In a few weeks’ time, I’ll be travelling to Hong Kong for the first time, looking to visit Shenzhen as well. I’m hoping it will be a great opportunity for me to learn more about the needs of Chinese customers and get a better feel for the Chinese Fintech scene. To start preparing for my trip, I used a recent report by EY/DBS Bank titled “The Rise of FinTech in China” to learn more about key characteristics of the Chinese Fintech space.
I’ve looked at the ‘current state’ of Fintech in China, both from a customer and a market perspective, and these are my main takeaways from the EY/DBS report:
- Fintech activity in seven vertical markets – EY/DBS’ report outlines the seven key verticals in which Chinese Fintech businesses are active (see Fig. 1 below). At a first glance, that the lion’s share of innovation by Chinese Fintech players thus far has been in the payments and e-wallets space. I’ve written previously about the absolute rise of alternative payment methods in China, mostly via mobile and predominantly driven by Alipay and WeChat.
- Chinese customers are embracing alternative payment and insurance methods – The EY/DBS report contains a useful diagram that outlines the percentage of customers per Asian country using specific Fintech services (see Fig. 2 below). Based on this diagram, it looks like both payments/remittances and insurance are already quite established in China, with opportunities for lending and personal wealth management to truly take off soon.
- Customer focus on online experience and functionality – A recent study by EY explored the appetite of Chinese consumers for non banks over traditional banks. It was interesting to read about the value placed on “better online experience and functionality”, as a key reason for using non banks over traditional players. One of my assumptions here is that Chinese consumer prefer banking services which are fully integrated into their daily lives, thinking about how WeChat seamlessly integrates payments into its messenger app.
- Alternative payment methods; disruption hasn’t finished yet – I had never given that much thought to low credit card penetration rates across China, but the stats in the EY/DBS report speak volumes in this regard (see Fig. 4 below). The report offers a pretty straightforward explanation for this phenomenon; a strong adoption of alternative payment methods and e-wallets. Unionpay Quick is a good example of a contactless payment method that is becoming more and more ubiquitous in China, particularly in so-called “first tier cities”.
Main learning point: Having read the EY/DBS report, I do feel that China is quite far ahead of the Western world in certain areas of Fintech, particularly in the payments and e-wallet space. In the west, Fintech has been responsible for a lot of ‘unbundling’ of traditional banking services. In Asia – in China in particular – my feeling is that things are moving in the opposite direction: seamlessly integrating financial activities with people’s day to day activities. Alipay, WeChat and, in India, Paytm are leading the way in this regard.
Fig. 1 – Chinese FinTech activity in seven key vertical markets – Taken from: “The Rise of FinTech in Asia – Redefining Financial Services” by EY / DBS
- Payments and e-wallets A mobile payments ecosystem facilitated by e-commerce and social media players, of which Alipay (of Ant Financial) and Tenpay (a Tencent company) dominate the market. Other notable players include UnionPay, ICBC e-wallet, JD Pay/Wallet (of JD.com) and 99bill (of Dalian Wanda Group).
- Supply chain and consumer finance E-commerce players lend to underbanked or unbanked individuals and small medium enterprises (SMEs) by leveraging users’ merchant data on the platform. Key participants include Ant Financial and MyBank (Alibaba), WeBank with WeChat (Tencent), JD Finance (JD.com) and Gome Electronic Appliance, which recently ventured into providing financial services for individual customers and suppliers.
- Peer-to-peer (P2P) lending platforms P2P platforms create a marketplace for peers to lend to individuals and SMEs underserved by the traditional lending sector. Market leaders are Lufax (Ping An Insurance), Yirendai (CreditEase), Rendai, Zhai Cai Bao (Alibaba) and Dianrong (the co-founder of Lending Club).
- Online funds Funds linked to payment platforms that offer ease of access and more competitive returns than the historically low deposit rates. Primary participants are Yu’e Bao of Ant Financial, Li Cai Tong (Tencent) and Baifa (Baidu).
- Online insurance E-insurance sold through e-commerce and online wealth management (WM) platforms. Notable brands are platforms by the People’s Insurance Company of China (PICC), Ping An, and Zhong An (in partnership with Ping An).
- Personal finance management Recently developed mobile-centric finance solutions providing access to mutual funds though stock trading apps. These platforms offer offline-to-online activity, with online brokers accounting for over 92% of new clients. Key players include Ant Financial (Alibaba), Li Cai Tong (Tencent), Baifa (Baidu), Wacai, Tongbanjie, Zhiwanglicai (CreditEase) and JD Finance (JD.com).
- Online brokerage Investment, social network and information portals for investors in China, providing thematic investing via websites and mobile apps, and offered by FinTech firms such as Snowball Finance, Xianrenzhang and Yiqiniu.
