Christian Goy - The Future of Digital Finance

Welcome. Thank you for having me quick show of hands. How many are you guys from? FinTech?

One, two. Okay. Traditional banks. Okay. A few less. Okay.

Well, you know, I actually had a video and Martin said you only have 20 minutes and if you don't switch off in 20 minutes, we have to carry off the stage. So I will be quick because we are in Germany, lots of regulations.

I, I had a video, anyhow, other videos very long. And I was talking about random rewards and interesting about random rewards. When they're given to consumers, they actually elicit loyalty more so than expected rewards. Not only among those who receive it, but also among those who observe interesting enough rewards are great. But the reality is why do we actually consume products? Why do we love products? Why do we value products? Because a much more important question. And before I go to answer that, I would like for all of you to get, I know it's early in the morning. It's kinda weird.

It's okay. Thank you very much. Is everybody up? All right. Okay. I'll put to start for quick moment. Can everybody hear me? Yeah. I would like for you to cross your arms. Alright. This feels comfortable. Right? Very comfortable. Very normal. Okay. Now I want you to cross your arms the other way.

Oh, weird. Right?

Strange, uncomfortable. You guys can sit down, keep this in mind. Keep this feeling in mind because this feeling you guys had is what a few people experience around the globe who are changing the way they look at consumers, because it is weird.

The problem today is that most markers are, think that by analyzing people's demographic, psychographic lifestyle, where they buy, how they buy, when they buy, they understand why they buy, but that's absolutely wrong because they really think by understanding that they know how you, my consumer truth be told the consumers who rethinking the way, why people do think they actually think about how people think in the hats. And that's what I'm going to talk to you about.

And I'm talking about three paramount things you need to understand that would give you some, let's say solutions, but also some examples. And then hopefully have few minutes for some question. So the first thing you guys need to know when people make decisions and we make decisions, we use actually multiple factors which have little or nothing to do with who we are well.

And the idea is based on the principles of behavioral economics, where we as consumers use multiple factors, cognitive, social, environmental, economic, altogether, to formulate how much money we are willing to pay, how we decide we need product, product, be what we expect value from the product or how the products fulfilling our expectation. A quick example is Starbucks. I don't know if you guys remember the first time you had Starbucks for me, it wasn't college. I know I'm that young. Thank you. But usually I get coffee from Pete's coffee. Shop down the street.

Pete was great because sometimes he gave me free coffee, which I love, but eventually they opened up the Starbucks down the street. So I walked down the street one day, found myself kind of intrigued, walked in, was shocked by the expensive prices. But since I was already in there lost a version, I decided, okay, fine. I will buy this freaking expensive cup of coffee, sat down, enjoyed it, and eventually left by the way, small coffees at all kinda weird. Okay. A week later, thirsty for coffee. I had to make a decision because I was walking down the street.

I had to decide between Pete or Starbucks. And that's where the principal of behave economics. But because now I have to decide, okay, which place to look at. And I'm thinking about the price of Starbucks versus speed. The distance five meters into Starbucks. How stand the street to Petes the psychological effect is how do I feel inside? How's it VAA treating me? How would be others? People see me drinking as very expensive cup of coffee, the brand, right. Very important. So I'm using all these factors and I'm creating the utility expectation.

And what I'm doing in my mind is I'm evaluating each element against the brand. I'm looking at to see what expectation these brands can fulfill. And not over you, you are creating utility expectation and also creating a certain order where some elements are, have more weight than others. And we do this all the time and I'm evaluating it. I go to into decision process. I go transaction, hopefully the brand of choosing Starbucks or fulfills my expectation I had in the first place in the order, I was expecting it. Right? And we do this with everything.

Whether it's buying, shooting, no idea, or buying a car, buying a gift for husbands or wives every time. And if you think back for a quick moment, if the product you actually want is not in the store, you linger longer and you go through the same process somehow. All right, that's the first thing you guys need to know. The second thing you guys need to know is although there's multiple factors for each product and services, people use them differently.

So we did the millennial banking study in America, a couple of years back and interesting to know millennials, hate banks, nothing new to you actually would rather go to a dentist than to banker, which is interesting now, but they told us these are the seven elements they used to choose their primary bank with a checking account. This is not about mortgage. It's not about a car loan. It's not about a credit card. It's about primary bank. These elements you guys see are Eli by a consumer themselves. We have a tool. We're not going to talk about it, which is really boring.

