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GfK - Lessons Learned…From FinTech’s Impact Across Financial Services
The document discusses the impact of fintech on financial services, highlighting the rise of mobile commerce and the importance of smartphones in consumer banking. It emphasizes the need for traditional financial institutions to adapt to new technologies and consumer preferences, particularly among millennials and underserved populations. Key innovations in areas such as payment processing, lending, and insurance are outlined, showcasing how fintech is reshaping these sectors.
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GfK - Lessons Learned…From FinTech’s Impact Across Financial Services
- 1. © GfK October11, 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
- 2. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Tom Neri Head of Financial Services GfK North America …service providers must reimagine the entire customer engagement to occur on a smartphone. 2
- 3. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services A Convergence of 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
- 4. © GfK October11, 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
- 5. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services FinTech Nearly 1,400 firms with $33 billion in capital, working across 16 financial services categories © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 5
- 6. © GfK October11, 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 The underserved consists primarily of two main groups: 25% 68% 7% Check cashing Money orders Payday loan svcs. Pawn shops Wage paymts. Prepaid cards 6
- 7. © GfK October11, 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
- 8. © GfK October11, 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 8
- 9. © GfK October11, 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 9
- 10. © GfK October11, 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
- 11. © GfK October11, 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 Z 18-24* GEN Y 25-34* Social natives Book smart & savvy Fun & frugal Fun first, work next Connected Confidence Global minder “Both / and” stress Friends = family Close to doting parents © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 11
- 12. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 22 29 33 39 4345 54 63 60 67 29 37 43 54 58 12 21 25 32 34 5 10 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 12
- 13. © GfK October11, 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+ 13
- 14. © GfK October11, 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) 14
- 15. © GfK October11, 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
- 16. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Lesson 1 for Insurance industry … Ways to engage consumers EducationAccessible Experiences PersonalizationFinancial Fitness Trust & Authenticity 16
- 17. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial Innovations Solutions Broader Industry Perspective What’s working ??? Retail banking app 17
- 18. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial Innovations Solutions FinTech Evolution 18
- 19. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial Innovations Solutions FinTech Evolution 19
- 20. © GfK October11, 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 20
- 21. © GfK October11, 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-store US market: 3% estimated share of all PAYMENT TRANSACTIONS in 2015 Other Credit Card Cash Mobile Device Debit Card 3% 38% 29% 4% 27% 21
- 22. © GfK October11, 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 22
- 23. © GfK October11, 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 23
- 24. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial Innovations Solutions FinTech Evolution 24
- 25. © GfK October11, 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. 25
- 26. © GfK October11, 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 26
- 27. © GfK October11, 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 27
- 28. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial Innovations Solutions FinTech Evolution 28
- 29. © GfK October11, 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. 29
- 30. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial innovation solutions 30
- 31. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Financial Innovations Solutions FinTech Evolution 31
- 32. © GfK October11, 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. 32
- 33. © GfK October11, 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 traditional notion 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. 33
- 34. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Emerging FinTech Applications
- 35. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Smart Home 35
- 36. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services© GfK 2016 | The Connected Consumer Rethinking our relationship to the home… 36
- 37. © GfK October11, 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% 37
- 38. © GfK October11, 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% 38
- 39. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Connected Car 39
- 40. © GfK October11, 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 Manager 4. Ultra Safe A car that makes driving as safe as possible. Connectivity with other cars, cruise control, integrated cameras 3. Data Tracker A car that tracks usage , runs diagnostics, checks repair costs; records accident data automatically 6. Self Sufficient A strong but light electric car ‘Connected Car’ Concepts We asked 5,800 consumers to evaluate 7 concepts 40
- 41. © GfK October11, 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% Ultra Safe Data Tracker Entertainment Life Manager Home to Destination Self Sufficient 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. 41
- 42. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Source: GfK FutureBuy® 2015 42
- 43. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Source: GfK FutureBuy® 2015 43
- 44. © GfK October11, 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 44
- 45. © GfK October11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services Thank you.