Relevance, The #1 Rule When Developing New Products

Relevance, The #1 Rule When Developing New ProductsWhen launching a new product, many factors impact the success of the product: timing, marketing, ease of use, availability, price… I could go on. But, across the board, one factor makes or breaks the success of a new product: Relevance.

Now more than ever, a product not designed to fit into the lifestyle of the customer will fail. The only question in those cases is how long it will take! While this is true for any industry, this is particularly the case for the financial services industry. Additionally, as FinTech changes the landscape for financial services companies, the need for new and innovative products is significantly increasing. Continue reading

Answer Before They Ask: How to Message Millennials

Banking & Millennials Series: Part 3

Editor’s Note: For banks struggling to establish relationships with Millennials, “Banking & Millennials” is a three-part blog series that explores the savings/investing potential of this group, exposes why popular stereotypes are dead wrong and suggests a roadmap for setting your bank apart from the competition. This is the third and final installment.   

People are communicating constantly—on every conceivable channel and with astonishing frequency—making omnichannel marketing essential for nearly every industry. Banking is no exception. Banks need a presence in heavily trafficked mediums to ensure maximum reach, especially considering that one of their primary target audiences is Millennials. This group is never without their smartphones and consumes content from dawn to dusk. But what is the value of your omnichannel reach if your message is all wrong?

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Miley, Megan and Mike: Do You Know Your Millennials?

Banking & Millennials Series: Part 2

Editor’s Note: For banks struggling to establish relationships with Millennials, “Banking & Millennials” is a three-part blog series that explores the savings/investing potential of this group, exposes why popular stereotypes are dead wrong and suggests a roadmap for setting your bank apart from the competition. This is the second installment.    

College educated. Upper-middle class. Very young. Sound familiar? This is the stereotypical Millennial that Corporate America has been pursuing for years. But is this an accurate description? Do all Millennials really fit that mold? And are businesses leaving anything on the table by using that characterization to define and target an entire generation?

The answers are no, no and yes! Millennials range in age from 18 to 34 but encompass a wide range of life stages. The younger end of the generation has just entered into “adulthood” with newfound legal rights and responsibilities while the older end of the generation has been on their own for nearly 16 years. Their goals, needs and wants are vastly different.

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How Big is Your Piece of the Millennial Pie?

Banking & Millennials Series: Part 1

Editor’s Note: For banks struggling to establish relationships with Millennials, “Banking & Millennials” is a three-part blog series that explores the savings/investing potential of this group, exposes why popular stereotypes are dead wrong and suggests a roadmap for setting your bank apart from the competition. This is the first installment.

When I first began doing research in the banking space, I assumed the main reason banks had a hard time attracting Millennials was the group’s lack of cash to invest and save. I was wrong. While some Millennials are just entering the workforce and others are in college, many have been earning big bucks for a while now. In fact, nearly one-quarter of Millennials have more than $50,000 in investable assets and actually show a greater propensity to save than older generations.

If spending power and a strong propensity to save are not major hurdles, why are banks struggling to win over this generation?

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Negative Interest Rate Policies Do More Harm Than Good

United States policy makers are weighing whether a negative interest rate policy (NIRP) will help or hinder the economy. The lingering effects of the financial crisis raise questions about the effectiveness and potential impact NIRPs stand to have on both consumers and financial institutions.

Although the goal to reassure the strength of the U.S. recovery and protect against inevitable future downturns is noble, this central bank policy does little to benefit the economy. NIRP is a radical policy tool previously used in rare situations, such as the Swiss banks’ attempt to stem the flow of foreign cash taking advantage of the country’s legendary bank secrecy laws. Now we’re seeing the fallout of the Japanese central bank’s adoption of NIRP, which was intended to incentivize spending in a nation of savers, but has had an inverse effect. If adopted in the U.S., a NIRP will upend America’s basic understanding of how financial institutions work and have far-reaching consequences that would create a ripple effect throughout the financial services industry.

