Financial Services CxO Roundtable Recap

Transform by Simon held a financial services roundtable this week led by:

  • Dan Rosen, Founder and General Partner at Commerce Ventures
  • Sara Tresch SVP, Digital Strategy & Transformation at Charles Schwab
  • Doina Harris, CPO at Simon
  • Richard Demato, Head of Transformation at Simon

The intimate event brought our speakers together with eight marketing and experience leaders from across the biggest names in financial services.

The big topic of the discussion revolved around the perfect storm brewing to rattle the financial services establishment:

  1. Using the 2008 recession as a proxy for calculation, it appears that — due to COVID-19 — delinquency rates across lending categories could approach $1 trillion.
  2. Though major financial institutions recognize the threat and are building reserves to weather the storm, rising digital-native challengers continue to absorb a growing share of the market, thus reducing assets under management for big banks.
  3. Additionally, challenger brands run the full gamut of financial services, meaning that no business line is insulated from disruption.
  4. Though major financial institutions will see attrition and dwindling acquisition due to growing disruptors, they now must also contend with household-name tech behemoths. Brands like Apple, Square, Amazon, Google, Shopify, Samsung, and Facebook have all launched financial products and services and will continue to do so.

The new competition from challengers and big-tech represents a seismic shift in customer experience standards: from what they demand in terms of UX/UI and convenience to those who offer the most competitive rates and benefits.

And with so many consumers’ financial interactions being primarily — if not entirely — digital, the friction of switching from one service to another is lower than ever. This means that if incumbent institutions don’t take immediate action toward digital transformation, customer attrition will accelerate.

The sweet center to this bitter pill comes in the form of recent VC investment trends.

  1. In H1 2019, venture funding in challenger brands outpaced enablement technology by 48%.
  2. In H1 2020, that trend more than flipped, with venture funding in enablement technology outpacing investments in challenger brands by 55%.

Incumbent brands with the right attitude and approach to digital transformation do have a fighting chance to maintain market dominance and reclaim the market share they’ve lost to the proliferating competition.

The four big questions that our attendees discussed were:

  1. What is the role of the incumbent financial institution today? Tomorrow?
  2. How should incumbents respond to venture-backed challengers?
  3. How should incumbents think about the threat from Big Tech?
  4. Are you doing enough to keep your customers engaged across the channels and interfaces they prefer?

If you have questions about the changing finserv ecosystem and how to strategize a competitive digital transformation, sign up for our next September 23, 2020 webinar, “Digital Transformation: Rising to FinServ Consumer Demands,” co-hosted by Simon Data’s FinServ Sales Director, Whitney Hudson and Richard Demato, Simon’s Head of Transformation.

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