Open banking. Blockchain. APIs. Cryptocurrencies. Unless you’ve been living under a rock for the last few years, it can’t have escaped your attention that the worlds of finance and technology have irrevocably collided, changing who and how we interact with when it comes to our money.
1. ‘Alexa, set up a mortgage’
According to Google, 20% of all internet searches are done by voice. That’s a lot of time spent with Alexa, Cortana and Google itself. It’s a trend that’s slowly being reflected in the way we bank. With Natwest pioneering a voice banking trial in August last year, customers are already beginning to get used to the basics – money transfers and simple payments.
Introduction to voice banking by Natwest
But take a trip to Brazil to see where we’re headed. The BIA app by Banco Bradesco is fully voice enabled, and fully integrated into every voice platform, allowing customers to perform more complex transactions by talking, including direct debits, loans and even mortgage applications.
From better accessibility for the visually-impaired, to the ultra-simplicity offered to broader society, it’s fair to say we’ve barely scratched the surface for the role voice has to play in brand experience.
2. The end of the road for traditional insurers?
For the first time in history, insurance’s household names are beginning to worry. In an age where brands collect more consumer data than ever before, tech brands have a natural advantage over insurers when it comes to informing future behaviour, and more importantly, risk.
With Thomas Buberl, AXA’s CEO, recently claiming that the company’s biggest competitors will soon by Apple, Google and Facebook, the race has now started to build and acquire ‘insurtech’ to keep pace with market disruption (with $4.3bn spent in 2019 alone).
""Facebook, Google, or Apple... I believe those are our competitors of tomorrow, and not Lemonade or other small insurance companies.""
But prophetically, big tech has emerged as the frontrunner to steal market share. Tesla, with its always-on approach to data collection is now able to offer insurance premiums that deliver realistic estimates, based on more than assumed risk, but personalised, quantified behaviour. This approach means that in California, Tesla’s direct to consumer premiums are on average, 30% cheaper than what insurer’s traditional names can offer.
It seems the only chance big insurers have of staying afloat is to spot and invest the insurtech talent that will find the data sets that will keep their prices low, and their offers increasingly relevant.
3. Banking’s intervention
Collectively, it’s as if retail banks are sitting customers down and saying ‘look, we need to talk’. Since Monzo became the first UK bank to allow the introduction of spending blocks in gambling (helping customers protect themselves from, well, themselves), banks are increasingly helping consumers to curb negative behaviour.
Volt Bank, Australias first ‘virtual bank’ helping to identify customer saving opportunities
Volt Bank in Australia is the latest example of this. As Australia first ‘virtual bank’, their data analysis helps to identify savings opportunities, and suggests custom spending blocks to help prevent overspending in specific categories – wouldn’t it be nice to wonder where all that pocket change had gone as you sip that 2nd latte of the day?
The question for retail banks is how far they’ll go. When many of the companies they’re beginning to block in retail could be a huge prospect in commercial banking, they need to ask themselves what their brand really stands for.
4. Coining it in
Yes, we know at one point Bitcoin was worth more than gold. And yes, we know that it then lost 65% of its value in a day. But although cryptocurrencies aren’t anything new, the way they’ll be used by brands in the future certainly is. As companies see the value of creating closed systems – where own-label currency encourages new loyalty and liquidity – the big brands are minting their own currencies to capture market share, and more importantly, create new value for their customers.
‘Libra’ from Facebook is promising to ‘reinvent money’. 1.7 billion people are currently ‘unbanked’ – many of whom are on Facebook. Libra is offering brands, and the people that pay for their services, a chance to access a huge pool of people looking to spend, with Spotify, Vodafone and Kiva already signed up. It’s a platform that’s looking to remove the barriers to entry for a new type of consumer and making the world of payments and transfers infinitely easier.
And it’s not just the tech giants running to be involved. When European football giants are clamouring for cryptocurrencies, you can see the potential for engagement off the pitch. That’s what Malta-based currency Chilliz has recognised. By launching Socios, a blockchain based engagement rewards app, football clubs such as Athletico Madrid and Paris St Germain can now encourage fans to answer surveys and earn ‘fan tokens’ in return for discounted merchandise and experiences with the clubs they love.
Money is changing and, if you can’t keep up, the question remains: will you survive? From insurance to investment, and everything in between, it’s vital to keep an eye on the competition and not rest on your laurels.