Social Media In Financial Services Mike Linskey
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Social Media In Financial Services Mike Linskey
- 1. How the internet will drive the future of financial advice Mike Linskey
- 5. SOURCE: ONS
- 6. SOURCE: ONS
- 7. SOURCE: FACEBOOK, NOV 2009
- 12. How will financial advice work online?
- 17. Video courtesy of Finovate
- 18. BRYAN LINK CEO, Simplifi Exclusive to Social Media in Financial Services
- 19. My two new friends.... ...why don’t you get acquainted too?
- 23. Who’s got it right? Where you’ll find the Early Adopters
- 29. $1,000
- 49. Blending the old with the new...
- 54. You are about to poke Philip about saving for his holiday. He will be informed of this on his home page.
- 57. Stepping stones to a Golden Age
- 63. CLICK to download application form Sorry but you cannot purchase this item online. Please download the application form and send it to us along with a cheque for £15.99 Please use black ink. Your application will be rejected if you do not use black ink. Oh, and we need your passport, or your birth certificate. It’s a money laundering thing.
- 64. CLICK to download application form Sorry but you cannot purchase this item online. Please download the application form and send it to us along with a cheque for £15.99 Please use black ink. Your application will be rejected if you do not use black ink. Oh, and we need your passport, or your birth certificate. It’s a money laundering thing.
Editor's Notes
- Good afternoon, my name is Mike Linskey, and I’m not quite a geek! My company, Fincision, helps financial services firms to develop online propositions. We’ve worked on provider extranets, wrap platforms & fund supermarkets, designed award-winning financial planning tools, and recently helped Deutsche Bank redesign their trading screens. Personally, I have 25 years experience of financial services, and an unhealthy, some might say, abnormal interest in the internet.
- What a strange couple of years its been... Robert Peston and Fred Goodwin became household names, then Fred had to leave his, Quantitative Easing became the noughties way to describe a license to print money, and the City found something it was good at just in time for the 2012 Olympics – synchronised diving. And closer to home, it hasn’t been a great period for our financial technology partners: Capita’s Enabler project was disabled 1 st Software passed from pillar to post before being bought by the dark side. Funny to think that Lloyds Bank splashed out more to get hold of a license for Adviser Office than they did for the whole of HBOS – it must be fantastic software.... On a personal level, the credit crunch has been worse than a divorce – I’ve lost half of my assets and I’m still married.
- No better time to be in FS – its a perfect storm of opportunity Regulatory change – RDR, opportunities for IFAs & product providers Credit crunch – arguably ordinary people more aware on a daily basis of personal & national finances than at any time see WWII Behavioural changes – value is the new quality, we’re saving again, we’re being more prudent, we’re not taking on more debt (can’t get credit!) Technology is finally delivering – we’re at the tipping point where the internet, which didn’t exist 20 years ago (the internet as we know it today wasn’t created until 1991) is now embedded into our lives; its ubiquitous
- For the first time in decades, the mass market is saving again; there’s been a 5% rise in the household savings ratio during the worst recession on record Very latest figures from ONS (July – Sept 2009) show a savings ratio now at 8.6 per cent; this means the average household is saving almost £300 a month – the biggest amount in any quarter of British economic history. In total, households saved a record £21.4 billion in those three months alone. ‘ ordinary’ people have MORE money now? Mortgages gone down Cost of goods goes down VAT reduced
- 18.3 million households in the UK (70 per cent) have internet access. Sixty four per cent of all adults who were recent Internet users had purchased goods or services over the Internet in 2009. Of these, 83 per cent (26 million) had purchased within the last three months.
- Social media now mainstream. Fastest growing segment 30-50, then 50 200 million users spent 13.9 billion minutes between April 2008 & 2009 Half of Facebook’s users are in age range 26-54, the FS sweetspot In September 2009, 31.3 million Britons, which equates to 80 per cent of all Britons online, visited at least one of the top 75 social media sites. Facebook was by far the most popular site dominating 75 per cent of the total amount of time people spent on social networking sites. Nielsen Online estimates that Britons spent 11.1 billion minutes in total across the 75 most visited social media sites during this month alone. This is an 83 per cent increase on the time spent on these sites during the same month last year.
- Online, or offline, some things don’t change. Social networking doesn’t make you more interesting – you have to do that!
- Twitter – people want info ‘real-time’ But this is FS; people don’t do THAT online do they? comScore suggests that just over 37% of UK visitors to Twitter come from well off households. This compares to Google.co.uk's score of just 32%. Both sites managed to draw a higher proportion of wealthy households than the average internet site Britain’s 5.5m Twitter users More people using the net to research financial services & products Gartner: 6 th most popular reason people give for using internet Email top, porn 7 th
- I’m not going to say anything more about Facebook & Twitter; I’m sure you’ll hear plenty more over the next day and a half!
- Mobile is exploding as phones get smarter and data costs drop. And provided you’re not on O2, you might actually be able to access some of that data. Finance apps in appstore: 1800+ in UK. There's an app for that.
