Improving Client Engagement with Technology

October 18, 2012

Readers of this blog know that my primary focus is the convergence of high-tech and high-touch that I believe IS the future of wealth management. I think Balance Financial gets this better than most fintech firms, and that is why I am proud to serve on their Advisory Board. Read on…

Balance Financial Inc.

A great article caught our eye the other day over at http://www.Finextra.com.  It was an interview with Sungard Investment Systems President Daniel Bardini.  Sungard works with financial services firms around the country providing various technology solutions to private banking institutions.

Daniel made some great points that we thought were worth repeating.  Check out the video yourself, it is pretty quick:  http://www.finextra.com/video/Video.aspx?videoid=265

Here are some of the highlights

According to Bardini, the future is about “engaging clients in new ways, more interactive.”  Further, “traditionally banks invested in back office.  This is more and more a commodity.  Focus is moving to front end tools that support relationship managers on interactions with clients.”

And finally, “Relationship managers struggle to get a 360 degree view of clients.  Need new ways of engaging clients.”

We could not agree more.  The core investments made in Private Banking and wealth management over the last several years…

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Learning from Customers in Social Media

October 16, 2012

I was recently interviewed by BAI Banking Strategies on the evolving use of social media in banking and wealth management.

Here is an excerpt from the article, which was published yesterday:

Nicols, a former executive with Minneapolis-based U.S. Bancorp, agrees that social media can warn financial institutions of potential problems. “You ought to be happy when a client is complaining because you’re learning something,” he says.

Young customers are more likely to be influenced by what their peers do than older customers, which, in turn, highlights the potential for social media, Nicols says. He cited the example of a customer who had a problem with his bank that was successfully resolved, which led to an enthusiastic recommendation of the bank to other consumers in social media. “There are whole businesses built on peer recommendations, such as Yelp,” which posts online customer reviews of businesses, from restaurants to bank branches, Nicols says.

Banks also have to use the right channels to respond to customer inquiries, Nicols adds, citing an occasion when a CEO of a technology company tweeted the bank that he wanted to talk to someone about a mortgage. The marketing department, which received the tweet and didn’t know how to respond, sent an email to Nicols, who immediately tweeted the executive. “Customers are giving you signals about how they want to interact and you need to pick up on those signals – or lose business,” he says.

Read the whole article here: BAI Retail Strategies


Wealthfront rolls out yet another tool for the newly Valley rich

October 15, 2012

Another interesting example of disruption in the wealth management business.


Demystifying Social Media: It’s All About Business Strategy

September 28, 2012

(I originally wrote this as a guest post for the management consulting and strategic communications firm Beyond the Arc. You should check them out for a lot of great information on customer experience, strategy, analytics and social business. I will be speaking on a panel on How to Monetize Social Media with their CEO Steve Ramirez, along with Citibank’s Frank Eliason, cited below, at the BAI Retail Delivery Conference on October 9.)

I am sometimes asked to give social media advice to others in financial services.

“I wouldn’t necessarily consider myself a social media expert,” I once told a counsel-seeker.

“You’re a banker with a blog”, he shrugged, “the bar’s pretty low.” 

Well, ex-banker now. I now run my own consulting business for financial advisors and firms, and many of them have questions about social media strategy. I often start by quoting Ron Shevlin, Aite Research analyst and Snarketing 2.0 blogger:

“There is no such thing as social media strategy. There is only business strategy.” 

— Ron Shevlin

It is not uncommon for business managers to seek the holy grail, the silver bullet that when deployed, will magically transport their business to new heights. In the late 1990s, it was the internet. Lousy businesses added “dot-com” to the end of their name, changed their logo to purple and green, and threw up a website. They were still lousy businesses, and the internet didn’t change that. In some cases, it may have even accelerated their demise.

Social media is just a tool to use in running your business. There is nothing magical, or necessarily even compelling about it. Lots of very successful businesses have small or nonexistent social media presence. Frank Eliason, Global Head of Social Media for Citibank, and author of the book @Your Service: How to Attract New Customers, Increase Sales, and Grow Your Business Using Simple Customer Service Techniques, cites Apple as an example of a well-run, much-admired company that does not focus much on social media. Retired athlete Michael Jordan’s page has nearly triple the number of “likes” of Apple’s page, and dead musician Michael Jackson has nearly seven times as many.

