Matt Wilcox Pro

“Get ready,” Forbes advises China, Egypt, and Mexico. Contributor Madhvi Mavadiya writes that it won’t be long before “… access to financial services will be simplified and made more available to the unbanked and underbanked in these three regions.”

This important development is thanks largely to the efforts of the World Bank Group, the Bill and Melinda Gates Foundation, the International Telecommunication Union (ITU), and the Committee on Payments and Market Infrastructures (CPMI).

In a press release issued a few days ago, the World Bank announced:

A new global program to advance research in digital finance and accelerate digital financial inclusion in developing countries, the Financial Inclusion Global Initiative, has been launched … The three-year program focuses on three different “model” developing countries—China, Egypt and Mexico—and consists of two complementary operational and knowledge work streams.

This raises two questions. The first question is, Why bring digital banking services to developing countries? The Gates Foundation provides a compelling answer:

A growing body of evidence suggests that access to the right financial tools … can determine whether a poor household is able to capture an opportunity to move out of poverty … In fact, research has shown that the most effective way to significantly expand poor people’s access to formal financial services is through digital means.

The World Bank agrees. According to its website,

Around 2 billion people don’t use formal financial services and more than 50% of adults in the poorest households are unbanked. Financial inclusion is a key enabler to reducing poverty and boosting prosperity.

The second question is, Why China, Egypt, and Mexico? In the above-referenced press release, the World Bank reports that

… Egypt has the potential to bring a large number of people into the formal financial sector (more than 44 million adults). These analyses found that Egypt has adequate laws, regulations and financial and ICT infrastructure, but a lack of funding to cover related reforms.

… China has an increasingly well-developed legal and regulatory environment and financial infrastructure, as well as a supportive ICT infrastructure …

… Mexico has shown a strong commitment to financial inclusion with its new National Financial Inclusion Strategy … as well as a draft fintech law … [and] has the potential to become a regional and global model … despite relatively low levels of financial inclusion.

In large measure, it is thanks to the advent and subsequent ubiquity of mobile technology that has made this altruistically motivated effort possible. In a speech at the Asia-Pacific Digital Societies Policy Forum 2017, ITU Deputy Secretary-General Malcolm Johnson said that an estimated two billion adults worldwide have no in-person bank account access, yet of those a surprising 75 percent have access to a mobile phone.

The World Bank, which spearheads the Initiative, began life in 1944 as the International Bank for Reconstruction and Development. Its original goal was to help war-torn countries get back on their feet in the wake of World War II. Over time, that mission expanded to that of providing funding and knowledge for developing countries in general. Today, the World Bank has two stated goals, both to be achieved by 2030: To end extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3 percent; and to promote shared prosperity by fostering the income growth of the bottom 40 percent for every country.

With every Siri, Alexa, Google Assistant, and Cortana upgrade, conversations about AI—artificial intelligence—inevitably arise. Also inevitably, out roll the usual questions from definitions to ethics, usually set against the backdrop of a dystopian future. But in the here and now, the growth and status of AI-like applications portend no small developments for the financial services industry.

The above-referenced ethical questions often have to do with whether a machine with humanlike sentience should be accorded human rights. These sometimes sprout from fanciful views such as those held by computer scientist, inventor, author—and would-be futurist—Ray Kurzweil. His bona fides as an inventor and computer scientist are well established, but Kurzweil-as-futurist waxes a bit over the top. In a 2005 TED talk, Kurzweil predicted that in 2029 nano bots will …

… go inside our brain, interact with our biological neurons … shut down the signals coming from your real senses, replace them with the signals that your brain would be receiving if you were in the virtual environment … a tremendous expansion of human intelligence through this direct merger with our technology …

I kinda doubt it.

Some equate AI with a machine’s ability to pass the Turing Test. The 2014 movie The Imitation Game made the late mathematician Alan Turing a household name. Turing famously proposed a test wherein an unseen machine would exchange notes with a human. If the machine could convince the subject that it was a human, it would be reasonable to say that it was capable of imitating human thought.

There’s an important distinction to be made: Imitating human thought isn’t thinking. But there are many who argue that AI needn’t necessarily invoke an Isaac Asimov-esque threat from cyborgs or even pass the Turing Test. For that matter, AI needn’t be good at all things. It can be good at just one thing.