- Well, not quite, you can’t get an app that gives you financial advice - yet. How would Apple do FS – genius bar? scans what you've got, suggests more... Pandora, Last FM, Spotify So how will Fin advice work online....
- Meet the nation’s top financial adviser – The Independent 28/11/09 Almost 8m different people visited in July 2009 One Wednesday in November 2009: 1,127,474 visits (1,003,476)– ie different trips to the site 896,660 unique visitors (811,122) – ie different people in the day 4,057,623 page views The Forum alone is the seventh biggest social networking site in the UK
- His weekly email for example goes to over 3 million subscribers and generally has between 5 and 10 affiliate links. If each affiliate link earns a conservative £10.00 and even if he achieves a lowly 2% conversion rate, his email could earn him over £15 million annually. In 2005, he told the the Guardian thathis website was worth £30 – 40 million when it had 1 million monthly visitors. Today it has over 8 million visitors a month. Martin Lewis is a financial journalist, and has no financial qualifications or regulatory approval.
- What do these people really want? They want planning their long financial journey to be as easy as planning a road trip from London to Glasgow. They don’t want a map two weeks in advance, they want sat nav to give them directions in real time. finance done in 5 minutes (Aaron Patzer). Not about share of wallet – its share of attention. Thinking about finances is just one of many potential demands on my limited time, and frankly, there are far more pleasurable things competing for my eyeballs! FSA have got it wrong – consumers don’t want to be educated about finances, they just want to be told & do it! the online target demographic - 30-40 something married women with kids women are the key decision makers. Men think they are. Reality is men spend/ control only what’s left are the women has met the budet!
- Started in 2004 Just launched direct to consumer Free online financial planning & advice for middle class consumers North Carolina Less than 5% of americans have a financial plan Those that do 250% more likely to achieve their goals
- How should advisers approach online advice?
- I have two new friends. Get acquainted for some insight into where we’re headed next...
- Nudge economist Richard Thaler and legal scholar Cass Sunstein , show that by knowing how people think, we can design choice environments that make it easier for them to choose what is best for themselves, their families, and their society. Using colorful examples drawn from the realms of investing, organ donations, and marriage, Thaler and Sunstein demonstrate how thoughtful "choice architecture" can be established to nudge us in beneficial directions without restricting freedom of choice If you’re serious about embracing technology, you’ll read this on your Kindle, Nook, or iPhone. Paper is so yesterday... If you don’t know what Kindle or Nook is, ask Google or Bing. Thaler – informal adviser to Obama and Cameron
- Hunch – not a search engine, but a people-powered decision engine Researchers have documented how decisions made by diverse and independent groups of people are often superior to those made by individuals - even experts. The reason is that knowledge is often spread among many people. The challenge is to identify it, collect it, and effectively use it.
- Back to Financial Services...
- Recognise these two? Personal Finance Managers. Up until a few years ago, they used to compete on PC World’s shelves, but now there’s no sign of them. Intuit pulled its international version, and Microsoft abandoned Money altogether. Which makes it all the more strange that my first shining example of a company thats got it right is... ...a personal finance manager, but with a twist.
- Say Hi to Mint – an online PFM taking the US by storm 1M people a month – not bad for a start-up Does budgets, and more... The 5 minute rule
- Site does all the heavy lifting – make it easy to save money Security? Facebook, Flickr, Twitter, have helped break down barrier. We’re so used to sharing so much of our personal stuff online giving your bank account details away doesn’t seem a problem any more. Theres even a “survive the recession” Facebook group.
- Money saving offers, affiliate revenue for Mint
- Average savings offered on first visit to the site
- Financial advice, developed in association with CFPs
- Aaraon’s millions & the Intuit role; sunset Quicken within 6 months & move its several million users to Mint! Mint/Intuit and Yodlee’s platform plays. Joined up finances – TurboTax revenue returns
- Smartypig social saving – ELSA & the missing pensioner money – grandparents subidise kids & grandkids.
- 70% of account holders 25+
- Average goal £5,500 Goal amount by category: Travel >>>>>>>>>>>>> 21% (Avg = $4,400) Holiday spending >>> 12% (Avg = $900) Electronics >>>>>>>> 10% (Avg = $2,500) Average projected time until goal met based on savings rate: Just over 4 years
- Giftcards Cash incentives UK version – advisers?
- Said earlier that the FSA wrong about education, but not in context of our children. My kids belief systems shaped by credit crunch – will be better money managers than we are. Jacko/Mandela joke. Capital of Iceland. Fantastic news last September that finance education will soon be a mandatory part of the curriculum. At last! How will it be delivered?
