High five for 5G

The new service, the speedy 5G connection, is already out in the US as a pre-standard network by Verizon. However, standards-based networks of both Verizon and AT&T are so close to launching that we can already call 2018 a breakthrough year for the technology. 5G-capable smartphones from Samsung and other vendors (not Apple, though) are also in the pipeline for next year.

The EU takes a slower approach but it has just accepted new measures that would help the rollout of 5G in Europe. Industry body GSMA estimates 1.3bn 5G-connections by 2025, covering 40% of the world’s population. When in full swing, the new networks will allow for the rise of IoT and faster and safer connections to everyone.

Robos Rising

We’ve seen the robots before but never in such an abundance. Chatbots flooded the whole internet, taking over simpler customer service tasks, answering plain questions and, in case of more complex queries, they redirect the visitor to a human assistant. And those are only the robots hiding behind websites and only showing a set of characters of themselves.

Others get a physical body and come out to the limelight, though. SoftBank Robotics’ humanoid robot named Pepper made its first appearance already in 2014 but it has grown up: it now responds to human emotions and can answer questions about products or services. Two of its German versions, Luna and Monaco Pepper, take their role one step further. They have a permanent home in one of Bremen’s Sparkasse bank branches and keep regular contact with clients. They can even tell jokes! But, in the hindsight, there is more than that: by learning every day, they have the potential to take over more complex tasks as well.

Artificial or Virtual, Both a Reality Already

Smart glasses creating an augmented reality (AR) have found their way to the offices this year. At the Consumer Electronics Week in the summer in New York, ThirdEye Gen presented its X1 glasses: workers who wear them in the office can make remote colleagues see exactly what they see. These advantages can also be translated into serious savings in operational costs: according to Forbes’ report, as much as 40% can be achieved using AR or VR-technology in certain industries. One of the businesses in the know, French banking giant BNP Paribas, has also announced the rollout of a VR-based app and a set of new services for its retail customers last year. It allows the clients to manage their accounts in a different way or make decisions easier but it also allows the bank to create a new type of operation.

Foldable phones

California-based Royole and Samsung announced their own foldable mobile phone models almost simultaneously. Both can transform into tablets when unfolded – arguably the most genuine announcements this year. Creating a totally new product category, it has the potential to create a new definition of work as well.

Royole’s Flexpai phone, when folded, works as a dual screen with both screens operating independently or in interaction with each other as needed. It works on the Flexpai+ platform that can be integrated into other devices or applications as well, giving the California startup quite a growth potential. Meanwhile, Samsung has also presented its foldable phone, though only available commercially from 2019. The company calls the display technology Infinity Flex Display and Android has already announced to support it.

Hybrids Going One Step Further

Lenovo didn’t sit on its laurels, either, and came up with an innovation in the laptop-tablet hybrid category. The Yoga Book C930, presented at the IFA trade show in Berlin this year, has dual-screen with a 10.8-inch size, with the secondary display being an e-ink one that can also morph into a virtual keyboard. Actually, this second screen has three functions: keyboard, notepad, and e-reader. The first screen is a Windows-based regular display. Despite the many features of the device, Lenovo might still have a hard time selling it given the non-exceptional nature of either function but it is still an interesting product worth mentioning.  

AI in CRM

AI being the winning technology in the field is a claim also made by CRM market leader Salesforce and IDC, based on a recent joint study. According to them, 28% of the respondent companies already have AI in place, while 41% plan to have it in the next two years.

Salesforce itself has upgraded its Einstein software this year, giving it a new feature that integrates customer service tasks in the regular service offering and allows Einstein to handle routine requests building on customer history, natural language processing, and machine learning. one of the other major announcements of this summer was Microsoft committing to AI-based analytics. The tools to provide this experience include chatbots, predictive lead scoring based on communication traffic patterns, and automated welcome emails, among others.

Newcomers to the market already have AI in their initial offerings and investors are keen to support such projects. One of the latest announcements is of Spiro Technologies that claims downright the title of “the first AI-powered CRM”: it has raised USD 1.5mn in seed funding that will be used to add even more AI features to the product.

Fast Finance with Apps

Let’s not forget about mobile app innovations, some true delicacies for an enterprise mobility vendor like us. Our favorite this year was also awarded a Mobie Award by Enterprise Mobility Exchange as the most effective mobile app integration: financing solution specialist DLL’s Express Finance. It is a sales tool that helps sales reps quote financing payments to customers, a complex task with many scenarios with a process that is just as confusing for the clients as it is for the sales workers.