Take apps like the above-referenced Siri, Alexa, Google Assistant, and Cortana. They are by no means sentient, nor are they capable of reasoning, but they are great at recognizing human speech across multiple languages (according to MacRumors, Apple leads the pack with “21 languages, localized for 36 countries”) and, to a point, learning how better to interact with users. Considering regional accents and the many ways we humans can express the same thought, that’s no small feat. But then, last year Siri alone had 2 billion users requests—per week—at its disposal for analysis.

Self-driving cars are also an arguable foray into AI. They must make decisions that look like thinking—the programming this requires is beyond me—but there will likely be no self-driving car apocalypse when a Smart car suddenly lives up to its name and organizes its fellow vehicles to take over the world.

Most important for our purposes, today you can order
Alexa to help with basic banking transactions …

… which Extractable’s Chief Analytics Officer Mark Ryan happens to see as the beginning of a trend. He wrote in an article for The Financial Brand,

In the next 5 to 10 years, we will most likely see Web traffic to banking sites and mobile applications drop by over 50%. We know that an average of over 50% of the traffic to online banking through browsers and mobile applications is there to perform the simple task of checking a balance and then leaving.

As voice recognition and voice authentication mature, banks will be able to offer customers the ability to perform their most common banking tasks such as checking balances by simply talking to an Internet-connected device (i.e. car, television, watch). The integration of more voice devices (and WiFi connections) in automobiles may be one of the major tipping points.

If Ryan is right, then voice-activated banking might be the nearest thing to an AI apocalypse on the financial services horizon. But “apocalypse” is a bit melodramatic. After all, digital banking was no apocalypse. It was just one heck of an opportunity, and the banking industry is doing a good job of seizing it. I suspect we’ll do the same with voice-activated banking.

CERTAIN MARKETING tactics, legal though they may be, can be troublesome. Today’s ambivalence du jour concerns direct voicemail messaging. 

As its name implies, direct voicemail messaging sends a prerecorded message straight to voicemail. Since phones do not ring and charges for minutes do not rack up, Do Not Call laws don’t apply. 

Companies that provide the service for generating leads claim (what else would you expect?) that direct voicemail messaging is effective. 

Fine, but sometimes there are other considerations, e.g., it can come across as sneaky.  

For one thing, consumers cannot block direct voicemail messages. For another, just look at the names of selected service providers. Names like Voicecasting might sound innocuous enough, but the field also includes gems like Slydial, Slybroadcast, and Callfire. 

Direct voicemail messaging appears to enjoy some popularity among financial institutions: 

The most frequent users of Ringless Direct-To-Voicemail are Debt Collectors, Financial Institutions and Student Loan Servicers. 

That excerpt comes from the Do-Not-Call Protection website, whose motto is “We help business to business, business to consumer and single-agents to comply with the Do Not Call Laws and Telephone Consumer Protection Act.” They’re not a consumer advocacy group, so by “helping to comply” they more likely mean “avoiding legal hot water” than “avoiding being annoying to consumers.” 

As I write, Direct voicemail messaging is facing new legal challenges. The New York Times reports: 

Regulators are considering whether to ban these messages. They have been hearing from ringless voice mail providers and pro-business groups, which argue that these messages should not qualify as calls and, therefore, should be exempt from consumer protection laws that ban similar types of telephone marketing. 

But consumer advocates, technology experts, people who have been inundated with these calls and the lawyers representing them say such an exemption would open the floodgates. Consumers’ voice mail boxes would be clogged with automated messages, they say, making it challenging to unearth important calls, whether they are from an elderly mother’s nursing home or a child’s school. 

… The commission is collecting public comments on the issue after receiving a petition from a ringless voice mail provider that wants to avoid regulation under the Telephone Consumer Protection Act of 1991. That federal law among other things prohibits calling cellular phones with automated dialing and artificial or prerecorded voices without first obtaining consent—except in an emergency. 

The United States Congress appears divided on the matter. (Congress divided? I know, you’re shocked.) Ars Technica reports: 

In March, a marketing company called All About the Message petitioned the Federal Communications Commission for a ruling that would prevent anti-robocall rules from applying to ringless voicemails. But the company withdrew its petition without explanation in a letter to the FCC last week, even though the commission hadn’t yet ruled on the matter … 

The Republican National Committee supported All About the Message’s petition, claiming that it has a First Amendment right to use direct-to-voicemail technology without any TCPA restrictions. Senate Democrats opposed the petition, saying that it would allow “telemarketers, debt collectors, and other callers [to] bombard Americans with unwanted voicemails, leaving consumers with no way to block or stop these intrusive messages.” 

