Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

How to survive and thrive in the digital age of financial services

9,202 views

Published on

It wasn’t that long ago when we would call a travel agent up when we wanted to book air travel and visit a music store when we wanted to hear the latest release from our favourite band.

In less than 30 years, digital technology has completely refashioned how we consume travel services and music products, along with a host of other consumer goods and services. Increasingly, we search online and book our own travel, from the airline “tickets” to the small B&Bs in the places we visit. And more and more of us are subscribing to music services, effectively renting access to our favourite music rather than buying and owning copies of it.

How a vast array of consumer products and services are conceived, marketed and sold to us as consumers has undergone a radical transformation in the digital age. Plummeting technology and communication costs has placed powerful mobile devices in our hands that have completely changed how we get information, stay connected with others and entertain ourselves.

This digital revolution has largely impacted the back-offices of the financial services industry, but it has notably sidestepped the distribution systems. Virtually every major financial product or service is supported by digital back-end systems. Yet, the marketing and sales of many products, such as investments and insurance, continues to be carried out through a legacy distribution system consisting of advisors, agents and salespeople.

However, all of this is about to change dramatically. The revolutionary transformation that digital technology has triggered in consumer businesses is about to be felt in financial services businesses.

In this presentation, I explain WHY digital technology undermines the prevailing business strategy of the past 30-40 years and HOW financial services firms as well as individual advisors and agents can adapt their businesses to the realities of the new digital age of financial services.

“The less your business has changed in the last 30 years, the more it’s about to change.”

  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Hey guys! Who wants to chat with me? More photos with me here 👉 http://www.bit.ly/katekoxx
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • @Mx3 Metrics Thanks for the feedback!
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Well done.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