The new app, Express Finance, is a user-facing app that simplified the pricing process by offering a real-time pricing service, proposal generation, and POS closings. The reps can find all the relevant information they need to quote a payment in the app, no other information source needed. As a result, they managed to achieve a 90% reduction in their time-to-quote rates. DLL calls it an amazing success and it’s hard to think otherwise – we are glad to see the direction enterprise app development is going!

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Combination, not Competition

As a consequence of technological advancement, there is a growing concern among financial advice professionals that the need for their services will disappear, too, and they will become redundant amidst the rise of the robo-advisers.

While technological development did make several jobs disappear in several industries, it has always hit lower-level jobs harder and sectors that were unable to transform themselves. On the other hand, the winning strategy has been that of a reinvented business model. As market financial market consulting firm Aite puts it: “there is a shift from a product-based business model to an advice-based one.”

Forward-thinking organizations are already thriving right now on a healthy mix of technology (automation) and human services. They realized that such a mix can bridge the gap between generation demands (being customer-focused never gets old) and compensate for otherwise eroding margins caused by fintech disruption. They have understood that there will always be a market for transactional-only services and they can only lose if they try to compete it. The keyword is a combination, not competition.

It is also interesting to note that, while the financial advisors currently working on the market are anxious about technology taking over or taking most of their income at the very least, those studying right now to become advisors have other concerns. Poor public perception of the profession, low entry-level wages, and gender inequality are on the top of the list, while technology is not a major factor in making career choices. At the end of the day, most advisor students also found helping people and working in a dynamic industry more appealing than earning (38%, 34%, and 30% respectively).

When the Robots (Should) Give Financial Advice

As clients increasingly want instant answers to their questions and convenient online access round the clock, it is inevitable that robo-advisors take over some of the tasks. If you add to that technology bringing a new type of trust through transparency (crucial in engaging the younger generation), it is easy to see why the industry tends towards implementing the so-called hybrid model. Different services offered on different channels result in cost savings as well that can counterbalance the eroding margins in the field.

Here are some of the (mainly transactional) services that, when automated, can create more value, especially for the younger generation and the mass-affluent client base, and in an evolving market:

• Helping clients open an account
• Perform simple tasks such as money transfer
• Data aggregation
• Recommend general investment or saving opportunities based on algorithms

When the Humans (Should) Give Financial Advice

In a customer-focused, advice-based operating model, the financial advisors have a well-defined role that builds on the strengths that only humans can possess. Empathy, emotional and social intelligence, the ability to adjust insights to complex events are just some of these traits.

A human advisor is able to build relationships with the clients that includes not only the management of their money but the care about the clients’ well-being – financially, but also emotionally, such as a therapist. When the sailing is not so smooth, the market is sluggish, the client is experiencing a new life situation, a good advisor not only recommends new products but gives advanced insight using all the information about the client and guides them through uncertainties. So the work will become more complex, but also more rewarding, and specialty expertise will be in high demand.

Let’s see some of the tasks that the new advisor role entails:

• Educate the clients based on their best interests
• Plan according to complex life situations, sudden events, prioritize goals
• Resolve complex issues and investment situations, like tricky deals
• Sell advanced insight using information about the client’s spending habits outside of the investments
• Effectively protect client information

While the financial advisors of today and tomorrow have to build on their emotional capabilities as humans, they also have to be comfortable using technology without competing it. Remember the holistic approach: combination, not competition.

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How Big is Big?

We all sense that the more digitalization spreads and the more parties are involved, the more data is being created, but if you want to see numbers supporting this feeling: IDC says we’ll have 163 zettabytes by 2025. It’s a ten-fold increase from where we are at now, with enterprises having a 60% share of the pie. It should come as no surprise that the financial services industry is producing data as intensively as few. Hundreds of billions of transactions every day and the regulatory requirements to keep the information on those transactions accessible results in a huge amount of the above-mentioned data.

Investments in Big Data in financial services, including the management and analysis of data assets, are estimated to reach USD 9bn in 2018 by SNS Telecom & IT and grow with a 17% CAGR in the next three years. According to IDC, banking is one of the industries that will spend the most on big data and business analytics solutions. However, the reason behind spending so much is also clear by looking at the revenue numbers: the USD 149bn recorded in 2017 is predicted to almost double in five years, to USD 260bn.

How Useful is Big?

The problem is, most of the data collected at the businesses remain so: collected but never analyzed. We can only hope that the situation has improved since 2016 when Forrester reported that 60-73% of the data in an organization goes completely unused. But it’s an untapped treasure trove and not only (directly) for more revenues. The analytics help enterprises grow customer engagement and come up with new products that meet customer demand: values that are essentials for today’s businesses. A report by Dresdner Advisory Services from 2017 paints a better picture already, claiming that 53% of the enterprises are using big data analytics, with the telecom and financial services sector being the fastest to adopt the new technology.