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Sally Embarked on a Stroll with Her Canine

Four tips for communicating clearly with investors

Communicating Clearly with Investors

I started writing school papers in the third grade. By the time I reached my senior year in high school, I had become a pro at stretching 100 words of substance into elaborately-worded essays to meet the 750-word minimum assignment. It wasn’t until my freshman year of college—when my philosophy professor forced us to write about hefty “meaning of life” subjects in no more than one, single-spaced, 10-point font page—that I started focusing on writing clearly and succinctly.

This same writing baggage hinders some communicators in the financial services industry, in particular those speaking to end investors. Innovation can be a tricky goal, especially as it applies to financial product development; however, being innovative with your communication can lead to refreshingly clear and understandable language.

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Do You Hate to Lose or Like to Win?

How cognitive biases can influence market research results

Do You Hate to Lose or Like to Win?

Let’s assume you are looking to invest some money and come across two investment options:

A portfolio that promises an 80% chance of earning $4,000, but a 20% chance of no return A portfolio with a 100% chance of earning $3,000

Which one would you choose? If you are like most people, you would choose option two. However, when we analyze each of the prospects, we realize that we are better off with option one (expecting to earn an average of $3,200 vs. $3,000 with the second portfolio).

We all want to believe that our decisions are rational and based on a careful evaluation of all possible outcomes, especially when it comes to money. But in reality, emotions, intuition and cognitive biases play a bigger role in our decisions than we acknowledge or want to admit, both in financial decision-making and in market research. Due to these biases, we often deviate from the conventional economic model of decisions based on expected utility: We like the idea of winning $100 and dread the idea of losing $100, and not because $100 has a major impact on our wealth. We simply dislike losing more than we like winning.  Continue reading

The Rise of Robo-Advisors

Are Robo-Advisors the future of personal investing?

Robo-AdvisorsRecently, a colleague and I took a trip to the Big Apple to visit a client. We took the Acela Express from South Station, Boston, and soon after we boarded the train, we took out our laptops and started working, almost out of pure muscle memory. A gentleman boarded the train one stop later and sat across from us. As my colleague and I continued to work and discuss such things as breakaway advisors, RIAs and heavy RPAs, the gentleman started making his phone calls. At the end of his second or third call, it became apparent to all three of us that we were speaking the same language of “wealth management.”

We quickly introduced ourselves and started talking about the kind of projects we were working on, discreetly of course. The gentleman was actually working for one of our clients and handling their “robo-advisor” initiative.  As he explained his work, it occurred to me that I had not done much research on robo-advisors. I had been hearing a lot about it, but from an “end-user market research” point of view, I had not had a chance to conduct research on it. Working in a group whose sole focus is wealth management and having conducted research across a broad range of “wealth” audiences, my initial hypothesis was that perhaps little research was being done in this area.  This chance encounter on the train piqued my interest in robo-advisors so, upon my return, I started reading, thinking and speculating: “Why isn’t there more market research on robo-advisors?”

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What’s the Big Idea?

2014-07-big-ideaFour Tips to Optimize Research-Driven Thought Leadership

Industries define “thought leaders” in many ways, but most would agree that earning that coveted designation is an important differentiator. Achieving thought leader status does not stem simply from outperforming the competition but rather from pushing the boundaries through the introduction and promotion of a particular new idea, view or method. This designation is not achieved overnight and does not last forever; it requires ongoing corporate commitment, consistency and dedication. In many cases, being perceived as a thought leader is less about reinventing one’s brand identity than injecting the company’s DNA into topics it explores and communicates.

This does not preclude a firm from expanding its current areas of expertise but firms should determine how they can best align their thought leadership efforts with their current brand strategy to ensure consistent messaging.

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The Pitfalls of Idealizing Customization

2014-03-inbox-fsWhy an Investor Should Want to Be Treated Like One of Many

After six middle and high school years of writing an honor pledge at the end of every paper and test, I entered the working world thinking that everything I created needed to be built from scratch. It took a single project for my boss to hammer home the idea that leveraging templates is smart, not stealing. (I’m sure the crude visualizations from a PowerPoint newbie tipped him off.)

Fast-forward to today and I’m struck by how often we see the intelligent use of templates, especially among the financial professionals we interview. From advisors’ model investment portfolios and risk assessment surveys to DC plan sponsors’ consideration of investment options, professionals use templates for economies of scale…and clients would be foolish to want it any other way. Continue reading