I won’t wax partisan here, but I will point out that legislated regulations often overshoot, piling on onerous requirements no one had counted on. If you don’t believe me, I’d suggest brushing up on Dodd-Frank.

I’ll also point out that self-regulation is one of the best ways to avoid onerous government regulations. That’s why organizations like the Data & Marketing Association (DMA) urge members to police themselves. “These guidelines,” reads the introduction to DMA Guidelines for Ethical Business Practice, “represent DMA’s general philosophy that self-regulatory measures are preferable to governmental mandates.” 

From a marketing standpoint, I return to my above assertion that direct voicemail messaging, especially for lead generating, can appear sneaky. Upon finding a directly deposited voice mail message, many consumers react with How did that get there? instead of I’d better pay attention to this message. 

Unless you’d like We’re sneaky to become part of your brand, you might think twice before using direct voicemail messaging.

Returning from a camping trip, Henry Ford, yes, that Henry Ford, saw a farmer repairing a car. That the farmer’s car wasn’t a Ford didn’t stop Henry, an irrepressible tinkerer, from hopping out of his own car, which was a Ford, to help. In no time the farmer’s car was running again, whereupon the farmer offered to compensate his unknown assistant. Henry declined, adding that he had all the money he needed. “Hell,” said the farmer, “you can’t have that much and drive a Ford.”*

That couldn’t happen today. Today, the more likely protocol would be to tow the car to a dealer, who would connect a computer to a port in the car, and then say, “You need a spark plug.”

I’m exaggerating only a little. Take, for instance, what has quite possibly been the farmer’s most trusted brand for 180 years: John Deere. The days when you can haul out your wrenches and have your conked-out John Deere tractor working again are numbered. Newer Deeres require the use of a special diagnostic tool that farmers aren’t allowed to own. Per an article by The Guardian’s senior technology reporter Olivia Solon:

Only manufacturers and authorized dealers are allowed that tool, and they charge hundreds of dollars in call-out fees to use it.

Not only that. The days when you can call the conked-out tractor yours are also numbered. In much the same way that you don’t own the songs you “purchase” from iTunes or the books you “purchase” on your Kindle or Nook—you merely have licensed access—John Deere contends that farmers don’t really “purchase” Deere equipment. In an article for Wired entitled “We can’t let John Deere destroy the very idea of ownership,” Kyle Wiens wrote:

It’s official. John Deere and General Motors want to eviscerate the notion of ownership. Sure, we pay for their vehicles. But we don’t own them. Not according to their corporate lawyers, anyway.

In a particularly spectacular display of corporate delusion, John Deere—the world’s largest agricultural machinery maker—told the Copyright Office that farmers don’t own their tractors. Because computer code snakes through the DNA of modern tractors, farmers receive “an implied license for the life of the vehicle to operate the vehicle.”

It’s John Deere’s tractor, folks. You’re just driving it.

Before you hurry out to picket John Deere, you should know they’re not alone. You may have noticed from Wiens’s article that General Motors sides with Deere. In his article “General Motors, John Deere want to make tinkering, self-repair illegal,” Extreme Tech writer Joel Hruska observes:

GM, meanwhile, alleges that “Proponents incorrectly conflate ownership of a vehicle with ownership of the underlying computer software in a vehicle.”

Not that farmers are taking this sitting down. Last week, TIME’s deputy tech editor Alex Fitzpatrick wrote …

… farmers nationwide have banded together in support of the so-called Right to Repair legislation. These bills, which have been proposed in at least 12 states, would require equipment manufacturers to offer the diagnostic tools, manuals and other supplies that farmers need to fix their own machines.

To which Deere spokesman Ken Golden replied:

Customers, dealers and manufacturers should work together on the issue rather than invite government regulation that could add costs with no associated value.

Which sounds great in theory. Trouble is, when those in power say Let’s work together, sometimes it really means You little guys need to see it our way. Indeed, the legal course Deere et al are taking could easily be seen to err in that direction.

And now, in a case of unlikely bedfellows, Apple has joined the fray.

So has AT&T, and they’re siding with Deere and GM. Fitzpatrick continues that the Right to Repair movement …

… has come up against an unexpected opponent: Apple. The iPhone maker and world’s largest public corporation by market capitalization has been lobbying state lawmakers in opposition to the bills. The argument … is that they could result in subpar repair work or … make consumers vulnerable to hackers.

