It is pretty obvious to anyone with one functioning retina that UK retail financial services brands have not focussed on the interface with their customers, whether that is online or in print.
Most client reports are horrible. Life companies are particularly good at sending out 18 pages of black and white boring twaddle but newer platforms are not much better. Websites are perennially safe navy blue, dull and text-heavy. Videos are still centered around the dreaded notion that we need to “educate” our naughty customers. At length. And let’s be honest – not all of this can be blamed on regulation.
In a world where the words “commoditisation” and “homogenous” are bandied around a lot, customer engagement and the user experience represents a chance to stand up and be counted. Just look at how many column inches (and £s from backers) the visually appealing Nutmeg has generated.
Last week I attended the Finovate financial technology showcase in New York. Here, I have pulled out the seven firms which can teach us something and that are a must-view for anyone running a retail financial services proposition today. They illustrate two broad themes: the first is how to engage our customers, verbally and visually. The second is how to start to engage those with small amounts to set aside.
Verbal and visual engagement
First up was Blooom. Although they have a few too many “o”s for my liking, this company has great copywriters, doing away with the techno-waffle of the lazy. It is a masterclass in how we can talk to normal people about their savings. And then there’s the beautifully simple visual imagery. Not saved enough or in a dodgy asset allocation? Cue picture of a wilted flower. Sort your portfolio out and the flower perks up. It blooms. Geddit? What is interesting about this technology is that they have engaged with the likes of Vanguard and Fidelity in the US and sit on top of the platforms or aggregators. For $10 (£6) a month, customers can delegate Blooom to assess, rebalance, place trades and monitor their previously unloved 401k accounts. It also has relevance to our current pensions guidance debate. Have a look.
Next up, iBillionaire, offering consumers the ability to make like Soros and even buy an exchange traded fund that tracks the oligarchs’ buying patterns. See how individual billionaires invest and copy them. This business has one major thing going for it. – normal people down the pub will like it. I like it. While there are thousands of reasons why this may not be the optimum approach to investing, let’s be honest – what is an index anyway? We cannot bleat on about consumer engagement and ignore stuff like this.
FlexScore should come to the UK. With the clever strapline “financial advice for the rest of us”, they explore the concept of peer ranking. The easy-to-use app gives consumers a score out of 1,000 (how well they are doing in managing their finances compared to peers) and gives you some quick, clear and realistic action points on what to do to improve these scores. It maps consumers against their peer group and is a very polite “kick up the bum” to actually do something.
Finally, Kapitall, with the spookily similar strapline “investing for the rest of us”, combines gaming and investment. Now I am never quite convinced of the depth of that market in the UK – how many people care enough about investing enough to want to play games around it? But where Kapitall shines is how it represents portfolios. Instead of boring lists of stocks held, they have small tiles with the companies visually displayed by their logos, reinforcing the whole concept of underlying stock ownership. Rebalacing and trading involves dragging and dropping these tiles. Fund manager factsheets could usefully take a leaf out of this firm’s book.
Don’t Forget The Little Guys
Normally, we spend a lot of time and effort thinking about the high-net-worth investor. One highlight of the conference for me was a few mentions of how we can engage people with small amounts to save, something which the Treasury really needs to get its head around. .
Once the audience had re-tuned their ears for a Geordie accent, True Potential showcased ImpulseSave. It’s a neat idea where smart phones, mobile devices and wearables can be used to make small investments. Tap on the screen to save as little as £1 which will be automatically invested into a fund for you. TP customers have invested more than £4m this way since launch earlier this year and interestingly some 40 per cent of this was from amounts of less than £10. Hats off to a smaller UK firm for just getting on with this.
Loyal3 is a business which allows small investors to buy into IPOs they wouldn’t normally be able to access, for smaller amounts than would normally make sense given transaction fees. Some investment-bankery-jiggery-pokery behind the scenes means their revenues do not come from trading fees – so there’s no cost for trading. The owner is evangelical about the fact that this is not a trading site but it’s a “loyalty scheme”. If your customers own a little piece of you, they’re more likely to stick with you. (Interesting idea for the listed financial services providers.)
The final firm to grab my attention was Yodlee who talked about the “invest your change” concept. Imagine you’ve bought an (overpriced-skinny-tax-paying) coffee from Starbucks, used your mobile for payment, and had the choice to put your small change into an investment pot. Instead of coins jangling in your pocket you can add this all up and invest in a selected stock or fund at the end of the month. Nice. I would love my platform to support this. I’m told there’s a firm called Acorns Grow with a similar concept.
We Brits could make massive inroads with a simple low-tech look at our language, our pictures, our websites and our apps. Despite the technical whizzery in evidence at the event, the Best in Show awards are typically scooped by those with good user interface and good user experience. Which to someone with a small brain like me, just means pretty pictures and nice words! And ‘twas ever thus!?
Holly Mackay is the founder of The Platforum