and your knowledge of the Internet. Everything changed however over the next decade as numerous products launched e.g. iTunes, YouTube, MySpace, Facebook, Flickr, LinkedIn, Instagram to name but a few; hardware became immensely cheaper and thoughts of cybercrime didn’t even enter our minds. In the 15 years since it is unbelievable to think how far we have come and of course where it will go, however just a scary thought can you even count have many sites have you signed up for with a handful of email addresses and provided all of your personal details? (Hopefully you don’t use the same passwords for your Banking as you do on social sites). As technology both in the enterprise and the consumer space becomes cheaper and everything moves to the cloud it is extremely important to think about your data (especially what you are giving out, to whom and how you will get it deleted). As a greater number of the established players buy up competitors it does mean you are required to sign up for less to get greater coverage however that does mean they will all have more visibility of your data. Apart from the normal considerations when you sign up for a Cloud Service i.e. Usability, Security, Jurisdiction etc., I bet the one thing you do not consider is how can I leave (This is naturally what they hope for too as the more cloud services are used the harder it is to leave unless you have a plan from day 1 as the data becomes too intertwined to extract).
I have had a few instances recently where it has taken months to exit cloud providers due to data removal, plus some recent cyber events like the hacking of Ashley Madison have highlighted that even companies who charge to remove your data sometimes still don’t actually remove it. Therefore as we all move more and more of our data to the cloud don’t forget to keep your eye on your data so as “Digital Convergence” becomes the next buzz word you will know where everything is and have suitable plans to ensure you can close everything down before you migrate to bigger and better things. Your reputation may just depend on it.

Customer Journeys and happy paths

Happy

Even though much has been written on the virtues of mapping digital customer journeys with the goal of ensuring people get to their destination on a website or via a map in the most efficient way, is this journey really the “happy path” for the user?  Is the shortest path always the happiest if it only gains a few seconds or clicks? In a recent Ted Talk Daniele Quercia explains how he is using Crowdsourcing to redefine suggested routes on a map which not only show the Shortest but also the most Beautiful, Happy and Quietest and all only exhibit  a slight increase in travel time. The logic is that most people would rather enjoy the journey than be stuck in traffic just because it is the shortest route. He is currently using Crowdsourcing to ask people to compare pictures along routes and vote on the merits of the image as to whether it makes them feel happy, sad, if the picture shows congestion or is quiet etc. From this, variant routes can be offered that go through parks, quiet neighbourhoods etc. In future they are also looking to overlaying sounds, smells and memories.

Einstein once said – Logic Gets you from A to B, Imagination will get you everywhere.

This did however get me thinking about how these thoughts could be used to differentiate customer journeys on websites and applications. Wouldn’t it be good if different mediums had different journeys or interactions? Just because customer data is required should we always be faced with tedious alphabetic responses e.g. when asked to input our country do we really need to pre-guess the mind of the developer as to how it was defined? (In the UK you generally have to guess does a site need Great Britain, Britain, England, United Kingdom, UK etc. or even if the developer has put United Kingdom and USA randomly at the top or bottom of the list) Wouldn’t it be better for the device to use GPS and for you to confirm a Flag, especially if it’s on a small form factor device like a mobile? Maybe a boring form could be broken up with useful information or different ways to submit, maybe even weaving in gamification. In the future focus will need to be given to the data submission process and how this can be made happier for the customer and the companies that change this will certainly differentiate themselves, just think how may times you have started filling in personal information on a site and just got bored of the process and go elsewhere where it is either more pleasurable or easy. Maybe the happy path needs to be one that the customer enjoys not one that gets you from A to B in the most efficient manner? Business shouldn’t be boring even if the process is.

Customer segmentation using Big Data

Customer

 

One of the benefits of data and big data is that it enables greater understanding of the customer and allows the enterprise to create multi dimensional segmentation models. Prior to this data being available the best way to segment the customer was to create generic personas and then create strategies based upon these. Personas although valuable are very generic and generally do not incorporate known life stage, aspirational and preferential desires of the customer. By collecting information based on known internet behaviour we are now able to create a multi dimensional models which should give greater customer understanding and enable future investment in products and technologies which will satisfy known desires rather than perceived.