Tuesday, 3 March 2015

Fintech trends, analyst industry round up part 2

Guest post: Eria Odhuba analyst relations lead for Comms Crowd collates industry analysts predictions for fintech for insurance, China and the cryptocurrency eco-system.

Gonna be a scorcher for fintech
Before we get too far into March, I thought I’d follow up my previous predictions by continuing to look at what analysts think is in store for the rest of 2015. I’ve also given myself a bit more time to get information from calls, reports or announcements made during February.

One topic that is hot right now - insurance. If you’re like me, insurance rates seem to shoot up every year. But if technology is being used to make the insurance industry more cost effective (and, hopefully, pass the lower costs on to us), what are the key things to look out for in 2015.
Focused on the US insurance market, Aite Group predicts a new trend which will inevitably be widespread elsewhere – personal risk management. Key things to look out for include:

1. Smartphones enable next-generation risk management capabilities

2. The Internet of Things and sensor fusion technology contextualize risk

3. A personal data backlash creates monitoring opportunity

4. Insurance learns to share

5. Digital marketing platforms socialize

6. Core applications cloud compute

7. Risk-scoring models sell life insurance

8. Health insurance transparency reaches ubiquity

9. Health insurance payments go mobile

10. Docs demand denial-management data

Here in the UK, the key trends are 1, 2, 4, 5 and 6 (my take!) – we’ve not reached the health insurance penetration rates you get in the US, but there is a lot that vendors and clients will learn from the US experience.

For those interested in China, Kapronasia has looked at the top 10 China banking and capital market trends, plus the top 10 Asia digital currency trends. Key ones that jumped out for me include:

1. Wealth management will continue to be a key product area – with a growing elite class, this is inevitable especially as a growing band of rich Chinese look to pass their global wealth to heirs while minimising tax.

2. Chinese financial institutions move away from foreign vendors. Now this is big news. Over the past few years, the strategy for vendors looking to get into China has been to partner with local firms / individuals who can help navigate the bureaucracy that existed. It looks like Chinese firms are starting to build up the expertise needed to deliver many of the services that local financial services need, so foreigners will struggle to make in-roads. Value-add will be a premium for winning new business.

3. Overall digital currency regulation in Asia will not be positive. Trust is a hard thing to win, and digital currencies in Asia will be something the regulators look on with suspicion until they know more about them – and their potential for fraud. Basically, more money for analysts, consultants and lawyers that can help vendors and firms navigate what could potentially turn out to be a big, fat mess!

For more capital markets predictions, Greenwich Associates doesn’t just have 10 trends to watch, it has 15! Where do I start with these predictions, you just have to read them. The one I think will result in big structural changes (though all of them will) is number 7 – the unbundling debate in European equities will rage on. ESMA and the FCA have proposed a complete unbundling of all research advisory services including corporate access. Blood will be shed getting this sorted – and the buy-side firms will seriously have to think about how they access and use research to deliver value to clients.

Finally, what about Bitcoin? There are two sources I’d like to draw on regarding this.

First of all, let us look at Aite Group’s report in December 2014. This, controversially for some, came up with an interesting hypothesis. Bitcoin, as we know it now, might not exist in the future but could evolve and provide the platform for new laws and forms for cryptofinance within the financial services industry. The ‘Napster-came-before-Apple-and-Amazon-and-Google’ comparison might be something we look back on in a few years time.

Secondly, Juniper Research has published a report on The Future of Cryptocurrency. Whether bitcoin or other current forms of cryptocurrencies exist in 5 to 10 years time, Juniper predicts that although crypto-transaction volume is likely to increase in 2015, value should decrease 58% throughout this year to approximately $30 billion. It believes that despite the drop in bitcoin values, it is a great tool that can be used to improve the payments ecosystem.

Taking the Aite Group and Juniper Research reports / predictions together, it all makes sense. Crypto-currency transactions are in their infancy. With sensible regulation, sound storage and custodian services of cryptocurrencies, enhanced fraud protection and education, 2015 might just be the start of something really exciting.

Both the predictions above and those covered previously will drive the need for advice from the industry analyst community. There is so much change happening in fintech and a huge need to incorporate new things with old, creaking legacy systems, CIOs will have to prioritise with care.

