Key Highlights from Raddon’s Research Conference
Raddon held its first-ever national research conference in Chicago November 6-8. The three day event was attended by over 250 C-level and marketing professionals from banks and credit unions across the United States, and the content featured Raddon’s own proprietary national consumer and small business research as well as several very informative keynote speakers and panelists.
Yours truly kicked off the conference with a discussion on the convergence of economic, demographic and technology trends and their impact on the financial services industry over the next five to ten years. Several themes percolated consistently throughout the conference. One was the increasing importance and relevance of deeper data insights. A panel of industry executives discussed how they use data on a daily basis to understand the needs and wants of customers and members. The panelists, who included J. Paul Leavell (Nusenda Credit Union), Andre Ievolino (Cabrillo Credit Union), and Bradley Leimer (Explorer Advisory and Capital), discussed the use of data sources such as social media and payments, in addition to the more traditional demographic data, in a holistic fashion to communicate and market more effectively.
An interesting perspective provided by one of the panelists was the notion of “big” data, “medium” data, and “little” data, with the notion that little data are things that can be accessed and utilized today, while big data are beyond the realistic capability of all but the largest institutions today, simply due to the required resource commitment to access, transform, and utilize this type of data. Medium data – items that can be accessed today but for which we have not yet built a use case – is the interesting opportunity. The panelists also discussed the role that fin-techs are playing today in how they use data. For banks and credit unions, the use and structuring of data tends to be fixed, closed and proprietary in nature, while for the fin-techs it is open, fluid and shared. The result is greater flexibility leading to innovation at greater speed for fin-techs.
Doctor Jennifer Golbeck, a data scientist at the University of Maryland, discussed potential pitfalls in the use of data. With the amount of data that is available today, the potential for abuse is apparent and is seen every day. Organizations that don’t establish clear guidelines in regard to how they use data could easily head down the path towards the “creepy” side, as opposed to the “helpful” side, according to Dr. Golbeck, with a resulting negative impact on their brand.
Dr. Golbeck illustrated this point with the account of Target sending maternity solicitations to a 15-year old girl two weeks before the girl notified her parents that she was pregnant. Target data models had identified that the girl was likely to be pregnant by looking at a wide variety of purchases she had made recently – none of which was a pregnancy test. This widely reported story did not cast Target in a good light; however, every day Amazon targets us with offers based on our purchase patterns and most of us find this valuable. The point, according to Dr. Golbeck, is use data appropriately.
A very interesting observation made by Dr. Golbeck has been labeled the “curly fries” conundrum. This is the notion that data analytics can sometimes lead to unexpected – and sometimes incorrect – conclusions. For example, examining Facebook ‘likes’ indicates that one of the clearest predictors of intelligence is – wait for it – liking curly fries. What this tells us is that we have to continually monitor what we uncover in our data analytics and look for the spurious connections that can easily arise. In other words, we should always have a role in the interpretation of data analytics.
The final keynote speaker of the conference was Mark Sievewright, noted industry futurist, who discussed the big technology trends to which all financial institutions should pay attention.
Mark noted that there are over 2100 artificial intelligence startups in existence today, and that the pace of technology adoption, consumption and diffusion is moving faster than at any time in history. Fin-techs continue to have an impact on the industry, but other than a few notable exceptions such as PayPal, Kabbage and Square, have not been able to take significant market share, as they lack the brand recognition of traditional service providers. Finally, he discussed the five key technology trends that will influence financial service providers over the next five years.
In between these keynote sessions were one and one-half days of breakout sessions, where attendees could choose from a wide variety of topical discussions, including the emerging Gen Z, the new branch paradigm, the importance and impact of financial literacy programs, measuring and developing your brand equity, meeting the needs of the high-income consumer, the Hispanic market, understanding the needs of small business, and many other topics. All of these sessions were based on primary research that Raddon has recently conducted to understand the essential issues that financial institutions must address. In every one of these areas Raddon has or is producing research papers and webinars that highlight this research.
All in all, the sessions were well attended and well-received by conference participants. And to boot, the weather in Chicago cooperated!