SxSW 2017: FinTech and the Future
By Mark McClennan, SVP, MSLGROUP
When most people think of SxSW, they think of major consumer brands, innovative technology startups and social, social, social. But there is a powerful minority of attendees that is looking at the future of FinTech. There were more than a dozen sessions this year touching on everything from Blockchain to innovation, social commerce to The Frenemy Feud (which took a slightly humorous look at the challenges facing consumers and the industry). Many of these discussions can also be found at Finovate, Money20/20 and FinDevr among other conferences – but SxSW brings a broader ecosystem to the table.
This slide from the Banks and Beyond panel shows the scope of the industry today and how it has grown well beyond core financial services.
As I mentioned in an earlier blog post – almost every question at SxSW can be answered with one of three answers – Bots, AI and VR. FinTech is no different.
Bots in Financial Services – I had interesting discussions with a number of bankers and FinTech execs about bots in FI. While most FIs were talking about bots use in customer service, one potential application that seemed to excite many of them was the possibility of the use of bots in financial literacy. Many FIs spend resources educating consumers on everything from budgeting and loans to smart investing. The challenge is going beyond working with mavens and content marketing. Bots may provide an interactive, branching, conversational tree to have interactive dialogues with customers and is something FinTech communicators should explore.
AI and data – Financial technology is ripe for AI and many are using it on the institutional back-end. One of my favorite assertions was made in the FinTech: Banks and Beyond panel: Data is new asset class and financial technology companies need to follow the three “I’s”.
Data is powered by Integration (datasets and partners) – the move is to opening APIs and SDKs and showing how working with other financial technology companies improves the overall end-users experience (both B2B and B2C). In speaking with many financial reporters and influencers, they are excited by stories of this type and communicators should highlight how they are opening doors.
o Intelligence (AI) – There has been a sharp rise in discussions on AI in financial services over the past year – from credit scoring and lending to customer service and big data analytics. The challenge I see is too many companies are calling everything AI and it is diluting the impact and causing confusion. It is in danger of being turned into buzzword bingo. We should be clear how our organizations are using intelligence and predictive modeling to avoid confusing media and end users.
o Integrity – In the end it boils down to trust. Businesses and consumers are giving Financial Services and FinTech companies access to some of their most valuable data and assets. For communicators this goes beyond highlighting how companies aid in compliance and should be a foundational element of any communications program.
FinTech innovation is booming – One panel laid out the numbers and the numbers are good. There was more than 30 billion in global financing volume for FinTech and 1,500 financing transactions in 2016. The consensus is that we are likely to see drastic changes in financial services and FinTech over the next few years, but it is not likely to be from a unicorn such as Uber. Rather, there are so many inefficiencies that can still be addressed, that we should expect drastic changes, one element at a time, without adding systemic risk. This is important to keep in mind as communications professionals as we want to show the disruptions, but need to also drive home why it will be adopted. For long term adoption and communications success disruption for disruptions sake alone is not enough.
Authentic engagement drives results – Financial services and FinTech companies must engage the consumer if their service in any way touches the consumer. Word of mouth is essential in consumer financial services. It is the trust amplifier. 40% of people who have a positive experience at a financial institution will recommend to 10+ friends. That’s a powerful return.
This is an exciting time to be a financial technology communicator. I believe we are on the cusp of a new wave of innovations as FIs invest in their internal innovation and FinTech companies big and small are rapidly iterating new B2B and B2C services.
If you would like to continue the conversation, please engage me at @mcclennan or firstname.lastname@example.org
Mark McClennan is a senior vice president and head of the Consumer Technology practice and Business & Financial Services practice at MSLGROUP.