01 Dec 2017
118
118 views


2017 in Finance: Helping Consumers Improve Their Financial Life

by Omer Ismail (MBA 2007), chief commercial officer, Marcus by Goldman Sachs, the firm’s digital consumer financial services business

Topics:
ShareBar

Large consumer banks have historically collected a lot of data on their customers, which they have used to sell standardized products. Increasingly, however, we have seen new entrants using customer data to help the consumer and provide them with customizable products and insights to improve their financial life. Think of it like a trip to the doctor: The doctor doesn’t just tell you your cholesterol level. He tells you what that means, how it compares to others in your age group, and what choices you have given that information. That’s what fintechs and disrupters have started to do.

We know that consumers often feel overwhelmed by the topic of finances. They don’t feel as if they are in control. In other aspects of their life—for instance, in their shopping habits—consumers have access to a lot of information that in turn helps them feel empowered, and they are coming to expect the same from financial services firms.

However, consumers understandably have a different bar when it comes to shopping online for clothes versus picking the financial product that’s best for them. Finances aren’t just personal, they are extremely emotional. So when it comes to helping consumers manage their financial lives, high tech is not enough. In our business, we also have to be high touch. Consumers love the convenience of a digital platform, but there will always be circumstances in the financial services sector when the consumer wants to talk to a person directly.

By using data to the benefit of the consumer and to learn what they need, rather than to sell them standardized products, consumer financial firms can forge a stronger relationship with their customers and help them feel in control.

What’s next in finance?

“The rise of mobile finance. Look at China: everything is already done on mobile devices, and social media services like WeChat are leading the way. The big question is, how are the banks going to respond? In China, where banks are less regulated, they are starting to branch into the mobile finance market, but it’s not clear what more highly regulated banks in other countries will do. Suddenly banks are ripe for disruption.”
—Professor Christopher Malloy

Return to Year in Review 2017
ShareBar
Featured Alumni

Featured Alumni

Class of MBA 2007, Section A

Post a Comment