But …

Right to Repair advocates say that Apple … wants to maintain control of its share of the approximately $4 billion smartphone-fixing business … Apple makes an estimated $1 billion to $2 billion a year fixing iPhones compared to approximately $120 billion to $200 billion selling them.

I see legitimate arguments on both sides. It’s reasonable that consumers want the right to repair their own stuff, including the right to ruin it. Yet the tangled world of copyrighted codes introduces legal nuances that consumers may not fully appreciate. Moreover, when consumers tinker with and ruin their purchased products, it can take only a matter of hours for the social media to cast the manufacturer as the bad guy.** I’ll be interested to see how this plays out long-term.

________________________

* From The People’s Tycoon by Steven Watts. Knof, 2005

** A dry cleaner who ruined a friend’s necktie tried to blame Nordstrom for selling him “a tie that can’t be dry cleaned.” Yeah, right.

Is this how clients react to your brand?

NOWADAYS it’s a fairly easy matter to infuse digital banking with brand trappings like logos, colors, and consistent font use. But that’s not all there is to branding.

At least, not anymore. Today there’s this thing called brand personality. And while you can train tellers to smile—well, you can try—making a smartphone smile is another matter entirely. (Emoticons? Give me a break.)

Branding began as a simple thing. Before literacy became fairly common in the U.S., marketers drew inspiration from cow butts. Why they were looking at cow butts in the first place is a matter best left to speculation. The point is, they found they could set apart their products the same way ranchers set apart their cattle. Namely, by emblazoning them with brands.

Thus product brands began life as simple marks. In a world where a pound of baking soda had always been a pound of baking soda, a package displaying a hammer-wielding arm was all it took to stand out, spur sales, and launch a phenomenon known today as brand loyalty.

It was all well and good until other marketers started branding their products, too, which they did almost immediately. Suddenly, a mark alone was no longer enough: It needed to stand for something. Like, say, consistent quality.

And that was all well and good until other marketers decided their brands needed to stand for consistent quality, too. This was great for consumers, since it promoted quality overall, but less great for marketers, since in time consumers realized that one brand of laundry detergent performed pretty much like every other.

Which, ironically, brought about a return to not-branding. Readers may recall from the 1980s an onslaught of generic products: Plain white packages bearing unvarnished commodity names like, say, “Saltine Crackers,” over the not terribly compelling “Suitable for everyday use.” Generics eventually gave way to so-called store brands, which today abound and succeed. Why shell out a few cents more for Uncle Ben’s when Kroger’s brand rice is indistinguishable to the average taste bud?

In this environment, a mark and consistent quality are no longer enough. That’s where brand personality can help. There are two kinds. (Bear with me while I oversimplify. It’s either that or I write a post way longer than this one.) There was the kind you might enjoy—say, Axe’s slapstick humor—or the kind you might identify with—say, Abercrombie & Fitch for the self-identified stylishly sexy.

Brand personality is at once easily duplicated and not so easily duplicated. Just as no two people are alike personality-wise, there is an infinite array of possible brand personalities. Trouble is, marketers often fail to appreciate the value of nuance. That’s why just about every market sports a financial institution slugging itself The Friendly Bank, which to consumers is about as compelling and believable as a paving company offering lovable blocks of asphalt, except it’s not as charming or unique.

Today, a good brand isn’t just a claim. It’s an ongoing demonstration. To stick with the above example, any bank can claim to be friendly. Not every bank has the wherewithal, know-how, culture, or needed policies to demonstrate it. Especially since the larger you grow, the less control you have over the performance of a minimally compensated teller having a bad day.

I’ve written before about delivering a brand in digital banking by use of design, intuitive apps, more than mere functionality, and becoming versus claiming. But another area that banks must not overlook is copy. The last thing you need is to have your lovely app undone by copy that’s about as rewarding to read as dust is to gargle.

For financial institutions, making copy sparkle is no easy thing. For one thing, every word has to survive a review by Compliance, a department generally not known for its contributions to shining prose. For another, though marketing consultants badger you about selling benefits, just about every competitor’s products sport pretty much the same benefits as yours. There are only so many ways you can say “loan,” “checking account,” “lockbox,” “wealth management,” “investment advisor,” and, if you must, “we care.” Still, there are places you can make copy sparkle. To arrive in front of the right sets of eyes is only the first part of targeting. The second part is to connect with the brains occupying the space immediately behind those eyes. If you’re serious about delivering a brand experience, it is well worth the effort.