How To Create Transparency In The World Of Finance
In September 2016, America uncovered the secret Wells Fargo had been keeping since 2011.
The secret came out when clients began to notice unanticipated fees and receive unexpected lines of credit. Eventually, the mystery was solved. It was found that there had been top-down pressure from high-level management to open as many accounts as possible. This led branch workers to create fake accounts using the identity of existing customers without their consent, leading to unwanted fees and damaged credit scores.
We’re not here to figure out how it got that far. We’re here to talk about how, after $185 million in fines, Wells Fargo is still putting its reputation back together. This time, one built on transparency.
Their new campaign, from BBDO, features television, print and digital assets as well as a new tagline: “Established 1852. Reestablished 2018.” In fact, one of their video ads is entitled “Earning Back Your Trust.”
When we talk about trust, we usually talk about it in the context of our personal relationships. Not necessarily our financial institutions. But that appears to be changing.
According to their CMO Jamie Moldafsky, the campaign increased traffic to the company’s redesigned website. It already resonating with consumers “because the ad is very honest and transparent.”
The Importance of Transparency
It shouldn’t come as a surprise that we, as consumers, crave transparency from our financial networks. Whether from our bank, our financial adviser, our tax firm – we want to know our money is in trustworthy hands.
In the dictionary, transparency is defined as “characterized by visibility or accessibility of information.” In the business and finance circuit, transparency is defined as “financial statements of high quality.”
There is often so much obscurity and complex verbiage in the way finances are documented, simply because a lot of financial practice is obscure and complex. But this is not sitting well with consumers anymore – especially not since data breaches are becoming more and more common. When even financial institutions are subject to attacks, it should be a clear message to add levels of transparency that may have been missing before. Trust in institutions is more fragile than ever. Consumers want to know exactly where their money is going, and to whom, and for how long.
The Role of Technology
There is a third wheel in the relationship between transparency and the world of finance: Technology.
Fintech and the Disruption of Finance
Let’s briefly discuss the collision of technology and finance, or ‘fintech’, with one poignant example: Ant Financial Services.
Ant Financial Services Group is a “fintech” company with an online payment app used by more than 600 million and a valuation of $150 billion. Aside from the mobile and online payment platform, Ant Financial offers the largest money-market fund in the world, runs the Sesame credit rating system and created a facial recognition payment technology.
It would appear its popularity and admiration is not limited to the simplicity of its financial handling – In 2017, they ranked sixth on Fortune’s Change the World list – their innovation in finance was recognized for its positive environmental impact.
The Financial Times went so far as to say that Ant Financial represented the “upending of finance by digital disruption.” They expect that a blur in the dividing line between finance and technology will ultimately lead to “widespread sectorial consolidation.”
These ‘fintechs’, as they are known, are “developing a sophisticated asset management model and eliminating the need for asset managers and analysts,” according to Sajid Rahman for Medium.com. According to his analysis, the likelihood of AI eventually showing better portfolio management than a human is likely. And because they require lower fees and balance requirements, they have gained a large millennial customer base.
Using Technology as a Tool for Transparency
In May 2018, Information Age discussed the role of technology in the finance and banking sector side of things. They point to three main elements of our personal finances that were directly affected by technology: Customer service, online banking and fraud detection.
Here, we’re going to focus on customer service technology and the ways it will shape finance.
There are few words to describe the frustration that comes when all you want is to talk to a human and can’t. Automated banking is convenient in some ways but enraging in others.
Chat support, if it’s done well, offers huge benefits. Rather than waiting til business hours, which are usually when the rest of us are at work too, customers can get answers immediately and follow-up in real time.
Although there are some signs pointing to AI replacing humans, experts say not quite yet. It can be useful to address basic questions and concerns, but companies have transitioned the humans who used to answer those basic questions to answering more complex ones.
AI has also become an asset to employees as much as to customers. Machines can support agents during their conversations with customers to maintain a sense of transparency and accuracy.
The Mobile Phone
According to Shep Hyken for Forbes, the mobile phone still is and will continue to be the best way to connect and interact with your customers.
“Just about everybody has a mobile phone,” he says.
It goes two ways – between you and the consumer, and between the consumer and you.
When a consumer downloads your app or shares their number, you have a unique opportunity to connect with them.
In contrast, a mobile phone that doesn’t drop calls or interrupt service is just as vital for financial agents and advisers.
As automated as the world becomes, it’s worth noting that we are in the “Era of the Customer.” Customers are more informed than ever before, and expect a level of transparency clearer than ever before. They expect their experience to be seamless from start to finish. Interruptions like a dropped call or static become complaints. Complaints, then, require a way for the company or agent to make it right, make the customer happy and restore a level of trust.
In addition to this, BYOD (or bring your own device) expectations becoming the norm for finance professionals.
A solution for this is software like Arbeit Voice, which allows for true mobile integration to a desk phone. Their office phone system integrates with the majority of the latest mobile phones to act as an extension of your desk phone, consolidating your minutes spent on the phone or utilizing a mobile hotspot onto one bill. Because they use their own top-tier carriers, calls are never subject to drop or experience interruptions. VoIP phones like this are likely to become the norm.
Crowdfunding platforms have achieved the “platform based, capital light” balance by connecting start-ups and “investors,” or potential customers. This kind of technology has led to extreme transparency in finance. Customers can sway the success of a business using their own money, rather than handing it over to investors.
Customers are looking for transparency and reliability more than ever before. Technology that allows them to achieve it is becoming increasingly available. Financial institutions will need to accelerate their technology to match the needs of their customers or fall behind.