- Games! Skill-Life, Pittsburgh, Cents City - Jan 2007, launched Oct 2009
- three primary, common-sense areas: managing money (i.e. creating a budget, checking versus savings account, and balancing a checkbook), borrowing money (i.e. owning a credit card, paying for college, and rent vs. mortgage), and growing money (i.e. buying & selling stocks, owning a business, and understanding compound interest). A comprehensive list of financial quests and the associated in-game locations appears below: The 70-10-10-10 Principle (The Eiffel Tower) Earned Income & Take Home Pay (The Statue of Liberty) Paying Your Bills (Easter Island) Setting Financial Goals (The Acropolis) Creating a Budget (The White House) Savings & Checking Accounts (The Sphinx) Balancing a Checkbook (The Great Wall) What is an Asset? (The Taj Mahal) Passive Income (Victoria Falls) Owning a Credit Card (Atlantis) Assets vs. Liabilities (The Colosseum) The Power of Compound Interest (Big Ben) Buying & Selling Stocks (Area 51) Paying for College (Sydney Opera House) Owning Real Estate (Stonehenge) Owning a Business (Hot Metal Bridge) Risk and insurance (Leaning Tower of Pisa) Buying a Car (Monte Carlo)
- Mini games at each location, win duckets, virtual currency
- Convert virtual currency into real world rewards with help from parents and sponsoring financial institutions
- Physicalising the digital experience with passports
- Microfinance is the new black; value is the new quality Budget management now a high priority Credit crunch was a wakeup call Debt re-broking, utilities & telecomms bills, petrol, coupons/ vouchers Rise of comparison sites make fs more relevant again - money is part of people's everyday lives, but trad advice/ planning is not! 10 year time horizons dont work for this market. definition of financial services - changing, now its utilities, telecomms, anything which needs a budget. PPI, bank charges, coupons, rewards, discount codes, council tax rebands, budget flights, utilities, best buys, high st flash sales news, loyalty card loophole exploitation Active not passive – the bus! Predictive alerts & automated avoidance...
- Personal touch – what happened when mum when knocking Who has that personal relationship now? People need a different type of guidance/ advice; turning to the net Moneysavingexpert.com Validation from trusted adviser Peer validation now more important than ever. Pub culture – my dad – painter, decorator, plumber. Today? tripadvisor, amazon people like you, as well as pro recommendation
- Reputation management Advocacy People like you
- New Man from Pru: Facebook financial friend pokes consumer for this week's money, consumer pays via paypal, twitter etc. Pay by twitter? Already happening – order bank transactions from twitter a/c – Vantage in USA? That Facebook finance app.
- · New Man from Pru: Facebook financial friend pokes consumer for this week's money, consumer pays via paypal, twitter etc. Pay by twitter? Already happening – order bank transactions from twitter a/c – Vantage in USA? That Facebook finance app.
- · New Man from Pru: Facebook financial friend pokes consumer for this week's money, consumer pays via paypal, twitter etc. Pay by twitter? Already happening – order bank transactions from twitter a/c – Vantage in USA? That Facebook finance app.
- What do we need to change to enable this (regulation, products, etc).
- Propositional change Brand & trust is incredibly important Expertise, reputation & advocacy Where’s the reward/ gratification? FS products mean people lose money –it’s not a particularly poitive experience at POS. How do you encourage them to stay the course? It’s about outcomes, not products. Sainsbury! reward strategies for consumers - iTunes cards etc
- Product changes Simple – low/ no choice, Nudge Transparent Packaged or unbundled - travel industry Reverse auctions for high interest a/cs. Cds I pay you now, and I might achieve my financial goal in 10 years time. Risk is all mine! Performance related remuneration. Share risk/ reward. Structured products – back to what Man from Pru sold – outcomes not products.
- Sell advice. Huge retail opportunities. The trusted adviser’s gold dust - Retail perfection – how much money client has, how much they will have in future, their future goals, how much they think they need to pay for those goals & when they will be ready to buy... When ‘everything’ is happening in real-time (Twitter, Facebook, Google, Bing), what’s the next big thing. Something that filters the noise (data overload) to just give you what you want – an adviser. Language – retirement (Skandia example) Disruptive - Mike Butcher Techcrunch Europe
- Process / Distribution Data capture/ factfind STP: Amazon, eBay experience Anonymity until POS Goals – for mass market its holidays, new car, pay off debt & mortgage, move home, have a baby, improve kids education Use multi-channel within the process, not single channel for each. Factfind & initial recommend via net, validate via phone/ face2face etc. Consumer in charge of decisions, which channel to use, when, what services, multiple advisers or none. Net, mobile, branch, interactive digital media (tv, games console, SKY or Freeview box), telephone. More distribution options, not less customers
- Regulation Internet advice category – like US Product reg? Make it easier as well as safer
- The product providers aren’t giving advisers the tools to do business Would you shop at Amazon if you had to do it like this?
- Technology changes STP, closing the loop Aggregators, data is important Links to social media Platforms, not point solutions (Intuit, Yodlee, Credit Unions in US & nextgen banking) Social media might get people to you, but you still have to give them ways to buy. The internet is no different to any other business; it makes its money when some form of transaction – the sale of a good or service – takes place, not simply because someone looks at a web page.