How to survive and thrive in the digital age of financial services

  1. 1. Surviving and Thriving in the Digital Age of Financial Services By Jay Palter jaypalter.ca | @jaypalter | jay@palter.ca
  2. 2. Digital technology is not new. It has transformed the consumer economy over the past 30 years.
  3. 3. Yet, the way financial services are marketed, sold and delivered has remained largely the same over the past 30 years.
  4. 4. Yet, the way financial services are marketed, sold and delivered has remained largely the same over the past 30 years.
  5. 5. This presentation explains the why, what and how of the digital disruption in financial services.
  6. 6. digital technology is changing business strategy in financial services. strategies financial service providers must adopt in the digital age. to retool your financial services business for the digital age.
  7. 7. WHY DIGITAL TECHNOLOGY IS CHANGING BUSINESS STRATEGY IN FINANCIAL SERVICES Part 1
  8. 8. Digital technology is not new. Let’s take a quick look back to see how much has already changed.
  9. 9. It filled an entire room. In 1964, IBM launched the System 360 computer. Also, the year I was born.
  10. 10. In the 1970s, Jobs and Wozniak focused on making computers smaller and personal.
  11. 11. The personal computer (PC) era was launched in the 1980s with IBM’s 5150. I owned one of these.
  12. 12. Soon, mobile computing would transform the personal computer. But not quite yet…
  13. 13. Portables got smaller.
  14. 14. Portables got smaller. And eventually, thin as air.
  15. 15. How many of these mobile phones have you owned over the past 20 years? This was my first mobile phone.
  16. 16. Remember the technology we used in 1994?
  17. 17. Remember the technology we used in 1994?
  18. 18. Remember the technology we used in 1994?
  19. 19. Remember the technology we used in 1994?
  20. 20. Remember the technology we used in 1994? And now?
  21. 21. Remember the technology we used in 1994? And now?
  22. 22. “THE LESS YOUR BUSINESS HAS CHANGED IN THE PAST 30 YEARS, THE MORE IT’S ABOUT TO CHANGE.”
  23. 23. Let’s look at the impact of digital technology on two familiar businesses – music and travel.
  24. 24. For a century, audio technology was basically the same. (A needle dragged along a disk spinning on a platter.)
  25. 25. Then, music became portable and digital.
  26. 26. Then, music became portable and digital.
  27. 27. Then, music became portable and digital.
  28. 28. Then, music became portable and digital.
  29. 29. Then, music became portable and digital.
  30. 30. Then, music became portable and digital.
  31. 31. Music sales grew in the CD era…
  32. 32. Music sales grew in the CD era…
  33. 33. But have been falling ever since.
  34. 34. Ever since Apple launched iTunes.
  35. 35. When was the last time you used a travel agent to book a flight?
  36. 36. We used to need these to get on a flight.
  37. 37. Now, we book online and fly ticket-less.
  38. 38. What’s left for travel agents to do…
  39. 39. …when the travel industry is online and searchable by travelers?
  40. 40. So, what does this have to do with financial services?
  41. 41. So, what does this have to do with financial services? EVERYTHING.
  42. 42. In his TED talk, Philip Evans argues that digital tech is changing business strategy. His argument goes like this… Click image to watch.
  43. 43. Modern business strategy is based on two concepts Economies of scale, and vertical value chains.
  44. 44. Economies of Scale Economies of scale refer to the cost advantages that a business obtains due to expansion. By using scale to lower cost of production, a business can increase profitability.
  45. 45. Vertical Value Chains A value chain is a string of companies or players working together to satisfy demands for a particular product. Links in a value chain typically have transaction costs.
  46. 46. “There are really two components to transaction costs. One is about processing information, and the other is about communication.” – Philip Evans
  47. 47. The thing is, transaction costs have fallen dramatically in the past 20-30 years. “There are really two components to transaction costs. One is about processing information, and the other is about communication.” – Philip Evans
  48. 48. Transaction costs are falling with computing costs…
  49. 49. …and tumbling storage costs…
  50. 50. … and declining bandwidth costs.
  51. 51. Plummeting transaction costs are deconstructing vertical value chains. And undermining the advantages of economies of scale.
  52. 52. Vertical value chains are being replaced with horizontal ones. And businesses with customer relationships are leveraging them.
  53. 53. New market entrants now want a piece of financial services.
  54. 54. Big Retail has distribution reach and logistics capabilities. RETAIL
  55. 55. Big Tech has brainpower and millions of engaged users. RETAIL TECH
  56. 56. Even traditional media are leveraging their readership. RETAIL TECH MEDIA
  57. 57. And these changes are happening. Now. +
  58. 58. “The less your business has changed in the past 30 years, the more it’s about to change.”
  59. 59. WHAT STRATEGIES FINANCIAL SERVICES PROVIDERS MUST ADOPT IN THE DIGITAL AGE Part 2
  60. 60. For financial advisory businesses, success in the digital age will be all about building, serving and leveraging relationships. Here’s why…
  61. 61. Virtually all financial transactions will be automated. “Automation is going to take over every single repetitive task,” predicts Louis Gave, co-founder of Hong Kong–based research firm Gavekal “The financial industry’s safe and steady margins will come under heavy pressure, rendering a lot of capital (both human and monetary) deployed in the current infrastructure obsolete,” predicts Gave. Read the full article: http://www.cfapubs.org/doi/pdf/10.2469/cfm.v26.n2.12
  62. 62. If your business is transactional, now is a good time to broaden your offering and leverage your client relationships.
  63. 63. Some wealth managers get it and are rebranding as financial life managers.
  64. 64. This is what their clients are telling them: A quality financial life is not only about money, but that’s what financial industry talks about most. Every major turning point in life is about having to make a trade-off. Not enough people talk about spending wisely, only about investing wisely. Turning points and life’s milestones are most important (starting a business, starting a family, etc.).
  65. 65. Financial service providers need to recognize the lifetime value of client relationships. “Banks need to make customer lifetime value actually translate to a lifetime value from the financial provider – not the other way around.” ~ Bradley Leimer (Emphasis mine. Leimer specifically talks about banks, but this applies to all financial service providers. Source: Bradley Leimer Interview: Empowering Lifelong Customer Relationship in a Digital World)
  66. 66. How does leveraging client relationships drive growth?
  67. 67. Relationships are your most valuable asset. • Keeping clients is less expensive than getting new ones • Repeat clients spend more • Referrals are low cost business development • Relationships can be leveraged for cross- selling
  68. 68. Engaged clients refer more!
  69. 69. Factors driving client engagement • Frequent client contact • Broad scope of planning • Coordinating other advisors • Multi-generational approach • Leading with vision & focus • Partnering & getting feedback Source: Economics of Loyalty, J. Littlechild, 2011
  70. 70. HOW TO SURVIVE AND THRIVE IN THE DIGITAL AGE Part 3
  71. 71. How do you build an advisory practice that cultivates client engagement and leverages your relationships?
  72. 72. 3 ways to survive and thrive Digitize your business Partner with everyone Be your brand
  73. 73. Digitize your business
  74. 74. Digitize your business • Capture and manage client data digitally The more you know about your client, the better you can serve and advise.
  75. 75. Digitize your business • Market and cross-sell efficiently Develop a system for turning client needs into opportunities.
  76. 76. Digitize your business • Protect your client’s security Failure to prioritize security can have devastating impacts for your practice.
  77. 77. Partner with everyone
  78. 78. Partner with clients • Stop thinking like a “supplier”, “vendor”, or “broker” • Strive to engage and serve your clients holistically, as partners
  79. 79. Partner with peers • Build an advisory dream team to serve more of your client’s needs • Strive to be the quarterback of your client’s advisory team
  80. 80. Partner with your community • Align your business with the betterment of your community • Partner with a charity or social entrepreneur and tie your mission to a cause
  81. 81. Be your brand
  82. 82. Define your brand and culture • Focus on how to deliver lifetime value for clients • Build a process and culture around your client experience
  83. 83. Become a communications company • Educate, entertain and engage clients • Curate great content and be helpful online • Listen and engage with your clients, prospects and audience via social networks
  84. 84. Be your brand • Leverage your personal brand • Empower your team to be brand ambassadors • Stop telling people about your brand and just build a business that embodies it
  85. 85. That’s it. Now, let’s do it! Written and produced by: Jay Palter jaypalter.ca Strategy & Consulting Speaking & Training

×