Use It for Customers’ Delight

So leveraging big data analytics is THE way forward for financial services as well. But what exactly are the best practices in this field? Success in the current business environment will not come without understanding your clients. Financial services providers should also focus on better serving their customers, especially when the whole industry is being disrupted by newcomers that build everything on this principle. From a data perspective, the bottom line is to collect data that is clean and secure to use and work your way from there to delight your customers through analytics.

The client’s behavior will give many hints for what kind of marketing activities would hit the target with them, makes credit assessment easier, as well as fraud detection. New user behaviors lead companies to innovate, for example, to create new trading solutions like High-Frequency Trading (HFT), where data algorithms search for trading opportunities and make the decisions, with or without human interaction.

Areas to explore

If the customer is driving our business decisions, the first thing is to find out what he or she really wants. Banks might have a hard time adjusting to this perspective, with smaller ones being better at it, but precision targeting is something neither of them can ignore. Bigger banks can also involve third-parties to help with the targeted marketing and sales efforts.

By analyzing the available data on customer behavior, e.g. saving and spending habits, financial institutions can make smart recommendations on products that are a good fit. Big data also allows to more precise risk assessment and that could mean more credit products to be sold without increasing the lending institution’s risks.

Activities that require personal interaction, such as a consulting session, can also profit from this type of big data usage, as the consultants can already have the targeted recommendations at hand when they meet the client. What is more, analyzing the consultant’s behavior is also beneficial in performance and resource management.

The many subsectors of the insurance industry are to profit mainly from the risk management capabilities of the new technology. Assessments made by big data analytics are transforming car insurance and health insurance, enabling the insurers to effectively reward safe and preventive behaviors. Such an analysis is capable of reducing costs on both the insurer and the customer side.

Ultimately, big data should lead financial services to a future where they can engage their customers through personal, local, and real-time services.

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Microsoft

October began with a series of new announcements from Microsoft concerning the Surface laptop product line. The device boldly named Laptop got an upgrade, so Laptop 2 comes with an 8th generation quad-core processor and a longer battery life. The Pro 6, the laptop-tablet hybrid, is also equipped with an 8th-gen Intel processor and claims to keep going for 13.5 hours while still remaining lightweight. However, the USB-C ports missed by many in the previous years are, well, still missing.

What are the business advantages?

No huge changes or fireworks here, but the latest generation of processors does provide an even more seamless work experience. Both the processor and the keyboard allow the devices to operate silently – no small feat for the office! And the longer battery hours make it a reliable slate throughout the workday.

Apple

The end of October has seen Apple taking it up another level with its hardware keynote on the new MacBook Air. The most awaited announcement was that about the ever-popular MacBook Air coming to life again. The 13.3-inch Retina display is thinner and more accurate, the keyboard is more precise and responsive, and is more resistant to dust. The touchpad finally dropped the click function and now supports Force Touch instead. There is also a fingerprint-management function by Apple’s own T2 security chip. Tablets are not gone either, apparently, seeing the iPad Pro has also got an update, along with the Apple Pencil, both business favorites. The novelties iPad Pro has to offer, include Face ID, an A12X processor providing better AR and gaming experiences, and it also magnetically charges the Apple Pen.

What are the business advantages?

Speaking about the MacBook Air, the security chip is a feature that makes a lot of sense in a business environment, but the new display is also something that has long been on the wishlist for corporate users. It should be a bottom line that the battery doesn’t have to be charged for 8 hours and that the laptop is easy to carry around with its 1.24kg weight.

Google

October was busy for Google too, as it announced the new Pixel Slate, among other hardware innovations. Pixel Slate is the first to feature Chrome operating system on a tablet, further enhancing the tablet vs Chromebook feel and clearly giving a Microsoft a run for their money with Surface. It also has a split-screen option and the Chrome browser really shines when compared to even a PC environment. Keyboard and pen are sold separately, though, and the price of the total set (approaching the $1,000 range) positions it at the higher end.

What are the business advantages?  

Other than the quietness and backlit keys of the keyboard that is sung by many, the Pixel Slate is closing the gap again between tablets and laptops. It’s arrangements of display and keyboard and cover make it more comfortably usable at a desk than on the lap, while still being light enough to carry.

Runner-ups

Next to the giants, there is also room for other companies, too, to present their hardware innovations. On the laptop and tablet front, large international tech gatherings, such as the IFA in Berlin, served as a background for them. In the laptop category, vendors like Lenovo, Dell or Acer all focused on creating the lightest devices possible experimenting with different alloys, while keeping performance on a high level by including 8th gen processors of all kinds. On the verge of categories, Lenovo’s Yoga Book has got an important upgrade: C930 has dual-screen with a 10.8-inch size, with the secondary display being an e-ink one that can also morph into a virtual keyboard. Arguably the most genuine announcements came from Flexpai and Samsung, almost simultaneously, about foldable phones that can be transformed into tablets when unfolded. Creating a totally new product category, it has the potential to create a new definition of work as well.

