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The Future of Finance is Human

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Key note presentation i gave at the Future of Finance 2.0 conference in Munich, 22/23 June 2017
The key message was that in all the current driver towards digital transformation and fintech/insurtech/regtech we should never forget to keep the human in the center of our thinking. Otherwise our innovation efforts will be pointless and lossmaking

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The Future of Finance is Human

  1. 1. Technology driven, but human-centric FUTURELAB The future of finance is human! 122/06/2017
  2. 2. FUTURELAB Somecredentials Stefan Kolle All nice & well … but I still need to grow! Allow me to introduce myself Welcome
  3. 3. We make Customer-Centricity happen. Profitably. Industry solutions A structured approach for automotive firms to embed the customer perspective in every aspect of their business, from customer journey development to POS training. Automotive An approach for financial retailers, insurers and asset managers to capture the attention of mass-affluent & high-net- worth customers. (Mass-affluent) Finance A structured approach for telecommunication firms to embed the customer perspective in every aspect of their business. Telecommunications One of the strongest customer strategy teams in EMEA World-class credentials To make the world a more customer-friendly place (for fun & profit) Our Purpose Why we exist We help you make customer experience happen. Profitably. Our Promise What we deliver Strategic Programmes Tactical interventions • Increase customer value • Manage multi-channel journey • Improve employee effectiveness • Improve commercial impact • Align departments, processes and systems around the customer. • Develop a customer mindset • Transform the organisation • Challenge the industry Our Activities What we do Strategy Experience Customer VoiceCulture Enablers Design Develop customer programmes based on current and future needs. Implement Translate ideas into processes, KPI’s, trainings, that ensure implementation. Accellerate Enthuse all stakeholders so they (pro-)actively contribute. Sustain Ensure continued momentum and innovation across the business.
  4. 4. Technology driven, but human-centric FUTURELAB The future of finance is human! 422/06/2017
  5. 5. 22/06/2017 5. Is that so? A difficult question
  6. 6. 22/06/2017 6 Remember these? ...Or these? How about these? My pain I’ve been a technology preacher all my life
  7. 7. FUTURELAB 22/06/2017 722/06/2017 My pain I’ve heard a lot of buzzwords. Even made some up.
  8. 8. FUTURELAB 22/06/2017 8. My pain And finally the future is here!
  9. 9. FUTURELAB 22/06/2017 9. Silly Question What is this?
  10. 10. FUTURELAB 22/06/2017 10. The future is here My car can drive itself
  11. 11. FUTURELAB 22/06/2017 11. The future is here Marty McFly would be happy with these
  12. 12. FUTURELAB App scans car ads to generate car loan quotes There is an app for everything, even loan quotes The future is here
  13. 13. FUTURELAB 22/06/2017 13. My pain What is next – pre-cog delivery?
  14. 14. FUTURELAB 22/06/2017 14. Challenge But... is this what I wanted?
  15. 15. FUTURELAB 22/06/2017 15. Challenge But... is this what I wanted?
  16. 16. FUTURELAB 22/06/2017 16. Challenge What do you tell a shopkeeper in Cuba?
  17. 17. FUTURELAB 22/06/2017 17 My pain This is madness!
  18. 18. FUTURELAB LowTech Affinity HighTech Affinity What Service? HowService? High ValueLow Value High Value High Tech Affinity Low Value High Tech Affinity High Value Low Tech Affinity Low Value Low Tech Affinity Service Design It all goes too fast We can’t keep up What we thought was not exactly true...
  19. 19. FUTURELAB 22/06/2017 19. It all goes too fast We become suspicious It’s a chatbot It’s a human!
  20. 20. FUTURELAB 22/06/2017 20. It all goes too fast We can’t manage … ???
  21. 21. FUTURELAB 22/06/2017 21 It all goes too fast As failures keep on piling up...
  22. 22. FUTURELAB 22/06/2017 22 It all goes too fast We have a serious trust crisis on our hands
  23. 23. FUTURELAB 22/06/2017 23 http://www.information-age.com It all goes too fast With financial industry taking the biggest hit... http://bankinnovation.net
  24. 24. FUTURELAB 22/06/2017 24. Challenge CEOs (and CFOs) have the toughest balancing act ever
  25. 25. FUTURELAB 22/06/2017 25. Question 2. How do you convince and align?
  26. 26. FUTURELAB 22/06/2017 26. Question 3. And with everyone running into the same direction...
  27. 27. FUTURELAB 22/06/2017 27. Question 3. ...How DO you differentiate?
  28. 28. FUTURELAB So… what about that “human-centric” approach? Answering the difficult question 22/06/2017 28.