Happy days!

If you found this interesting you may also like: 

How to ensure AR programmes deliver to the bottom line
- Part one
- Part two
- Part three

Or you may want to peruse our analyst relations whitepaper which is a summary of the above three blogs and can be downloaded here.

Tuesday, 10 February 2015

Why tech startups and PR freelancers are a winning combination

Year Four of being a freelancer:
A present for me? You shouldn't have!


Perhaps freelance years are like dog years, for I’m starting feel like I’m in my freelance prime! Four years in, and, as they say on those talent shows, ‘it feels like this is my time’! Oh why’s that then? Well I’ll tell ya.

Tech in general and fintech in partciular is finally hot! After some 20 years of apologizing for working in a sector of which nobody has ever heard; countless conversations explaining what I do to those whose eyes glaze over in the time it takes  to say ‘enterprise-wide trading systems’ - all of a sudden our sector is hot! Ya baby!

Not only is our sector hot, my home town for some 30 years, London, is fit to burst with tech startups and I do love a startup – always have! Not for me the 200 page branding guideline bible, the 83 slide PowerPoint on our ‘core’ USPs. Where’s the opportunity to add value to that (other than rip it up)?

I love the pace, the energy, vibrancy that comes with  young tech companies. They are brave, bold and, my lot at least, quite audaciously brilliant. But it’s always struck me, that at the point a young company needs the most care, nurturing and attention to its comms, is just when it can least afford it. Sometimes, that's not a good fit for a standard agency, where there can be an expectation mismatch, (a big PR budget for a small company is still a small client for a big PR agency). But it’s a great fit for collaborations and small networks of specialist freelancers like The Comms Crowd. Freelancers by our very career choices have often rejected the status quo and defined ourselves as fellow disruptors.

Another great thing about working with young tech companies is the absolute lack of formality. This suits me down to the ground, I want to use my time helping that company do smart comms, not validating how smart I am. Decisions are quick, turnarounds fast, reporting is a spreadsheet in google docs and emails are brief, often littered with typos from both sides. Witness recent email exchange, informing client CEO that we had secured media interest from a noted publication.

ME – OMG We’ve got Forbes!
CEO – F*** yeah!

And of course when you work in a hot sector, in a hot city, with hot clients, you get to talk to media that you have never had the temerity to approach before, but that, it turns out, are really just like us, if you have a decent story to tell. And call me a easily impressed but for a long-toothed B2B fintech PR to be suddenly talking to the nationals, is just really rather cool!

So yeah, in this the fourth year, I find myself, in the right place, with the right business model at the right time - happy freelance birthday to me and the crew, being four rocks!

If you enjoyed this post you may also enjoy:

Happy freelance birthday to me - I am one!
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Wednesday, 14 January 2015

Hot Fintech trends for 2015 - analyst round up part one

What are the industry analysts predicting for retail banking, risk and FX?

Guest post: Eria Odhuba analyst relations lead for Comms Crowd puts together a digest of analyst insight on fintech trends in 2015.
What's hot in fintech?

Traditionally, this time of year means predictions – when wise industry analysts predict the key IT trends for the next 12 months or so. Kudos to analysts willing to stick their heads out! So, at the CommsCrowd we thought it might be helpful to summarise analyst predictions for 2015, specifically, the financial services technology industry – one of our sweet spots.

It’s going to be a series of posts as there is much to cover, this one looks at retail banking, risk and FX. I’ve decided to start by pointing to a number of articles that I feel provide a really good overview of the predictions within specific sectors of financial services for 2015, to which industry analysts have wholly or partially contributed.

Caveat - some analyst firms still have predictions webinars coming up so maybe I jumped the gun a bit (e.g. Celent). However, if you know of other predictions that should be read, please feel free to share these. I definitely don’t claim to have scanned all the key predictions out there – so share away.