Transparency: Good News and Bad News

Participating in social media increases the transparency of a company’s operations and people, which is a positive thing for most customers. The bad news is that poor practices and behaviors are highlighted as well. If you have a dumb policy or poorly trained people or a bad product, that will become readily apparent even sooner through social media. Maritz Research found that 51% of consumers who complain via social media expect to be contacted, but that 85% of those outcries are not addressed at all.

I sometimes air complaints and compliments via Twitter, partially as a social experiment. The range of results is stunning. I had a sleepless night in a Westin hotel due to a loud banging noise caused by a problem with air in their pipes. I tweeted my frustration and was contacted within hours by both the hotel management and their Starwood Preferred Guest loyalty program, and each offered me apologies and compensation for my inconvenience. My frustration was quelled and I remain a loyal SPG guest.

Quite the opposite experience I had with a major retailer. I was not having any luck reaching someone on their 800 number with the authority to reverse an express shipping charge to correct their own mistake, so I tagged them on Twitter. The next day I received a tweet apologizing and asking me to call in with a “reference number”, but when I called in, I was right back at the low level where I had begun. The “reference number” was meaningless and no one on the phone had any more information or any more authority than on my original call. I try to shop elsewhere.

What is Your Business Strategy?

What are today’s key business challenges and how can social media help?

Acquiring new customers

How can you use social media to differentiate in a crowded business and gain market share over the competition?

  • Monitor social networks for disgruntled customers of competitors. Respond better than their own providers.
  • Run targeted ads to reach your ideal customers efficiently.
  • Demonstrate your expertise and thought leadership through blog posts, white papers, case studies, etc. Not only does this showcase your unique value, it helps prequalify prospects searching for specific solutions.
  • Be there when prospects are looking for the services you provide. The CEO of a major social network tweeted that he was trying to reach someone from my last bank about a mortgage. We were just starting to monitor Twitter and our social media team sent the message to me, so I responded on his terms– on Twitter.

Retaining existing customers

Half of bank customers are considered “ripe for change”, and most change because of changing life circumstances.

  • Monitor social networks for disgruntled customers of your own firm. A problem solved promptly and well can create more loyalty than a customer who experiences no problem at all.
  • Make your customers aware of current relevant offers or promotions. Providing offers only to acquire new customers is a turn-off to your existing customers.
  • Provide multiple channels for sales, inquiries, questions, and problem resolution.
  • Make sure you are providing your customers a way to engage in two-way (or multi-way) conversations. Social media is not just a soapbox from which to hawk your wares.

Expanding relationships with existing customers

In the consumer banking business, as many as 80% of customer relationships are unprofitable. Those statistics may not be accurate in your industry, but some variation on the Pareto Principle (the “80/20 rule”) tends to exist in every business– a small number of customers typically provides profitability to subsidize the vast majority.

  • Make more of your relationships profitable with relevant offers for additional or complementary products.
  • Pay attention to changes in life circumstances that may call for additional services. (Weddings, babies, moving, etc.).
  • Leverage your platform for mass customization.

The View from the Bridge

No matter what business you’re in, it’s likely you are dealing with these basic issues. A social media presence won’t make them go away, and poor social media practices will make them worse. Focus your business strategy on solving relevant customer problems, and leverage social media as an enabler. There are plenty of social media experts who can design just the right digital campaign to reach just the right markets with just the right messages –but first, ask yourself a key question (and one that we have discussed here before): Are you repainting the walls, when you have a serious crack in the foundation?


Finovate Fall 2012 Best of Show Winners

September 17, 2012

Another Finovate conference is in the books. The Best of Show winners included MoneyDesktop, one of the companies on my watch list for accelerating the convergence of high tech and high touch, and one that should have been on my list, but had eluded my foresight (Learnvest).