What are the business advantages?

As strong believers in doodling, the features of the new Yoga Book are impressive and make it a versatile business companion (although also a pricey one). On another note, Acer deservedly made headlines with its 15-inch laptops both weighing under one kilogram – now challenge that for portability!

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AI being the winning technology in the field is a claim also made by CRM market leader Salesforce and IDC, based on a recent joint study. The statement has proved just as well to be a safe bet: according to the study, 28% of the respondent companies already have AI in place, while 41% plan to have it in the next two years.

Salesforce is citing the ultimate argument of AI boosting businesses by USD 726bn extra revenue and USD 265bn of cost savings between 2017-2021, mainly through improvements in productivity and customer engagement. In total, that means a USD 1.1tn of revenue boost.

Besides these convincing figures, recent acquisitions and investments in the AI marketplace by the likes of the largest CRM vendors have also pointed toward a bright future of artificial intelligence.

Make AI Listen, Analyse, and Speak

We love AI because it is capable of things we get soon bored of and accomplish those tasks 24/7. Whether it would be routine automation of conversations, analysis or insights, it is there, but it also enables the equal distribution of insights, faster decision-making, and pattern recognition by its collaboration features.

From the customers’ angle, it means “someone” is always there when they have a question as AI keeps early-stage consumers busy by talking and listening to them (see chatbots). Sometimes it simply handles claims, sometimes it qualifies leads from these conversations (even identify those who are eligible for certain discount), and generates them automatically in the CRM.

Some AI’s are even more intelligent or have learned enough along the way to be able to assess the highlights and pitfalls of the consumer journey. With such an analysis, companies can find the best workflow for conversions or see what content is the most successful (relevant). From that information, the AI can be programmed to run campaigns alone.

AI Use in CRMs Spreading Like Wildfire

The Big Five

Salesforce introduced its own Einstein in 2016 and has been heavily promoting its features ever since. Einstein is able to customize advertisements and recommendations, replace manual data entry, give customer insights, and prioritize leads, among others. But Salesforce doesn’t stop here: it has recently introduced a new feature that integrates customer service tasks in the regular service offering and allows Einstein to handle routine requests building on customer history, natural language processing, and machine learning, the official statement claims.

Salesforce and Microsoft have also made a deal with IBM to use their Watson technology for campaign automation, that includes automated messages on all available channels and gives a new type of insights for marketers. The users can collaborate better with sales by getting an overview of the strategies and find new ways to improve it.

In fact, one of the major announcements of this summer was Microsoft committing to AI-based analytics as something it believes will improve the life of the end user (i.e. the salesperson, the marketer, or the customer service agent) and not just the bosses reading the reports. The tools to provide this experience include chatbots, predictive lead scoring based on communication traffic patterns, and automated welcome emails, among others.

For some time, Adobe has also been on the market with its AI-based API, Sensei, that allows the creative professionals to be more efficient and insightful. Sensei’s specialty is to analyze images and animations, recognize their aesthetics, but it can also define the sentiment of other documents if needed. In a recent effort to extend Sensei’s reach within the developer community and to improve the performance of the AI tool, Adobe further committed to its partnership with hardware maker NVidia. Lip sync, face awareness, or auto-tagging are some of the features to be developed further.

Improving operational efficiency and predictive insights is also in the focus for SAP that has its own AI-based assistant, Leonardo. Named after renaissance hero Da Vinci, the tool combines (since last year) artificial-intelligence with IoT, analytics, the blockchain, and machine learning, to accelerate digital transformation for businesses. Leonardo is now used to find business problems within an organization and is then able to compare it with an industry-specific database and define the technologies and methods to solve them. SAP takes pride in data safety as well, as it gives users the opportunity to utilize data that is at their own premises, in the systems used every day.

Smaller Scale, Bigger Dreams

All of the above is just the surface of what is happening in the CRM space right now. Public announcements of AI-enhanced software are coming out every week, showing the smaller players are just as well aware of the direction they should take.

It might very well worth it, as the example of Pegasystems shows, that has just been named the market leader of customer engagement by analyst firm Ovum mostly because of its AI capabilities.

Zoho has also announced an upgrade to its Zoho One suite, by extending Zia, the AI assistant’s services to the whole cloud platform. Zia was first introduced as a feature of Zoho CRM only and to help sales reps with suggestions based on client data.

