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Ian McKenna in San Fran: Technology is shaking up the traditional approach to financial services


The second day of Finovate Spring saw no let-up in providing a continuous stream of innovative new services which have the potential to transform the way consumers manage their money. The first service I want to highlight in the second instalment of my summary of the event is a new social media service targeted at financial advisors and consumers. 

Having been piloted with 50,000 users in Spain, where beta adopters have included Fidelity Spain, BBVA, Putnam and the European Financial Planning Association, Finect is described by its president Jennifer Openshaw, who is also a columnist with the Wall Street Journal’s MarketWatch, as a “LinkedIn dedicated to the financial advice markets”.

In addition to many of the elements you would expect from social media it includes a range of added value content. For example, the service provides a social media compliance offering enabling organisations to manage what their staff can publish and promote as content on LinkedIn, Twitter and Facebook. 

At least in the US, social media may be beginning to take on a wider role in the financial markets

Different permission can be allocated to different individuals so that those trusted to comply with a company’s social media policy can be given a free rein to create and publish new content where as others can have a range of restrictions applied.

In addition, real time market information is provided by Reuters allowing users to follow investment products in the same way as they would follow a company on social media. This enables users to see an aggregated view of traditional market data along with social media sentiment.

A number of the organisations demonstrating at Finovate were showing solutions that include use of social content as well as market data. This suggests to me that, at least in the US, social media may be beginning to take on a wider role in the financial markets with organisations increasingly recognising the effect such sentiment can have on overall market opinions.

Finect is accessible by both professional advisers and consumers and through a connection with specialist US advisor monitoring organisation Data Discovery professional firms can have their credentials highlighted in their profiles and discussion groups.

The sign up process is particularly clean and efficient and I was very impressed by the way in which user’s other social media profiles are imported when creating their Finect account.

There are certainly attractive elements to this professional social media solution which would be valuable if replicated by some of the financial social media sites in the UK. As such it provides some interesting insight into how next generation services might evolve in the future to provide a range of dedicated professional content to help advisers and consumers rather than the pure discussion group capabilities of the current UK financial social media offerings.

Flexscore is another great service that has been designed by a team of registered investment advisers to help users’ access great financial guidance.

In this case the service is actually free of charge. The idea is beautifully simple. Users are taken through a questionnaire that covers 14 financial categories designed to build up a picture of the individual’s financial health. This is based on multiple factors the Certified Financial Planner Board of Standards agree should be monitored by consumers.

From this, in a process designed to take between 10 to 15 minutes, the user is given a personal score based on their responses and the extent to which the user is managing their personal financial affairs effectively.

The service is designed to answer a simple question “How am I doing?”, which CEO Jason Gordo believes is really the question that everyone wants to know when seeking financial advice.

Describing their offering as “financial advice for the rest of us” it is clear that the Flexscore team is really committed to expanding the reach of financial advice and say they want to “make improving one’s financial health a fun and achievable goal”. Gordo is scathing about the way the financial services industry has behaved historically stating that “Wall St is born around salesmanship, we wanted to build a service around stewardship”.

Once users have obtained their score, the service will provide them with custom action steps, peer ranking and the ability to model financial decisions to see how they will impact your future. It guides them to do things that are good sense from a personal financial planning perspective.

The business works on a referral fee model earning income from organisations who users are directed to as a result of following tips to improve their score.

Yseop is a fascinating artificial intelligence application which can write like a human being but at over 1,000 pages per second and in multiple languages and can add intelligence to any CRM application, claiming to be able to turn bankers into perfect financial advisers. I appreciate many Money Marketing readers will consider this a feat equal to the biblical claims of turning water into wine but they tell a fascinating story.

The service also claims to be able to design tools to enable the sale of complex financial products over the web.

I did feel that its perspective of financial advice was more in line with the low level of professional standards applied by bancassurers elsewhere in the European Union and I got the impression they would struggle to meet UK regulatory standards.

In some ways this was one of the most exciting presentations over the two day conference but it was also the one that I was least convinced about in terms of their actual ability to deliver. It also demonstrated a document creation capability similar to that shown by Narrative Science.

Of all the organisations presenting at Finovate Spring, Balance Financial was probably the most similar to the sort of traditional financial advice software solutions we are used to seeing in the UK.

Its proposition which is designed to fit between traditional client relationship management software and financial planning tools provides a digital workplace where adviser and client can conduct virtual meetings. The service is already used by over 1,200 financial advice firms across the US.

Balance Financial tries to avoid putting too much information in front of the client

Unlike many client portals, it aims to avoid the information overload that can come from putting too much information in front of the customer at one time preferring to deliver a workspace which enables users to focus on the client conversation.

The workplace includes a virtual filing cabinet, a balance sheet to show assets and liabilities, tasks and project management tools as well as chat and interactive messaging and different communications. In addition the service can aggregate data via a Yodlee link.

Conversations can include multiple participants to include other members of a family or other professional advisers into the same digital meeting. A web clipping service, similar to Evernote can also be used to support conversations. You can follow this link to the Balance Financial presentation

In the last of my summaries of Finovate Spring I will be looking at a fascinating new way to monitor how accurate investment analysts are on a regular basis and a great new service which, if brought across the Atlantic, could potentially help rid the UK of the curse of the payday lenders.

Ian McKenna is director of the Finance & Technology Research Centre


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