Time Trials: Mobile Account Opening

As millennials mature, so do their financial needs. What isn’t changing, however, are their habits. This generation checks their phones up to 150 times a day. They shop, bank, and pay their rent on their phones, so they expect everything to work from mobile. To attract these young customers, financial service firms face a cutthroat timeline: become mobile-friendly or become irrelevant.

At a time of high acquisition costs for brokers, new account abandonment is a huge drain. Research shows that brokers lose 23% of their potential new clients over mobile, and ease of navigation is a leading cause of this abandonment.

With this lost opportunity in mind, we conducted user time trials to see how long it took to open a new brokerage account. With the existing options from major US brokers, users took 6 minutes and 17 seconds, on average, to open an account. Some brokers’ products took users up to 12 minutes to complete.

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From a usability standpoint, the broker offerings were disappointing. Users complained about having to reenter the same information, too many optional entry boxes, non-responsive sites, and too many questions on each page.

Other users simply lost patience. With no indication of their progress in the application, they had no idea if they were 10% or 90% done. The process asked too much information, and many users said they would probably abandon the application.

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In the end, the fastest broker was met with the least resistance from users. The distribution of questions between pages might hint as to why. It wasn’t necessarily the number of questions that bothered users, but the daunting experience of staring at 20 blank fields to fill out all at once. Breaking up the application into more manageable steps kept users calm and engaged.

With clunky account opening processes, brokers are missing out on new customers and assets to manage. There’s room for improvement for mobile account opening, and the opportunity continues to grow as the investing world turns mobile.

FinTech News: February 26th, 2016

This week in FinTech: a pessimist’s and an optimist’s view on fintech’s future. South Korea’s KakaoTalk adds a fifth product to its fintech toolbox, why we need buy and sell buttons, the Vanguard effect, and JPMorgan’s quietly growing tech programs.

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Skim, Dip, & Dive: Bloomberg Did It First

One of the world’s most innovative social networks has been running strong since 1982.

It’s not an app you check multiple times a day, and it doesn’t have a sleek, minimalist interface; it’s the Bloomberg Terminal, the platinum standard for financial research, trade execution, communication & messaging. While the service is known mostly for its electronic trading platform, it deserves credit for pioneering the way we communicate and process information. Bloomberg had advanced chat capabilities and a modern “newsfeed,” years before Twitter ever dreamed of it. For the next big thing in social networking, Silicon Valley might want to take a peek at the Bloomberg Terminal.

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Can’t make it to work? Bloomberg Anywhere works across devices.

Even though a Bloomberg subscription costs $20,000 a year, financial services firms can’t seem to cut the cord. Much of the information it provides can be found elsewhere for much cheaper. However, there are powerful network effects from its most popular feature and the world financial community’s favorite chat tool: Instant Bloomberg. Last week, we wrote about how China’s WeChat is more advanced than its American counterparts, but with a hefty suite of features, Bloomberg is already running circles around WeChat, Facebook, and Twitter.

From the Bloomberg terminal, the opportunities to collaborate with the 325,000 other professional subscribers generate powerful network effects. Beyond chat, these features extend out of the office. Without leaving the interface, Bloomberg subscribers can:

  • access restaurant & hotel reviews
  • book a table, book a room, book a flight
  • share live charts, trade ideas, analyses, lists, and news with colleagues
  • collaborate across companies & countries
  • access cultural and event calendars
  • buy & sell merchandise

In addition to messaging, Bloomberg was first to the playing field with the “News Feed,” now ubiquitious on popular social networks. By pulling real-time news from over 90,000 sources around the world, Bloomberg makes sure their subscribers can get the big picture, check for more details when they need, and stay on top of market-moving news. Need to search by company, topic, region? You could do it on Bloomberg before the #hashtag even existed. Bloomberg has been refining the feed and the “skim-dip-dive” paradigm since 1981, and judging by the financial results, others should take note of their strategy.

