Fintech News: December 9th, 2016

This week in fintech: Transforming financial UX in 2017, a changing regulatory environment and what it means for financial advisors, the Fed expresses interest in Bitcoin and Blockchain:

10 UX Design Trends for 2017 (The Financial Brand)

As financial institutions become more customer-centric, their UX is becoming more important. Notably, UX in 2017 will be transformed by deeper understanding of financial psychology, mobile domination, increased personalization, and alternative UIs: think chatbots, intelligent assistants, and VR technology.

What Advisors Can Expect from Fintech Next Year (Investopedia)

In the last year, advisors have been scrambling to comply with fiduciary rules, using new tech solutions. Donald Trump has promised to dismantle Dodd-Frank and fiduciary rules, which requires all financial advisors to act in their clients’ best interests. However, FinTech continues to build solutions for advisors to become fiduciaries. Despite Trump’s promises, the overall long-term trend is still heading towards consumer protection.

Regtech thrives on change: welcoming Trump, Brexit and China (Daily Fintech)

RegTech, also known as FinTech’s homely cousin, is making back-office financial services more efficient, replacing old legacy infrastructure. In the US, less regulation will not necessarily mean less RegTech, since any change in existing laws opens up new opportunities and clients for RegTech solution providers.

Fed Outlines Approach to Monitoring Fintech (The Wall Street Journal)

On Monday, the Fed released research on the future of Fintech regulation. While it contained no firm policies, it underlined the need for more studies especially on Bitcoin and Blockchain.

Fintech News: December 2nd, 2016

This week: what the election means for Bitcoin, the promise of chatbots for fintech, and seven signs the industry is maturing:

How Trump Became Bitcoin’s Unlikely Savior (Payments Source)

Last year, as banks started using blockchain, the underlying technology of Bitcoin, it seemed like the currency’s spotlight was fading. Then, Trump was elected. His promises to close off cross-border remittances have caused new spikes in Bitcoin volumes and the price has rallied over 10% since election day.

Bracing for Seven Critical Changes as Fintech Matures (McKinsey)

As the fintech industry and its regulations mature, startups are becoming more cautious, forming more B2B partnerships, and consolidating by selling to larger incumbents. On the horizon, there will be lots of new opportunities as new digital ecosystems develop and the trove of customer information continues to grow rapidly.

Walk, Don’t Run, Toward the Fintech Bot Revolution (VentureBeat)

Finance executives are buzzing about Chatbots – but customers are not. Customers don’t want to talk to a bot, they want to be supported and helped with their needs. Right now, most bots are only able to do this with a highly specific expectations. Letting them operate outside these boundaries usually damages the customer satisfaction. So financial services should start small, by automating simple tasks with clear start and end points. As the bots’ underlying tech improves, they can allow them to take over more complex tasks.

Addicted to Stocks: Completing the Financial User Hook

In the past fifteen years, content for DIY investors has taken off. To continue growing into household names, these platforms must leverage behavioral science, using the methods of Facebook and Twitter to get users hooked on their platforms.

Free websites and mobile apps have democratized the stock market, giving DIY investors tools that were previously reserved for institutional investors at hedge funds and big banks. While the number of these platforms has skyrocketed, the market remains highly fragmented, with many smaller players struggling to grow. Yahoo! Finance remains one of the top resources for investors, thanks to its most important innovation: the “watchlist” feature, which keeps its millions of users sticky to the platform, some ten years after they built their first watchlist.

hooked.jpgSince 2005, hundreds of new content platforms have popped up, but none have managed to grow into household names. So why is there is no “Facebook of finance?” The answer involves a bit of behavioral science.

Right now, the #1 bestseller in product management is “Hooked: How to Build Habit-Forming Products.” It identifies the “hook” that gets users addicted to platforms like Facebook, Instagram and Pinterest, to the point where they check these sites as soon as they have a moment of free time. This simple feedback loop consists of four steps:

  1. Trigger: something that gets the user onto the platform
  2. Action: A user-initiated action that anticipates reward
  3. Variable reward: leaves the user wanting more
  4. Investment: a reason for the user to seek another trigger (Repeat cycle)

For any stock-market content, the hook looks more like this:

image-14

  1. Trigger: finding a stock they want to buy
  2. Action: buying that stock
  3. Variable reward: watching its value go up or down
  4. Investment: searching for a new winning stock (Repeat cycle)

The good news for financial publishers is that step three takes care of itself. Once the user buys a stock, its value is bound to go up or down and provide a variable reward. The bad news is that to take action, the user must leave the publisher platform complete a trade on their broker’s platform.

Because of this, the user subconsciously attributes both the action and the variable reward to their broker, even though the publisher provided the original trigger/trade idea. By requiring their users to take action on another platform, financial publishers are missing out on the full value of their content. Additionally, user departure severs the “hook,” deactivating the addicting feedback loop that leads 1/5th of the planet to log into Facebook every day.

To build a base of sticky & engaged users, financial publishers must reclaim the user hook with a bridge to action. By offering the ability for users to transact and manage their portfolios, financial publishers can become the one-stop-shop for stock market research, transactions and monitoring of returns. In other words, they can reclaim the Action and the Variable Reward, igniting the “hook” and building a base of users who can’t beat the urge to keep returning to their site.

Financial publishers work hard to create triggers. It’s time they use a bridge to action to finally get their users hooked.