Newcomers to the market already have AI in their initial offerings and investors are keen to support such projects. One of the latest announcements is of Spiro Technologies that claims downright the title of “the first AI-powered CRM”: it has raised USD 1.5mn in seed funding that will be used to add even more AI features to the product.

The trust in the increasing demand from the consumer side that requires the latest technology to stay ahead of the competition also makes CRM vendors try to meet the clients halfway by adding third-party AI-services into their offerings.

The selection they can choose from is impressive already: according to Get CRM’s recent compilation, AI providers have targeted at least 15 business functions with their technology. Speech analytics, for example from Cogito or Uniphore’s Akeira, is one field with a great potential, allowing companies to optimize call outcomes with real-time guidance or improve call resolution rates for service centers.

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1. Draw blueprint drafts and technical details

An obvious use of a mobile device with a digital pen is to draft or sketch blueprints and technical details while out and about, even when in front of a client. The user has to be neither an engineer nor an artist: unlike in maintenance or technical design, the sketches serve only the purpose of telling a story, not to be a measure. However great work your sales enablement team is doing, there can be times when the rep is not equipped with the blueprints and detailed designs he or she needs. But expertise and some drawing skills are there to move the deadlock.

2. Sketch processes

Especially in B2B selling, reps need to present complex processes that lead to the solution the client requested. However, the complex nature of these processes require a complex explanation and that is sometimes too much for the other party – not to mention the important details that can be lost meanwhile. In order to make things easier, reps have a great tool at their disposal. They can make a quick sketch of the process they are talking about at any point in the presentation! Prospective clients will also feel unique as the meeting notes come with handwritten sketches, made only for them and following their own requests.

3. Highlight important points

Personal conversations are invaluable but so much can be lost while talking. By highlighting (underlining, circling, etc.) important points of a presentation or a product documentation, salespeople can make sure the agent will have the most important messages delivered even when forwarding the materials later to the client. Reps themselves might find it useful as well to get a quick overview of the points they need to act on.

4. Make presentations complete

Presentations are mostly known as the boring variations of stories. Surprises, on the other hand, will help get the attention of the audience. They come in many shapes and forms but sketches are certainly among them. So how to show the client that an agent is listening to them? By drawing and writing missing information in the presentation during the meeting, it is more than obvious that the agent listens and makes an effort to add even more relevant details to what is being told.

5. Take handwritten notes

Handwriting is more comfortable for many than typing and, therefore, can be quicker. But there is another aspect of handwritten notes: it suggests a higher level of authenticity, so it is great for building trust with clients. You should never underestimate the power of trust: the average sales cycle has gotten longer in the recent years and it has been paired with a growing skepticism from the part of the prospective buyer. The only thing that is able to speed up the process now risk-free is trust, and any tool that helps build it should be honored and nurtured.

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Pushing consumers first

Consumer-oriented trade shows like CES always play a huge role in introducing or pushing new technologies, no matter how strange they may seem at first. The most recent giant show, CES Asia, was held at the end of June and didn’t fail to paint a colorful picture of futuristic consumer technology.

Putting aside pure entertainment and cutting-edge weirdness, the robots tended to show up everywhere and in such forms that promote their mainstream use. In a world depicted by the event, consumers would be surrounded by flying cars, live in a fully connected smart home that is served by automation, be it VEDAs or IoT.

So far they are just the buzzwords we know so well. What’s more interesting is that vendors have been relentlessly pushing virtual reality and augmented reality (VR and AR) solutions and have even indicated that these could be deployed by business earlier than consumers – a phenomenon that would be unique on its own.

Professional skepticism aside

VR and AR are mostly known as the technologies that require freaky-looking glasses and a lot of patience on the user side. So how come they can make business sense already?

For one, those glasses are not in the way of work as much as they would in everyday activities. Seeing models what they would look in real life gives engineers an advantage they would trade for comfort. Remote workers of all kinds can benefit from sharing the glass screens with their colleagues.

These advantages can also be translated into serious savings in operational costs: according to Forbes’ report, as much as 40% can be achieved using VR-technology in certain industries. While we don’t have an exact figure for the financial industry at hand, the number of announcements and reports that tackle the topic indicates banks and insurers have also had some early success digging the gold of the new reality.

What VR and AR Have in Stock for the Financial Services Industry?

The insurance industry is one of the early adopters of technology, mainly in simulations and training. Car crashes, breakdowns, or even the onboarding of staff can be great opportunities to use VR. According to a fresh report by KMPG, the adoption rates are expected to increase significantly as the awareness spreads and the technology becomes more sophisticated.

More interestingly, though, VR and AR presents a different kind of opportunity as well for the insurers: namely developing new products that assess the risks of the mass use of these technologies (accidents, security risks, privacy abuse, etc.) KPMG estimates the losses to be covered can reach USD 20bn.