The Bloomberg Terminal is not a household name, and unless you work on Wall Street, you’ve probably never even seen one in person. However, in the investing world, a small addressable population can still carry a huge financial opportunity. The revenue speaks for itself. Today, the Bloomberg Terminal generates an estimated $7.8 Billion annually, enough to support and develop Bloomberg’s behemoth media presence.

While Bloomberg tackles a niche market, it is clearly full of product secrets that can tell you what works, what makes money, and what the future holds for the general population. If you’re looking to stay relevant in the quickly evolving tech sector, you might want to take a closer look at the Bloomberg Terminal.

FinTech News: February 19th, 2016

This week in FinTech: which companies are targeting millennial customers, consolidation is looming and that’s good for everyone, lots of new funding for investing technologies, and regulatory issues for partnerships.

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Source: CBInsights

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FinTech News: February 12th, 2016

This week in FinTech: winners and losers in a bear market, roboadvisor leapfrogging, more drama with Twitter’s core users, how millennials are investing wrong, and more. Continue reading

Looking to China: What Facebook and Snapchat can learn from WeChat

As Asian multipurpose messaging apps take off, Facebook and Snapchat are looking east for inspiration.

As they surge in popularity, messaging apps like Snapchat, Whatsapp, and Facebook Messenger are looking for new ways to make money. With a primarily young and tech-savvy customer base, these apps are unable to rely on traditional ads or subscription fees. Instead, they are beginning to integrate third party business services into their platforms, a strategy dubbed “conversational commerce.” While this strategy is relatively new in the US, this is not the case overseas. In China, Tencent’s WeChat app keeps its users engaged with a bundle of in-app services, a strategy that US messengers are slowly gravitating towards.

WeChat: The Ultimate Bundle

Compared to a “Facebook-Whatsapp hybrid” or a “Twitter on Steroids,” China’s WeChat app has so many features that it could almost be considered its own operating system. Its premiere feature is messaging, but it also offers online shopping, on-demand services, news articles, restaurant reviews, mobile payments, games, stickers, and status updates, all from within the app. For its users, it serves as an iMessage, Newsstand, Yelp, PayPal, Amazon, Uber, CandyCrush, E*Trade and SnapChat all on its own. WeChat users can engage with the Chinese versions of any of these businesses without leaving the app.

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Each time a user is prompted to use one of these paid services, WeChat makes money. As such, it measures success not on its number of users, but on the degree to which its app penetrates all aspects of their day-to-day lives. By integrating news articles, group chats, a payments platform, games, e-commerce, and car services into its app, WeChat keeps its users coming back to the app from the moment they wake up until they go to sleep. In the United States, where many apps pride themselves on doing only one thing, messaging apps are bucking the trend and starting to mimic WeChat’s strategy.

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Source: Statistica

 

Snapchat Leading The Way

In the US, Snapchat pioneered conversational commerce through the “SnapCash” and “Discover” features. Snapcash allows users to send each other money through a partnership with Square, the payments startup. The Discover feature allows media publishers like MTV, Buzzfeed, and the Wall Street Journal to purchase a spot for their “story” on the discover page, allowing them to connect with Snapchat’s younger demographic and promote their content.

 

Snapchat iphone.pngThe Discover feature blends in with Snapchat’s existing UX, as users view a company’s “story” in the same way they would view their friends’ stories. With this design, Discover presents itself as an entertainment feature for users, while Snapchat makes money on the other side of the screen.

 

Snapchat’s popularity with millennials is one of its biggest value props: 60% of 13 to 34-year olds use Snapchat. It has already attracted attention as a potential investment platform, with 57% of investment advisors saying it could “absolutely” become a space where millennials learn invest in stocks.

