I got together with Olga Miler, Co-Founder & CEO of SmartPurse, and looked at trust as a challenge, as an opportunity, and what makes people connect or not connect with their financial institution. Below are my highlights of what the former Group Head of Marketing at Quintet revealed in our very first UnbluTalk. Watch the recording to listen to all the gems our guest and I discussed.
Olga on uncertainty, digital, and money
“Our world is driven by enormous uncertainty. Digital has seen a skyrocketing, almost necessity, and it went into places beyond financial services. All of a sudden, people in hospital ordering goods have to use digital tools, who refused before to do that. It is a really pivotal moment. And ultimately, it's combined with all of this attention around money. Money being discussed because it's missing, money being discussed because of fiscal policies coming into play, money being discussed because of the market volatility.”
Starting on a low base
Only 31% feel that financial firms are honest and transparent.
“Well as financial services, we are starting from a very low base. I look at this with a very positive lens because where there is a low base, there is a lot of upside.
In the UK, as an example, only one third of people actually felt that financial firms were honest and transparent. It basically means that we have a huge population of people that are not really well engaged with all the great tools and knowledge to provide us financial services.
The FCA has found that only 6% of customers have used an advisor in the past 12 months. And another global statistic shows that 83% of retail investors globally said that one of the most important factors in creating a trusting relationship, is that you are disclosing fees and other costs. So bottom line: transparency is what provokes trust.”
Olga on how she identified the need for starting her own company, SmartPurse
“When I was working at UBS, we tried a lot of ways how we could engage in particular with the female audience. We wrote a book on women and money and we provided a digital proposition on explaining financial concepts. And what we found out was that women would not engage with our digital proposition, not because it was bad or wasn’t functioning, but because they felt that somebody would call them up later on to sell them a financial product.
And so this mistrust was so deep that when I looked at this with a bit distance, I thought this has to be done differently. And that is what inspired SmartPurse, where basically we provide financial education and access to vetted financial experts on a completely impartial basis. Completely neutral, not supported by any bank. And this impartiality actually helps to a certain extent to start to provoke that trust.
Now, is it easy? Absolutely not. Every day is an uphill battle because money is something that people are in general very interested in, when they need it or when a life moment happens, but nobody wakes up on the planet and says, “Today, I'm going to manage my money really well.”
We segment our audience by life moments, not by wealth brackets, and that provides access to vetted experts, which proved to be a very effective concept for us.”
The Purpose Opportunity
69% of retail investors said they’re interested in environmental, social and governance investing.
“The way people see money is changing. The concern for the planet is very imminent and sustainable investing is increasing. We as financial services, have done a stellar job in hiding the opportunities of sustainable investing. The last time I looked, there were 80 terms describing sustainable investing. So again, simplification and explaining this to people well might be a great opportunity. And then there is the other side of the coin, that young people start to almost be ashamed because they have a lot of money. They start to feel guilty and want to give this money meaning or donate it.
Look, the product shelf of sustainable investment is absolutely skyrocketing. And they are really brilliant products. More innovation is taking place, there are carbon neutral investment portfolios now, etc. So it's a matter of bringing the product to the end consumer. And that, to me, starts with two things.
Number one, your own work force has to be very well aware of the products. There is research that has been done, I think by Morningstar, that revealed how financial advisors hardly present sustainable products to their own clients because they don't understand it themselves. So make sure that your advisors know your products. Secondly: In a digital proposition, it is very important to factor all of these values into the profiling down to the risk assessment. If you don’t deliver, your customers will go to more specialised providers that are in the digital robo advisor space already and are purely focused on sustainable investing.
So factoring sustainability in plus factoring the passions of your advisors in, is where you need to start.”
The Education Opportunity
82% of retail clients would trust their financial institution more, if it provided annual continuing education.
“In my own research on roughly 1500 women, we found three areas where people were struggling the most. It’s about actually understanding the financial instruments. How do these products even work? The second area was to understand what the financial services providers even do. And who do I use for what? And then the third pain point was about finding a person or a tool I actually can trust. You see, we all know what we do. We all know why people should trust us. It's just that so far we haven't been doing a good job of transmitting this. So explaining really well how your investment decisions are informed or what's the solution that you bring to the table. Daring to actually provide price transparency or to provide even an indication of performance could be a really good way. I know it's legally super hard. But as a financial services provider, you can always find ways to be more practically transparent. And I think this is where the big opportunity is.”
The Communication Opportunity
48% of global retail investors said they trust their advisor more because of increased technology use, up from 40% in 2018
“You have all this digital communication outside of the financial services world that people use (LinkedIn, WhatsApp, WeChat, etc.). Customers are used to these and sometimes fail to understand why, because of all of the regulations in financial services, it becomes so incredibly complex. I was confronted with this many, many times where women would connect to me on WhatsApp (I was still in UBS), but I was only allowed to use official channels for communication.
So having anything that is at least like this experience certainly helps because for people it is second nature. They, of course, expect a certain speediness in the answers you provide and accuracy of information.
So I would love to inspire and encourage everybody to make use of these channels, to make use of showing your workforce, how they can have direct line communication and make it as easy as possible for the audience to connect to you. It's not only an opportunity. I think it's almost a necessity.
And looking at the research, only 48% of global retail investors said they trust their advisor more because of increased technology use, which seems low, but I took a lot of comfort from how the figure has gone up. So the role of technology is really acknowledged. In many cases people prefer to speak to a human being, but they want the convenience of technology. So that brings us all to these hybrid advisory models, where technology will allow you to extend your reach, but it’ll also allow you to connect your human workforce much better to decent consumers.”
The Engagement Opportunity
Your future customer will be more and more female.
“80% of global purchasing decisions are taken or influenced by women. I've researched that for almost a decade now, and roughly 40% of the global private wealth, owned by women, is expected to grow to 60% because of extended longevity, returns to the workforce and women founding businesses.
What I mean by the engagement opportunity is that we don't do a good job on segmentation. So looking at your data differently, be it with a gender lens, but also be it with other affinity groups and looking at your customer very deeply to understand which groups are regaining, which groups are we losing, and not just look at them in both brackets. And I know well, brackets are very important because they drive revenues and remuneration models are linked to them. But my recommendation would be to add ones on top of that, to detect customer clusters where you might have a stellar opportunity.
Now, mind you, women are half of the planet's population. You can't just segment by gender, but it is a really good starting point. Segment by life moments. Why? Because people display different attitudes to purchase and need financial advice at different moments in their lives. And also: Psychologically, women’s relationship to wealth is very comparable to the millennial customers. That notion to sustainability, the way they perceive communication, the way women expect the CX to be. I did a lot of research and found out that if you get it right for the women, which might be imminent, you actually improve your CX for future customers.”
Jens’ main take aways
Let’s start with: this was the most insightful conversation I had this week at work. Thank you Olga!
Here are the clear winners of what-to-take-away from this session:
- Know your products. An appeal to every single financial institution out there. Offer the right product to the right customers and learn product details by heart. Exactly.
- Next, and most striking for me: There is so much more space left for technology to come in, be used by advisors, and contribute to the customers’ increasing trust in their bank.
- One that is a lot easier said than done: be as transparent as possible. When it comes to product details, terms and conditions, prices, and literally everything that is part of your customer interaction. Ensure that transparency is provided if possible within the regulations and watch how your customers will appreciate it.
- If you want to understand how Millennials make financial decisions, you have to understand female customers. The two segments are extremely similar and addressing their needs is vital for your institution’s future success.
But above all, I am excited for any future UnbluTalk with experts from within our industry.