But these are the elements that are given to us. We did come up with that.

Cetera, cetera, cetera. Interesting though, knowing these things and if markets look at the millennials, they still think that millennials are the same because everybody think women 30 to 35 are all the same, right? Sure. You think the same truth be told it's not true.

Hello, welcome. It's not true. Looking at Martin and James, both identical twins, you got the same parents, the same income, same job, same hobbies. The way they choose they bank have it's different even. So they choose the sync bank and how this works. Let's assume Martin just moved to in my hometown. And he came from Frankfurt and he has to find a new bank. And he is bombard with messages from BES Fargo, chase bank of America. And how this works is that he starts this decision process on the left, moving to design. By the way, this is a simplified version of the decision process.

This is basically a psychological processes of using the formal decision. Usually it's a little more complicated, but for presentation purposes and what he does and the real world he's thinking about, okay? Which of these banks can satisfy form an expectation about move on online experience once Fargo chase.

Yes, Americans, terrible. He drops bank of America. He carries on credit cards while those have the same. Okay. He carries on fees. He thinks once Fargo has better fees than chase in his mind. Right? Cuz there's expectation. He drops chase. He thinks like through the service, all this other good ATM location and so and so forth. That's how Martin makes it. We're actually on the left. There's more weight, right? James on the other also picks what Fargo also moved to Austin because he loves his brother.

But the way he chose what Fargo is for totally different, he needed a credit card that allows him to travel the world for a service that he can access across Porwal fees that are limited ATM location. He can access, he read the care about the mobile experience, right? So that is number two.

So, so far we've learned we as human beings complex, as we are use multiple factors, we all use them differently. And the last thing you guys need to know when we've talked about the digital future, is that in order to create true value usefulness for the consumer, because that's what it's all about. When we're trying to sell something, you have to be useful. Three things need to happen. I need to see myself in the brand, the brand needs to reciprocate it and the brand needs to continue the relationship throughout. And what we mean by that is I need to see myself in a brand.

It doesn't mean I need to see myself in advertising. I don't need to see myself a Martin 35 year old, man. I need to see from you somehow that you first and foremost have the mobile online experience that I expect from you. Right? Even. So these other elements here, they all are there. But if you don't fulfill this primarily, I'm not even considering like bank of America. You didn't, I didn't see that you have the move on experience. I want from I'm dropping out my consideration system.

And if you think about it, like when buy a car, if that car is not has that thing, you're like, I don't want it the other day. I was thinking like buy a watch actually yesterday scaring is to know about scaring star is a Danish watchmaker. Very nice and neat. They came out with a new mobile watcher. Do you have one? Yeah.

Oh, you love it. I love it. Damnit. We need to talk afterwards anyway. So I wasn't a store, right?

I'm like, oh my God. It's so amazing. I wanna buy Aqua. And I haven't ever watch by the way, who has an ever watch it awful. Right?

No, you guys love it. Okay, good. Which is fine.

No, it's a great watch, but it's really painful when have to switch arm all the time. So, so I went in there, I'm like, oh man, I really love the swatch much. I can see myself in. And then I was standing, right.

I'm like, oh, okay. It has what I want.

Well, and they did a really good job in reaffirming that they have what I wanted by the Martin case. They told me like, Hey, I have the mobile online experience you want. And so and so forth. But then that's why not happen.

The Ben, the brand needs to reconfirm or continue to develop the relationship throughout. And what we mean by that is not only do they have to confirm that you have what I want. They also need to provide you when I'm buying. This has to fulfill my expectation. Not only on part each element, but hopefully exceed my expectation on each element to be valuable. So what that means is if I, I don't really wanna have a check income. I want to know. I want to learn how to fund it. I want to learn how to save money. I want to have a product that carries me around the world.

So what does all mean for you? And I have two examples and then I'm open for question. One example is Martin quick example, Martin just moved from Austin. Now he's moving to London. He needs new bank. Who's from London here. By the way. Hello? Who's from England, right? There's more. Okay. Welcome. By the way you guys know Manzo, right? Manzo. No.