  29. 29. FUTURELAB 1. Design tech around people, not people around tech 2. Put the customer back into financial conversation 3. You have (human) assets – use them I have a variety of solutions, but will limit this presentation Three main ways to human-centric technology
  30. 30. FUTURELAB 1. Design tech around people, not people around tech 2. Put the customer back into financial conversation 3. You have (human) assets – use them I have a variety of solutions, but will limit this presentation Three main ways to human-centric technology
  31. 31. FUTURELAB 3122/06/2017 Solution One The experience counts at every step of the journey
  32. 32. FUTURELAB Customer Experience Management Is about managing emotions at each step of the journey
  33. 33. FUTURELAB This can provide you with a radically new perspective Case: An Automotive Brand Pre-sales Sales After Sales The Traditional Perspective Search Evaluate Try Select Wait Search*** *** *** *** * * * = Confidential 22/06/2017 33 The Customer’s Reality
  34. 34. THECUSTOMERPERSPECTIVE Case: Lexus Use advanced DB management to create delight moments Lexi the dog
  35. 35. Case: Touring Immediate policy after payment to eliminate stress Am I insured? I did pay for it…
  36. 36. 22/06/2017 36 Case: ING After news about a sad event, send an agent with pre-filled docs Please accept our condolences
  37. 37. FUTURELAB (cc) miguelb Who decides on the layout of the customer invoices? Real life case: what can you contribute?
  38. 38. FUTURELAB 1. Build your tech around emotion. 2. Manage every step of the journey. 3. Tech should help going through the steps easier, not harder. I have a variety of solutions, but will limit this presentation Design tech around people, not people around tech
  39. 39. FUTURELAB 1. Design tech around people, not people around tech 2. Put the customer back into financial conversation 3. You have (human assets) – use them I have a variety of solutions, but will limit this presentation Three main ways to human-centric technology
  40. 40. The problem I have always had with customer experience thinking Being human-centric is NOT about the fluffy stuff “Let’s spread love & hug” “Let’s be like Disneyland”“Let’s go WOOOOOWW!!” FUTURELAB
  41. 41. “Why should I allocate precious budget to experience?” It is about hard cash. FUTURELAB
  42. 42.  spend more  negotiate less  stay longer as customers  are more open to upselling  are easier to service  upgrade quicker  are ready to refer to others  increase staff morale  etc. Customers who are so happy that they recommend... Experience is about making money You know it very well: human emotion = money
  43. 43. Personal experience in 15 industries … and counting 5:1 The worst I’ve ever seen 6000:1The best I’ve ever seen FUTURELAB Experience is about making money Happy customers are most profitable
  44. 44. Human happiness… do you spell it with € or €€? Why focus on Customer Experience? Suddenly every executive likes customer experience FUTURELAB
  45. 45. FUTURELAB Customer Value Word-of-mouth effect (+/-) Total Customer Value Promoter 9-10 Detractor 0-1-2-3-4-5-6 Passive 7-8 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ FUTURELAB How to build a (simple) business case Let’s calculate • Car margin € 1.000 • Average life: 5 years • Avg. service visit margin: € 50 # Purchases over life time Purchase margin of car Value service visits over life time Value
  46. 46. FUTURELAB # Purchases over life time Customer Value Purchase margin of car Word-of-mouth effect (+/-) Total Customer Value Promoter 9-10 Detractor 0-1-2-3-4-5-6 Passive 7-8 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ 1 € 1.000 € 200 2 € 2.000 € 500 4 € 4.000 € 1.000 € 1.200 € 2.500 € 5.000 Value service visits over life time FUTURELAB How to build a (simple) business case Let’s calculate • Car margin € 1.000 • Average life: 5 years • Avg. service visit margin: € 50 Value
  47. 47. FUTURELAB Word of Mouth Impact at a Global Luxury Car Brand How many customers did you stop from choosing us? How many customers did you bring us? 1 4
  48. 48. FUTURELAB # Purchases over life time Value service visits over life time Customer Value Purchase margin of car Word-of-mouth effect (+/-) Total Customer Value Promoter 9-10 Detractor 0-1-2-3-4-5-6 Passive 7-8 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ 1 € 1.000 € 200 2 € 2.000 € 500 4 € 4.000 € 1.000 € 1.200 € 2.500 € 5.000 € -2.500 € 0 € 10.000 € -1.300 € 2.500 € 15.000 FUTURELAB How to build a (simple) business case Let’s calculate • Car margin € 1.000 • Average life: 5 years • Avg. service visit margin: € 50
  49. 49. FUTURELAB 22/06/2017 50 Case: Vodafone Calculate CLV to prevent churn of valuable customers
  50. 50. FUTURELAB Calculate CLV to know how much to invest Recommends to 5 people Convinces 1.9 potentials CLV (incl. WoM): €12,146 Detracts to 3 people Keeps out 1.5 potentials CLV: -€ 8,521 Talks to 3.2 people Change minds of 0.75 potentials CLV: €4,588 Personal bank CLV calculation
  51. 51. I approve of this message Why focus on Customer Experience? Because it makes money. FUTURELAB
  52. 52. FUTURELAB 1. Make a business case for customer delight 2. Calculate how much profit word of mouth brings to you 3. Prioritise investment into moments of high emotion = word of mouth: reduce negative, build on positive I have a variety of solutions, but will limit this presentation Put the customer back into financial conversation
  53. 53. FUTURELAB 1. Design tech around people, not people around tech 2. Put the customer back into financial conversation 3. You have (human) assets – use them I have a variety of solutions, but will limit this presentation Three main ways to human-centric technology
  54. 54. FUTURELAB 33% 61% 55% 51% 2003 2004 2005 2006 A person like yourself or a peer Edelman Trust Barometer 2006When forming an opinion of a company, how credible would the information be from … % Academic 62 Doctor or similar 62 Person like yourself/peer 61 Financial Analyst 58 NGO Rep 58 Accountant 53 Lawyer 36 Regular employee 33 CEO 29 Union 19 Entertainer 17 PR person 16 Blogger 15An extract from our old report People used to trust their peers more than advisors...