Other financial service providers, such as banks and credit institutions, are sitting on valuable data reserves that require analysis, preferably one that is quick to make and easy to interpret. CitiBank has been experimenting with a holographic workstation for upgrading its trading services, while Wells Fargo is onto creating a virtual space, a branch substitute if you like, where clients and agents can interact, and Comarch of Poland also helps its clients in communicating in an augmented environment.  

French banking giant BNP Paribas has also announced the rollout of a VR-based app and a set of new services for its retail customers last year. It allows the clients to manage their accounts in a different way or make decisions easier but it also allows the bank to create a new type of operation.

Payment processing is another field where banks and payment services companies are motivated to introduce the new technology. Worldpay has virtual terminals for smaller and AirPIN for bigger purchases, both representing a new generation of payments that customers demand and will ultimately engage with. Payscout, on the other hand, has a virtual environment where clients are able to buy physical goods with Visa Checkout and also has a virtual space for donations.

The most talk in the financial services industry is about whether virtual spaces can substitute bank branches in the long term. With the appearance of digital-only banks and mobile banking, the question is timely and the saving potential is enormous. Financial institutions are looking for feasible solutions for sure, yet they are cautious not to turn customer sentiment into negative. By all means, consumer awareness of AR/VR and its engagement capabilities (banking in a nice, easy-to-use virtual environment versus a crappy branch not so nearby) is something to trust.  

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Local Laws Caught Up

The European countries have had hard times of adjusting their national legislation to the directive by the deadline set for them, thus July 1, 2018. However, the CEE caught up the best with three of the five countries that have communicated full transposition by May 24, 2018.

Belgium, Germany, and Lithuania have partially communicated its readiness, although Germany was considered the first to approve the legislation changes locally. In the rest of the countries, the legislation mostly went underway, too, and only waits for a communication in the official national journals.

One of the last countries to implement the IDD was Italy but even they published the necessary changes to their laws in mid-June. Meanwhile, insurance supervision authority IVASS has launched public consultations for the further development of the rules to prepare for the secondary level legislation changes.

Despite the Brexit hassle, UK also managed, albeit sluggishly, to close the procedure, as it transposed the directive in local law at the end of May. Nonetheless, UK Financial Conduct Authority (FCA) claimed many firms are prepared for the new regulation ahead of the final October deadline and in the latest edition of its handbook promoted an early adoption of legal requirements.

What Practice Makes You Compliant?

The IDD would like to enforce the rights of the customers on an EU-level to receive the same complete information package about an insurance product, including agent fees (that is also the most discussed part of the regulation), regardless of the sales channel. Also, the European Union would like to establish a detailed rule of the requirements necessary for the work of agents and distributors and to create a standard regulation for life and non-life insurance products.

Getting more practical, the European Insurance and Occupational Pensions Authority (EIOPA) has issued detailed guidelines regarding “execution-only” sales or telephone and online sales, a territory most in need of regulation.

The guidelines help assess what products fall into the category of insurance-based investment product and if they are difficult for the customer to understand. Such products pose a risk of buying before reaching readiness and, therefore, should be excluded from phone or online selling, where no advising activities occur, in order to minimize the risk of customer detriment and misselling.

Insurance Distributors Have Launched the Race

Forward-thinking insurance distributors have already prepared their own solutions and they turn to technology to lead the way out of the regulatory chaos.

One of the first products already on the market with compliance with IDD in mind is the new consulting software of insurance group Die Bayerische, called BayRat. The software, developed in partnership with their own IT firm iS2, offers a step-by-step financial analysis starting with an assessment and followed by the creation of an individual concept and a specific consultation. In the end, the consumer gets a 100-page report (a substantial part of the directive is the obligation to provide a standardized and straightforward documentation about the insurance product) and with the agent, they are able to find a tailored solution.

Targeting Millennials is a new challenge that insurers need to tackle but that effort can be aligned with regulatory compliance, Coya’s example shows. The Germany-based insurtech startup, that has recently got a funding of USD 30mn, aims to enter the market with a product that ditches the old practices of neverending paperwork and impersonality of client treatment. By digitalization, effectiveness will live up to the effectiveness expectations of the Millennial generation. Also, the transparency and clarity that generation demands luckily coincides with the requirements of the new regulations like IDD and GDPR.

Even professional associations think IDD is a great opportunity to present a new approach, this time to collaboration. Two financial advisory associations in the Czech Republic, USF, and AFIZ have decided to join forces and establish the Czech Association of Financial Advice and Mediation (ČASF), to improve the conditions for discussions about regulations such as the IDD and promote self-regulation and customer protection. The strongest representation of insurers to date brings 27 market players to the same platform, including Broker Consulting, Fincentrum, OVB Allfinanz, and Swiss Life Select.  

