This article discusses the different preferences that the Generation Y people think about regarding finacnes and banking. One of the findings of KPMG  was that many in this generation have been found to be more likely to purchase luxury items and travel while delaying other larger purchases like property ownership. Another finding was that with the emergence of a large array of finacnial technologies allow for Generation Y and younger individuals to have multiple different products depending on the features. Younger people can have many different banks or financial services in order to have access to the best capabilities and features possible. Lastly, half of the responsdents would possibly bank with tech giants, yet they cite privacy and security as their major concerns.

I think this KPMG study and article just shows how flexible younger generations can be with their banking and financial needs. Myself and others have a large range of differnet services we can pick from which allows us to be very flexible. Hopefully this will lead to a generation that is more knowledgeable with their finances.

 

 

 

https://home.kpmg.com/au/en/home/insights/2016/11/gen-y-banking.html

One of the mina points brought to us by Chris Skinner is his opinion that traditional banks are unable to compete with many of the specialists that technology has helped create. Banks are truly unfit to compete with many specialist firms in the sense that specialists have implemented systems have created far simpler financial activities. Today, larger banks have structures that are largely inflexible and can limit their ability to account for new trends and customer preferences. While banks continue to have a place in our financial world, Skinner wonders if banks will be relegated to “low-margin utilities” while smaller fintech firms deal with the customer relationship side of business.

One interesting point that Skinner brings up is the possible use of data by banks that right now not being used. It is still unsure how effective this data could be and whether it is even worth taking the time to analyze this data. In contrary to this article, I think banks should capitalize on the massive amounts of data they have. Banks should be making efforts to capture, understand, and act on the data left by their customer base. Ultimately, I think this could leave banks with better customer relationships and perhaps more business.

 

https://www.forbes.com/sites/tomgroenfeldt/2017/03/06/mobiles-blockchain-and-cryptocurrencies-can-expand-or-threaten-banking/#3955520e5789

This article discusses the idea that although many banks and financial institutions are looking into technological advances that could help stream line their services, bankers should not be completely worried that their jobs will be taken by artificial intelligence. People believe that artificial intelligence can be used as an encyclopedia in order to compliment the branch bankers. The information is already known by branch bankers will be multiplied with further access to an AI system.  AI can be implemented to automate repetitive tasks, yet many customers continue to seek in person help when  consulting about personal finance needs. Another benefit to AI would be that if they can handle these mundane work, bankers could be tasked to do more of the high service level work.

Overall, I do not fully agree with the point of view this article. While I can see how AI could possibly help branch bankers, I think that technological advances will continue to displace branch workers and others that do similar work. My generation sees less and less of a need to even go into a bank branch which is a trend I think likely will continue. There will continue to be new ways developed that will make their work replaceable.

https://www.americanbanker.com/news/why-branch-bankers-shouldnt-fear-bots

 

TransferWise is a peer to peer currency transfer service that has joined several other fintech firms in creating its own “Facebook Messenger bot”. Venmo was the first service to realize how social sending money to friends can be and others have begin attempting to capitalize on this finding. TransferWise believes this is a productive move as messaging services seem to be a place where people want and feel comfortable sending money with one another. Others obviously agree as PayPal, Stripe, Visa, MasterCard, and American Express have their own messenger bots. Services like Facebook would encourage these services to do add capabilities like this as it continues to increase the amount of use of the app by users.

Having these types of new services is extremely convenient way to send and receive money from friends and relatives. I  use Venmo multiple times a week and it has definitely simplified my life. However, it is a scary thought about how much private information many of these services now possess. We continue to sign up with more and more applications to make our life easier yet one would think this would lead us more vulnerable to losing our confidential information.

https://www.fastcompany.com/3068387/new-money/why-payment-companies-are-flocking-to-messaging-apps

I thought this was an interesting article as it talks about how bank tellers may become obsolete and replaced by technology. The amount of bank branches is decreasing in the US from 99,540 in 2009 to 91,861 in the third quarter of 2016. Bank of America has opened three small banks that do not have any employees, but instead they have ATMs and video conferencing to help customers with their banking problems. People can now use video conferencing solutions in order to determine how they should go about particular banking issues like a loan, mortgage, or even planning for retirement. Not just bank branches, but the entire financial sector are being strongly affected by the technology movement.