  55. 55. FUTURELAB Source % In-store Sales Associate 49 In-store demonstration 36 Word-of-mouth from family & friends 33 Newspaper Coupons 25 Internet 21 Product/Company Information 16 Retailer information 14 Other 14 Magazines 4 TV 4 Radio 3 Source: CMO Council’s Retail Fluency Report, 2005 Most influential information sources in purchasing electronic goods? (TOP 3) An extract from our old report And much more than the media... 2006
  56. 56. 22/06/2017 57 New data has come in In 2017 a peer is the ONLY credible source left. 2017
  57. 57. FUTURELAB They won’t even trust you (let alone or your CEO)… 22/06/2017 58. But they will trust your employees
  58. 58. FUTURELAB Paleolithic (stone) age “hunter- gatherer” -2,000,000 -3000 Copper tools Industrial revolution -300 Information Age -50 Because 3000 years of technology cannot undo 2,000,000 of hardwiring TRIBAL – VERBAL – DISTRUST OF BIG TRIBES But why?
  59. 59. 22/06/2017 60 Your people Your knowledge Your fans Solution 3 What assets can you use?
  60. 60. Use your people Your employees influence your business massively Would you recommend the bank to friends /family? 32% No 28% conditionally Would you recommend the bank as an employer? 39% No 30% Yes N=25,000 (out of 59,000) FUTURELAB
  61. 61. FUTURELAB “you know what those idiots did at work”? FUTURELAB Use your people Would your people recommend? Act? 1 employee 1st degree: 150 2nd degree: 22,500
  62. 62. FUTURELAB Knowledge is understanding what they REALLY care about You HAVE the data
  63. 63. FUTURELAB 22/06/2017 64 Use your knowledge Some of your customers LOVE tech. Others don’t. I value relationships. I love my bank agent. I will always prefer going to the branch to opening an app. I don’t have time to talk. I will always prefer digital tools to meetings or phone calls. Case: Personal banking
  64. 64. FUTURELAB 22/06/2017 65. Breakthroughs that tech can only help to deliver Use your knowledge
  65. 65. FUTURELAB If it doesn’t spread … it’s dead. Use your fans
  66. 66. FUTURELAB Are you likely to recommend? YES !! Do you actually recommend? WELL... THE ACTIVATION CHALLENGE What goes wrong ? 22/06/2017 67 Use your fans Do you know if they really talk? To how many?
  67. 67. FUTURELAB 22/06/2017 68 Help spread the word Give stories to tell Give tools to foster relationships Use your fans Each persona has their own strength
  68. 68. FUTURELAB Calculate CLV to know how much to invest Recommends to 5 people Convinces 1.9 potentials CLV (incl. WoM): €12,146 Detracts to 3 people Keeps out 1.5 potentials CLV: -€ 8,521 Talks to 3.2 people Change minds of 0.75 potentials CLV: €4,588 Personal bank CLV calculation
  69. 69. FUTURELAB FUTURELAB Let them tell your story Case: if Insurance (Finland) FUTURELAB 852 customers available 9 AM to 8PM for phone conversations (and outside of those hours online) with customers thinking to join the company.
  70. 70. FUTURELAB 1. Make sure your employees are happy, and empower them do their job in making customers happy 2. Use your data and knowledge to create better experiences 3. Leverage your existing relationships: use your promoters I have a variety of solutions, but will limit this presentation You have assets – use them
  71. 71. FUTURELAB Are you realizing the full potential of your customer relations? Questions- want this presentation? sko@futurelab.net
  72. 72. FUTURELAB http://tinyurl.com/65969kg Available via YOUR FREE E-BOOK DOWNLOAD ON: @FLB_StefanKolle www.futurelab.net

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