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When above all that a new regulation appears on the market, many sales leaders tend to think that it is only another nuisance they have to comply with. In other cases, they might think it is none of their business after all. However, a significant part of the regulations are created as a reaction to changing demand, and no sales leader can ignore these changes.

For example, the freshest version of the European Payment Services Directive, or PSD2, in effect since January 2018, reacts to the demand of financial services customers who want to take advantage of the single market by using even more and more secure services. They expect the service providers to increase transparency and give the control of user data into the users’ hand.

The most important consequence of implementing PSD2 was that it cleared the way to the so-called Account Information Services Providers (AISPs) and Payment Information Service Providers (PISPs). These service providers connect the financial institutions and the clients as a third party and develop new solutions for the financial industry, mostly by offering an easy overview for the clients of their existing assets and credits at the different accounts in different institutions.

One of the primary goals of PSD2 is that these third parties that are handling sensitive data and offering services on the market anyway, were kept accountable and under stronger control. Already in January, many fintech startups registered as AISP or PISP, according to the directive. The most well-known aggregators are probably Consents Online and API-developer Truelayer but the list is growing almost by the day.

The new regulation also stimulates market competition among current and new players. Thanks to the new services, pricing structures, conditions lists, and the client management of different financial institutions are becoming more transparent. This is a call to action for the incumbents. Not only should they passively provide data or access to their systems but also develop innovative solutions.

What Does the Client Want?

Shortly after the publication of the directive, between February and June 2016, Accenture conducted a survey with the participation of 800 clients using online banking or payment services. The survey provides an important insight into the initial reactions of clients to the directive.

The analysis highlights three major factors: trusted brands are better accepted as AISPs, the different approach to the management of banking data and other personal data, and the fact that the age and the number of accounts are strongly correlated to the likeliness of trusting the new services.

Putting it simply:

• The clients expect mostly (65%) traditional banks as AISPs, and the trust in these institutions serves as a base for sharing other account information, but 40% would also trust well-known online retailers.
• However easily people share their personal data on different forums, they consider financial data more sensitive and, therefore, 70% would not trust them to a third party outside of the banking environment.
• The attitude towards AISPs is defined by several other factors as well. Interestingly, the more accounts someone has in different places, so there should be a motivation to use aggregators, the less likely they would try one. Attitudes are also characterized by age: 52% of those between 55-64 said they would not trust a third party, while only 15% of those between 18-24 years said the same.

How Should Banks Keep Up In This Competition?

As shown above, banks should not only the threat but also the opportunity in PSD2 as their established brands and the sense of trust that comes with it could be a perfect base for the implementation of new services.

The banks that go beyond passive data transfer to third parties and make an effort to develop new solutions within the redefined framework will be the winners of this game.

Such a new solution could be, for example, a functionality built in a mobile application that could map the client’s financial situation with the input of only one account number, suggest products, and create an opportunity for further planning. This could provide useful data not only for the client but also for the bank: how the client uses his or her assets at other institutions, what services does he or she use and how often.

How Does PSD2 Relate to the Sales Reps’ Job?

In creating the currently applied sales strategies, one fact played a major role: namely, that a particular financial service provider could only work based on their own data and some unconfirmed information shared by the client when providing assessment and personal financial management services.

However, digitalization, mobile devices, and other consumer services motivate clients to want to manage their financials in an easier, more transparent way. Addressing this new demand is a range of new technology companies entering the market every day.

In this environment, in-house retail banking sales reps have a huge opportunity literally at hand. Terminals and mobile devices are already in use at many financial institutions, and the applications installed on these devices are helping sales reps and clients to assess the current financial situation, the accessible services, and future planning.  

If these (mobile) applications have integrated aggregator functions, they can support the rep in every sales situation. When the client gives the green light to access his or her data (bank account numbers, the institution can see what financial assets he or she possesses, or what loans or other outstanding debts does the client have, and can even find data regarding other pieces of assets, such as real estate.

It doesn’t work without strong trust but also has its advantages for the client. The first step of the consultation, the assessment, will be significantly shorter, the client doesn’t have to fill out even a short form, the answers to the usual questions will automatically be extracted from the account data to the application. That flow of data can be controlled by both parties during the personal meeting. By automating that important step, the administration becomes faster.

An even bigger advantage of such a function is that it opens new horizons in personal financial management. Using the initial assessment as a starting point, an improved AISP is able to use, for example, with artificial intelligence, to use the gathered data for recognizing patterns and suggest solutions to the clients to reach their financial goals in the future while also reducing risks.

