Expert: Kevin Mountford & Chris Shaw Facilitator: Chris Shaw
Headlines:
- It was generally accepted that there was a broad section of the population which found financial services particularly unappealing
- Challenger banks have made some inroads into this market with Savings products (particularly firms like Monzo with segregated savings pots) but it was still recognised that the majority of the money was held by older people in very “plain vanilla” accounts and there were little inroads being made to the younger market.
- The key question is how can the industry become more relevant to a wider audience and in turn help to build a savings culture, which is more important noting the current rate rise environment
- Financial services is boring and doesn’t seem to engage the younger generations - we wrap our offerings in language which seems designed to make access less appealing and fail to offer simple and cost-effective access points
- Can the likes of open banking, crypto, etc. be used to address this and can the language used within the industry be more customer centric with reference to goal based outcomes?
Context:
From around the table, it appeared that firms were funding this area and recognised the issues and opportunities, however the question was raised that ‘was the industry agile enough? as it appears that the innovation is coming from start-ups.
Also, the likes of platforms such as Raisin/ HL and distributors such as Amazon, Aviva, etc are helping to reach a wider audience and disrupt the market.
Generally, start-ups fail largely through lack of distribution and funding/time in the market.
Perhaps the established firms led by older, experienced players need to engage more with the innovation coming from start-ups with the younger generation?
Gamification really does seem to provide engagement (example Direct Line - Optimus Prime advertising machine is knocking the ball out of the park).
Also how do we address the investment wilderness that has been created with more mass market customers failing to establish a balanced portfolio as they can access advise and as yet have not moved in large numbers to online plyers such as Nutmeg.
The suggestion was made and discussed as the whether the established players with distribution and significant funds (and who need to engage and be relevant to their customers) should be actively looking for partnerships with the younger generation of innovators who speak the language and understand the motivation of the type the new target markets?
Key takeaways:
- The recent Consumer Duty from the FCA challenges the industry to innovate and compete in this area
- Currently we seem in stasis where regulation and compliance still trump innovation and development
- We need clarification from the regulator as to how far they’re prepared to meet the industry in testing these ideas