I would not be surprised to see extreme layoffs in bank branches in the next 5-10 years as I think technology can accomplish much of what they do. Why have those people sit around all day waiting for customers when you could rather have them advising people from all over the country. I think the banking industry will be disrupted by technology and the fintech that comes with it. Bigger banks must accept that my generation does not like cash, prefers online banking, and needs to have services on demand.

 

 

 

https://www.washingtonpost.com/business/economy/bank-tellers-are-the-next-blacksmiths/2017/02/08/fdf78618-ee1c-11e6-9662-6eedf1627882_story.html?utm_medium=email&utm_source=fintechweeklycom&utm_term=.b9570445edfa

 

      In this article, there is a discussion of why banks need to stop copying startups and start creating their own innovation model. Corporations are envious about how agile startups are able to innovate, yet should understand the large difference is goals between a startup and traditional bank. Larger corporations naturally act in far more in strategic and slow manner attempting to access mass markets. On the other hand, startups are trying to create as many different things as possible in hopes that every one in a million idea will gain traction. 

Corporations can not follow the lean startup model as a way to answer their innovation needs. Corporations using this model often end up wasting a lot of resources and capital that could be used more effectively elsewhere. One of the main findings that can help aid corporation innovation without blindly following the startup model is for big companies to understand what the customer wants and uses. After this is understood, creating a project around this becomes a better use of time and the chances of success is much higher. Banks need to find new ways to efficiently and effectively innovate in this quickly moving landscape.

 

 

https://www.americanbanker.com/opinion/rather-than-copy-startups-banks-need-their-own-innovation-model

While fintech continues to be adopted by more and more people, there are still a few challenges that fintech must face in order to be an accepted method for the mainstream public.  One of the issues are that many developing countries do not have the infrastructure or cloud services that are needed for many fintech firms to succeed. Another challenge for fintech services entering developing markets is that there is not much data for these companies to learn about their potential environment. With more data, fintech firms can make smarter and more advised decisions on how they can market and offer their products to developing communities.

Lastly, much of the world’s population are living paycheck to paycheck and do not see the need of the fintech’s offerings. However, fintech firms are continuing to adapt their product lines and services in order to successfully adapt to these new developing nations. I believe the rise of fintech can have a very positive affect on the people in developing countries, but there are a few issues that are currently in the way. However, I think fintech firms will continue to learn and tailor their business to fit the needs of these markets.

https://hbr.org/2017/01/fintech-companies-could-give-billions-of-people-more-banking-options

This article discusses the new wave of robo investor applications and how millennials are flocking to these environments in record numbers. Robo investors are able to give millennials an investing service much cheaper than the traditional financial advising system. Fintech has enabled these companies to create a low cost solution that does not require the large marketing costs that come with many of the traditional players. Millennials are using more of these applications because they are able to trust the technology behind it. There is a need for this area of fintech from Millennials as this generation has one of the highest savings rate of two thirds of the group putting more than 5% of their paychecks into savings. Millennials enjoy putting their savings into a service that will automatically invest, re-balance, and adjust their capital.
Many of my friends are avid users of these types of services that have a very intuitive user face and make setting up the service friction-less. I believe much of my generation will likely shy away from the mutual fund or high fee route in favor for a more ETF and index approach which is widely used by the fintech applications.

http://www.forbes.com/sites/hbsworkingknowledge/2016/12/07/why-millennials-flock-to-fintech-for-personal-investing/2/#727a16524f47

 

 

Technology continues to affect and change many industries including the financial sector. New fintech firms are putting pressure on many of the current titans of the financial service industry to evolve. Wall Street is being pressed to change as individuals have greater access through technology to alternate products that are usually seen as cheaper, more intuitive to use, and at times can give better returns. Mobile applications, portfolios that automatically re-balance, increased transparency, and new ways to track success are all new developments that are making banks and financial institutions lives a little more difficult. Fintech companies are at times able to create services and products that are better for customers with far less capital or employees.

Overall, I think the rise of money management fintech can allow people greater access to information, resources, and services that would not have been available decades ago. These fintech firms can even the playing field and hopefully allow people to save and invest money with greater ease. I also think that many investment firms, mutual funds, and other professionally managed firms will see a decrease in business in the coming years as there will be other cheaper ways to diverse one’s holdings.

https://www.bloomberg.com/view/articles/2016-06-08/fintech-is-ending-money-management-as-we-know-it

https://www.selectleaders.com/candidate/viewjobdetails.do?&jid=49138