Prudent financial management has always included getting to know the client as much as possible, including exploring his or her financial situation, risk-tolerance, and other circumstances (family, health, etc.). Technology now gives an opportunity to do the same but supported by facts and data and presented in a way it is easy to overview and control for the client.

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The post PSD2: New Horizons in Personal Financial Management appeared first on Scolvo.

Voice Command Is Taking Over

Humans love to have their voices heard – you can see the proof in the ever-growing popularity of voice-enabled digital assistants or VEDAs. The likes of Siri, Alexa, and Cortana are invading the households. What’s more, they are effortlessly slipping through the “personal mental firewalls,” a phenomenon that surprised many opponents concerned about privacy issues.

Consumer technology that becomes so popular so soon always finds its way to the offices. Think about mobile devices, and you are only a step away from the thought of robotic assistance fighting for a cubicle. Putting it simply: they will come regardless of you liking it or not. Besides, you have to love what your customers want to stay competitive.

Don’t try to find counterarguments just yet. Accepting VEDAs to the workplace is a spectrum rather than a point in time. The question is, what’s your stance on that spectrum? Are you looking to replace all your sales reps with a cheaper alternative, are you entirely against robots, or are you trying to find a compromise?

Naturally, some industries and professions are more prone to such automation of workflows. Translation, customer service or logistics are the first to come to mind, but legal, medical, or educational professions are not safe, either. Plus, wherever administration occurs, voice-activated functions will appear and, well, take people’s jobs.

On the other hand, it is still a long way until they can accurately analyze a person’s tone and realize emotions. It is also a long way until human customers get so comfortable with robotic interactions that they don’t mind a non-human selling them something. Today, Capgemini data shows 20% thinks so, and it will grow to 31% by 2020. So until then? Let’s make friends!

Reps and Bots = BFF?

So voice-enabled digital assistance might as well be a beginning of a beautiful friendship, and not just based on commanding a shopping helper hidden in a speaker in the living room. After all, is it that bad if the new digital assistants do the dirty work and make sure all the data is in place or flowing in the right direction? The administration is something humans hardly ever enjoy and, besides, the strengths of our kind lies more in finding creative solutions.

Voice assistants can be the first line of contact and sales enablement can support them by providing the data for the initial communications and research. Further along the pipeline, human reps can take over and give the different quality of the connection. Remember, empathy, caring, or even competitiveness are emotional traits that have a big say in a deal, and they all belong to the human character.  

So reps don’t have to abandon their newly found BFFs even during a personal sales meeting with clients. When you integrate a VEDA into the mobile sales app, the whole experience changes for both the rep and the client and not as to exclude the agents.

The bottom line is that voice command function facilitates for example, the note-taking during and after the meeting when on the go, but if further developed by artificial intelligence, it can also “take part in the conversation,” and find out in the course of the meeting what materials it should present at which point.

Analytics and emotional intelligence: the digital assistants can analyze tons of data that helps the rep understand the client better and use his or her emotional judgment to find the right time and place to offer the right product.

Meanwhile, the personalization of VEDAs is an issue that you cannot ignore. Languages, accents, or “just” preferences and mental pathways are some of the things users expect their digital friends to recognize – sales reps are no exception. The best is when the sales reps know their way around programming: they can then make the voice assistant their partner and not their competitor.  

Integration: The Peace Treaty of Sales

The basis of the friendship between a rep and a VEDA is the proper integration of the artificial intelligence into the systems used. Speaking of sales, it goes without saying that CMS or CRM will be the top references and the data within these systems peculiarly clean. Other than that, the integration itself is not rocket science, and it is available for mobile apps, too – so reps can take their new friends with them wherever they go.  

You might want to develop your interface on the platform of Amazon, Apple, or Google, but integration is a more viable option you should consider. That is the starting point if you want to upgrade your mobile business application to the latest standards, and it only involves some particular API’s completed with the specific tools provided by your developers.

Essential voice assistant features for sales can be the following:

• Communication: Your VEDA will call, text or email anyone on the contact list
• Content: It mines the documents, presentations, images the rep needs
• Scheduling: Appointments, follow-up calls, conference attendances, report preparation times
• Navigation: Finds the way to and from meetings

For that, you will need some key technology like speech-to-text (STT) and text-to-speech (TTS). Furthermore, it can even have noise reduction and voice biometrics (to recognize the rep’s voice). We bet it will not be long until even more features become mainstream and VEDAs will be able to adjust their tones and languages to the user automatically or also develop their personalities.

No matter how artificial intelligence and voice assistance is all the rage these days, let’s not forget about conscious professionals to provide the right input for the technology and use the human creativity to find out more business cases where robots can add value.

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The post Can Siri and Co. Replace Your Sales Reps? appeared first on Scolvo.