The digitisation and disruption of retail bankingThe first article, if you have not seen it already, is a whopper! Top 10 Retail Banking Trends and Predictions for 2015, The Financial Brand:
  1. Using Customer Analytics to Drive Contextual Experiences
  2. Expedited Deployment of Digital Delivery
  3. Mobile-First Design
  4. Increasing Digital and Social Selling
  5. Mass Market Acceptance of Mobile Payments 
  6. Focus on Security and Authentication
  7. Industry Consolidation
  8. Enhanced Customer Incentivization
  9. Investment in Innovation, Incubation and Uncommon Alliances
  10. Increased Impact of Digital Disruptors
So what caught my eye? Apart from specific analyst comments, it is the massive interest in, and inter-linking of, digital, personalisation and mobile. I imagine we’ll see lots of waves being made as banks fight to win/keep customers and look to make their multi-channel experiences seamless, enjoyable and secure.

Oh, and Apple Pay. Trust them to put a spanner in the works!! Ovum is just one of many analyst firms that have a view on how this will change the payments landscape.

Align that spine
But, every now and then someone highlights the ‘old world’ stuff that needs to be sorted out. Check out Four big bank tech trends for 2015 by Chris Skinner. Good old core banking systems renewal is, reluctantly, hanging in there as a major target for investment against ‘newer world’ entries like cloud, analytics and incubators. Banks have to get their spines in order and renewing core systems is a nasty job (probably why CEOs don’t like doing it).

Invest in risk or risk failed investments
If you like going deep, deep, deep undercover in the risk world, IDC Financial Insights’s Worldwide Risk Management 2015 Predictions is a good bet. What do they say?

1. Risk data aggregation, analytics and reporting consumes 75% the CRO agenda in 2015.
2. Led in part by big data solutions, fraud and financial crimes analytics will set global financial institutions back US$2.8 billion for software and services by 2016.
3. 30% of top compliance functions introduce a technological means, business processes, and metrics to manage and minimize conduct failures.
4. Institutions increase investments in risk culture through enterprise education by more than 15% in 2015
5. Industry clouds disrupt legacy risk operations and contribute to 10% reduction in KYC and other compliance costs by 2016.
6. Virtually all CROs will be engaged in credit risk modernization initiatives through 2016
7. By 2016, threat intelligence security services market will growth at 20% CAGR, with consulting services leading the growth.
8. To meet the demand for convenience, by 2016, 10% of mobile-initiated commerce will be biometrically secured, and password usage begins to show signs of decay.
9. By 2017, with workable boundaries of regulation at state and federal levels, financial institutions find their role in crypto-currency clearing.
10.Through 2016, operational risk spending will grow at 8% CAGR, almost 2 times the average growth rate for all IT industry spending.

What got me, first, is the eye-watering $1/2 trillion (really) IT budget for risk across all financial services and, second, the fact that this is still increasing. Risk management, with all the accompanying regulatory, human, technological and political pressures will be a big issue in 2015. Industry analysts that focus on this area will be VERY busy as the need for advice to navigate this really complex area continues.

Cloud, big data and analytics are entrenched topics for discussion now – and in 2015, the vendors that catch analysts’ eyes will be the ones that actually deliver solutions to mitigate risk across these three areas and not simply have aspirational messages.

FX - up your game plan
What about some capital markets-specific predictions? I’ll stick to FX. We all know regulations and FX-fixing seemed to dominate headlines as 2014 closed.

FX-MM magazine has a brilliant overview of what Aite Group thinks will be happening in the global FX market in 2015. There is a lot to digest but I’ll highlight a couple of things. First, tier 2 – regional and national – banks will need to up their game in various areas to compete effectively with tier 1s. Second, as pointed out by Javier Paz, banks looking to broaden their capabilities will need to carefully manage crucial relationships with FX technology firms, brokers and venues. I predict a queue to analysts that can help vendors and/or banks deal with all these issues – and this is just FX!

Self-fulfilling prophecies
These predictions will, to some extent, dictate what analysts are interested in. And if they are really interested in something, it is because there is a demand for their insight. While I have not covered all the fintech predictions possible in this post, it is clear that things like regulation, mobile, customer experience, cloud, big data and analytics will be top of mind in the industry.

The key thing many banks and vendors have to do is to find the right analysts to help delve deeper than the predictions outlined and actually get insights that give them a competitive advantage.

Look out for predictions post #2

If fintech is your thing you may also find the following of interest:
Picture courtesy of www.theiconconciergeblog.com