New York welcomed the Finovate road show to town with weather was so perfect that it faded into the background like a perfect picture frame. For the most part, the show graced the perfect frame beautifully, with attractive and engaging interfaces being the rule. So much so that Aite analyst and Snarketing 2.0 blogger Ron Shevlin mused about the attendees being “SedUIced”  by interfaces over business impact.

It’s a shame that intermittent WiFi and cell coverage inside the hall occasionally defaced the exhibition with digital graffiti. If I hadn’t known that Javits Convention Center has distanced itself from its early reputation as a patronage mill for the mob, I would have thought that a few of the exhibitors had spurned pre-show shakedowns behind the dumpsters. (“It would be a real shame if that pretty app of yours somehow couldn’t connect to the network right in the middle of your demo…”)

Making the Complex Simple

A wise CFO I once worked with proclaimed that were two kinds of people in the world, those that make the complex simple, and those that make the simple complex.

There weren’t too many in the latter camp, the Finovate team screens and coaches demonstrators well. Still, a few seemed to have slapped technology onto a convoluted process and/or addressed an irrelevant problem; or as someone tweeted– solved problems no one has with technology no one wants. There were (only) a few moments that felt like SharkTank, and I secretly wished for the schadenfreude of a venture capitalist throwing a cold glass of reality on the smoldering embers of a bad idea.

But the majority of the demos addressed relevant problems and simplified the complex with good design, and most appropriately recognized mobile as a significant front in the fintech wars.

All of the Best of Show winners (in alphabetic order):

  • Credit SesameMint and LendingTree had a very good looking baby. Credit-centric PFM with recommendations for managing debt.
  • Dashlane addressed the sometimes laborious process of filling out multiple fields for e-commerce checkout with a single solution for any vendor on any platform.
  • Dynamics showed a payment card with a built-in switch that enables customers to choose multiple payment sources. (Parenthetically, I “invented” this a few years ago in an ideation session. I also “invented” BetaMax when I was nine. And flying suits.)
  • eToro had an impressive demo of a pretty product that I happen to categorically reject. Their CopyTrader technology enables stock traders to harness the “wisdom” of the crowds in their own gambling, er, trading. It was a definite crowd favorite, but I have seen the prequels “Internet Stocks” (1999) and “Real Estate” (2007). They were both gripping thrillers with horrible endings.
  • LearnVest was a glaring omission from my pre-show list of three firms to watch. The firm and it’s founder and CEO Alexa von Tobel have been getting much well-deserved press, and their latest contribution to the convergence of high-tech and high-touch includes the ability to collaborate with a financial planner.
  • MoneyDesktop repeated as a back to back winner. Their patent-pending “bubble budgets” provide a nice graphical representation of budget items and they continue to refine their ecosystem with synching iPad, smartphone and desktop apps.
  • PayTap offered a slick and apparently effective solution for paying shared bills via multiple payment sources and social networks. They also pitched it as a way to make it easier when you are asked to help pay someone else’s bill. I’m looking for the blacklist feature on that one…
  • ShopKeep POS enables merchants to run a store from an iPad. Another great example of making the complex simple, with a great interface.

All in all, another great show full of smart people and innovative ideas, and another reminder that we are still in the early stages of disruptive technology in financial services.

This is really starting to get good.


Apple Event Wrapup via PandoDaily

September 12, 2012

Someone had to be at the Apple event today while I am at Finovate. I’m glad PandoDaily was there.


When the Affluent Become the Unbanked

September 12, 2012

Concern about those who have been left behind in receiving financial services (“the unbanked” and “the underbanked” ) have been popular topics of conversation amongst bankers and regulators over the past few years.

An important thread of these conversations has been the fact that in many cases, it is the customers who are leaving the traditional financial service providers behind, not the other way around.

I spend most of my time working with the “overbanked”– affluent families who have no shortage of financial services options, and as I have written previously, they too can find a variety of services to borrow, hold, invest and move money without the need for a traditional bank.

Yesterday’s Wall Street Journal reported on an affluent family who has “…no need, desire or want to go to a regular bank,”

Footnote to Financial Crisi: More People Shun the Bank – WSJ.com



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