Oh, awesome. All right. So Martin moves to London, by the way, in America, 16% of the millennial population thinks like this, which is roughly 27 million. So he moved to London and he said, okay, I need a bank. And he's like, okay, which of the banks, again, going to the primary has the mobile online experience I want. He looks around and it's a lot, but only one really fulfills this thing. And that is Monzo was primarily online bank established last year. And I had a privilege to talk to the CEO, Tom last year in New York. And I said, how do you go this banks?

Like, do you know what? I was really upset with banks? And I didn't have what they, I was like, okay, so you build an online bank and they can do everything online.

You know, pay your bills, get your checked, take a pictures and reward points. Every year in America expire, they expire expire 60 billion gone crazy, right? 60 billion Europeans, I think in the yard, he was actually the ya. That's a big sum. By the way, anyhow, a company came to us and said, Hey, we wanna create a credit card.

Like, okay, crazy. You create a credit card. They wanted to know how people actually give to charities and what we told them.

Well, by the way, people who look for banks actually look for credit card. So if you build a credit card, people in mind like James who gives to charities like this, you have to build a credit card that allows them to give to any charity they want. So what they did is they created a charity charity charge card that allows people to give 1% of every purchase inate to the charity school, church of their choice. So everything that purchase something, they bought this, they watch they not only please themselves. They also pleased the charities of the choice. So it's a win-win right?

So at the end of the day, and we are out of time, two minutes to go, one is getting okay, what do you need to do? Since we talk about the digital future, last point I'm going to make, you have to build a digital double. You do. That's where the future goes. If you understand how I think about mortgages, checking accounts, credit cards, you can give me explicit information that I want to hear. And you make me love you because that's the power. If you know, and you explicitly show me on your online, what I want to see, then I'm saying yes to you over and over again.

But if you don't, I'm getting frustrated because you don't give me what I want and going on a website and searching on where can I find my annual, your spending on what's five took me 10 clicks by the way, it's painful. So if you can explicitly show me what I want digitally and help me out every single time, then you fulfill utility patient. I'll have. And that's how you bring consumers in the future. Especially with AI that is coming. It's not going away. You have to start thinking like this. That's all I have. And I have no more minutes for questions.

Oh, thank you, Christian. So when you start your talk, I saw first off Martin. So Martin I'm very old school because I'm still using my very traditional bank.

And I, I work with the cumbersome online banking and brokerage tool. They offer to me. On the other hand, I had the other experience when I tried to, to set up another brokerage at another bank. And then I looked at the bank, the first statute on Bel. Then I ended up such a stack of paper to sign. That was where and said, Hey, why should I do it? Which they probably had to do to you to regulation regulations. On the other hand, it was the point where I said, Hey, then I can't stay with my standard bank. So any questions from you end and no questions from them to, yes, please, please.

So he made you move. So maybe one question, at least you should be a little bit more weight right now. Good question. Okay. Yes. Go ahead. Just to keep the ball rolling. So in terms of PSD two, thank you. So in terms of PSD, two banks already know what you're doing. They have the transactional data, they have everything.

And in terms of PSD two, with the aggregators, you will be able to patch data from the other accounts and be able to use like AI with the similar thing, with fiber, where we have the chat bot and we do the same thing, but you will be able to see how much money is actually spent. You see the habits and you're able to compose the offering based on that. So this is the actual takeaway from me from this side. Anything to add? Yeah. Yeah. Good. Very good point. Now now take it this step further, right?

What you see is what happens, where it happens when it happens, how much it happened, how often it happens, right? Like you don't know why it happens almost like big data. If you see what people see is like this tion gets bought together all the time. So for the marketers, I have to put them together cuz people more will buy it more. Right. Makes sense. Good for you. Good for the ROI. What you do not know is why do they buy these some conditions together? Is it for the hair, the shine of the hair, the strength of the hair. That's where it becomes important to create relevancy and purpose.

Because now you can talk to them of why you bought this thing. Why you, you need this offer. You're just throwing an offer there because you see constant transaction. But if you know that, if you know what, actually, if we reduce this fee, he will actually stay with us longer and he will buy more because we know why he's doing these things. So if right now I'm a feed purchase owner in a bank account, right. I come to you because you're the lowest fees and you see all the transaction, you know that I'm a fee shopper and you say, you know what, I'm gonna reduce your fees.

You might lose money, but in the end it would gain money because I will stick with you. And that's kind of the long term results, not just the short term results you see with big data. Right. Okay. Good question. Perfect. So I will be around all day. Exactly. And we have.