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Source: GuideVine

 

Facebook’s Vision

messenger-uber-request-ride.pngMark Zuckerberg has made it clear that he’s a believer in messaging: last year, he siphoned off Facebook Messenger as a separate product from the social network and dropped Whatsapp’s $.99 annual fee for its 900 million users. Starting with stickers and GIFs, Messenger has built up its feature base and is now testing payment and e-commerce capabilities for its users. The app’s strategy was well exemplified in 2015, when Messenger started allowing users to call an Uber directly from their chats.

 

David Marcus, the head of Messenger, sees an opportunity for businesses to use messenger to connect with customers in a more natural way. Down the road, e-commerce can be built into the messaging experience as smoothly as it has with WeChat. By making transactions easier, Marcus is betting on driving sales for businesses. For example, a customer can message a customer service rep: “Hey, I really like that T-shirt. Can I have three more?” and receive an order confirmation minutes later.

 

A Widening Service Network

As these apps expand their networks of services, we see an opportunity for investing within messengers. Younger generations grow up accustomed to messaging apps, so integrating brokerage services into these apps will be the best way to keep them engaged.

For apps, it’s difficult to monetize information, but easy to monetize actions. For this reason, messaging platforms are rapidly integrating actionable features to make money without showing ads to their users. By adding trading to their list of features, messaging apps can turn a trade idea into an actual trade, and engage a younger generation who is used to having everything at the push of a button.

Social Networks: A New Resource for Investors

Social networks for investors are gaining popularity, but what are the core features? Our review and features matrix will help you find the best social investing app for your goals.

In retail investing, social is a hot new concept. There are dozens of startups seeking to build the Facebook of finance and striving to become household names. At the same time, Facebook and Twitter are inching towards the financial sphere, starting with peer-to-peer payments. If these networks decide to push past payments into social investing, the startups will have to beat them at their own game.

Who are social investing apps? There are countless names in the sphere that all share a few common features to harness the power of social networks for investors. These apps’ most popular features are crowdsourced stock ratings, trade-centric newsfeeds, portfolio sharing and billionaire mimicking.

The Wisdom of the Crowd

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ClosingBell’s crowdsourced estimates page for $GPRO stock.

Networks like Estimize, ClosingBell, and Vetr provide stock ratings & predictions by drawing on the “wisdom of the crowd.” Using algorithms that take weighted averages, they consider analyst, trader, blogger, and individual investors’ expectations for a particular stock. These predictions are often more accurate than individual “experts” because of the wisdom of the crowd.

Feed-Centric

The largest social trading network is StockTwits, which has around 600,000 monthly average users. StockTwits’ interface looks just like Twitter, complete with a feed, ability to follow, and ability to search by stock ticker symbols.

Truly Social: Open Investing

If StockTwits and InvestFeed are inspired by Twitter, then Openfolio and Nvestly are inspired by Facebook, the preferred social network of over-sharers worldwide. These networks allow users to sync their portfolios and share their % allocations (never dollar amounts) with their network. This allows users to look at their existing network for trade ideas and strategies.

 

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iBillionaire lets you see well-known billionaire portfolios and copy their strategies.

Learn from the best & brightest

One way to become a billionaire is by copying other billionaires. Apps that copy high net-worth investors like Warren Buffett and Carl Icahn have grown in popularity. Some of these include iBillionaire, MeetInvest, and Covestor. These apps have received a fair amount of criticism from skeptics, but they are helpful tools for new investors looking to develop a strategy.

Which of these apps will take off? It’s still too early to tell. As with other social networks, they will need to keep their users engaged with addicting features like the “like” button. As an extra challenge, Facebook and Twitter eyeing the sphere as a potential moneymaker. If these giants do try to enter social investing, the existing startups will have to beat them at their own game. Otherwise, social will go finance before finance goes social.

See our Social Investing feature matrix below to discover which might be right for you.

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FinTech News: February 5th, 2016

This week in FinTech News, we take a look at which areas in finance are ripe for innovation in 2016. What do big digital budgets mean for banks, and how do they explain tech investments to analysts? Why do some FinTech startups fail, and who raised money last week? Continue reading