Fig. 2 – Percentage of banking/financial services customers using FinTech services – Taken from: DBS Bank, 2016
Fig. 3 – Reasons for using a non-bank rather than traditional bank – Taken from: EY Global Consumer Banking Survey 2016
Fig. 4 – Payment method used most regularly the past 3 months – Taken from: FT Confidential Research survey, May 2016
Source: Survey of 1,000 urban consumers conducted by FT Confidential Research, a unit of the Financial Times18, May 2016
One of the product areas I’m keen to learn more about is billing; understanding how small businesses go about (recurring) billing. A few years ago, I used Recurly to power subscription management and payments for a music streaming service. I’ve now discovered Zuora, who aspire to “turn your customers into subscribers.”
“The world subscribed” – I really like Zuora’s vision – “the world subscribed” – and its 9 keys to building a subscription based business (see Fig. 2 below). Zuora aims to make managing subscription payments as intuitive as possible. For example, when I look at the info that Zuora provides on a specific customer account, it feels clear and clean, enabling the user to digest key account information at a glance (see Fig. 3 below).
Part of an ecosystem – The thing I like best about Zuora is the numerous integrations it has with partners and marketplace apps. As a result, Zuora users can integrate easily with payment gateways such as Adyen and link with accounting software packages such as QuickBooks. Similarly, there’s a whole host of apps and plug-ins that Zuora users can choose from.
Main learning point: Even though subscription management / billing forms the core of Zuora’s value proposition, I feel that there’s much more to it: helping people run their business operations as efficiently as possible. I don’t know whether the people at Zuora would agree with me on this vision, but I believe that, especially through it’s 3rd party integrations, Zuora can support its users more widely in their day-to-day operations.
Fig. 1 – Screenshot of Zuora’s “Quotes” overview – Taken from: https://www.getapp.com/finance-accounting-software/a/zuora/
Fig. 2 – Zuora’s 9 keys to building a subscription based business – Taken from: https://www.zuora.com/vision/the-9-keys/
- Price – Find your sweet spot. Dynamically adjusting pricing and packaging is the surest way to attract and retain customers, and multiply the value of your relationships.
- Acquire – Boost subscription rates with tools like flexible promotions, integrated quoting and multi-channel commerce.
- Bill – Subscriptions mean more invoices and more payments. Automatically generate fast, accurate bills and deliver them online.
- Collect – Get paid. Collect payments instantly through automated and manual channels, while maximising completed transactions and minimising write-offs.
- Nurture – Build beautiful relationships. Keep your customers engaged and happy. Seamlessly manage rapidly changing upgrades, conversions, renewals and other orders.
- Account – Measure everything. Twice. Zuora plugs straight into your accounting software and General Ledger. Register subscription and process deferred revenue with ease.
- Measure – No paper, no worries. Analytics make forecasting, accounting close and audits a breeze. Plus, it gives you the right insight your subscribers, so you can make smarter decisions.
- Iterate – Try something new every day. Subscriptions can involve complex customer relationships. Zuora lets you iterate and test what’s working with just a couple of clicks.
- Scale – Get growing. Zuora is built on a secure, scalable technology infrastructure. So wherever you start out, we’ll keep the system running as you grow.
Related links for further learning:
New payment technologies seem to be springing up left right and centre … Swish is another innovative payment platform which I encountered recently. About two years ago six Swedish banks launched Swish. Swish is a mobile app that lets people use their mobile phones to make payments and transfer payments to someone else’s banks. The money gets sent in real-time between the bank accounts and consumers subscribe to the service via their bank.
Fig. 1 – Screenshot of Swish – Taken from: http://www.windowscentral.com/send-and-receive-funds-easily-swish-windows-phone
“Payments. Anytime. Anywhere.” is Swish’s motto. I can see how Swish’s mobile point of sale functionality competes directly with the likes of Square, iZettle and Klarna. The biggest difference between Swish and iZettle is that for the later retailers need to have a card reader to accept payments. With Swish this isn’t strictly necessary, provided you’ve authenticated your account details via the Swish app (see step 3 in Fig. 2 below).
Fig. 2 – Swish Mobile POS – Taken from: http://swishme.com/mobile-pos/
Other competitors in Swish space are Whywallet and Seamless. With Seamless for example, consumer payments are encrypted and secured through one’s PIN code. As a result – similar to Swish – there’s no longer a need for a user to enter her bank or credit card details when paying (see Fig. 3 below).
Fig. 3 – Onboarding process for Seamless’ SEQR mobile wallet – Taken from: https://www.seqr.com/nl/en/faq/
Main learning point: Even by just looking at the number of competitors in the payments space, it’s easy to see how payment experiences will become ultra seamless in just a few years’ time. With its focus on simplifying payments as much as possible, Swish is no exception in this respect.
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I recently heard Shamir Karkal, Head of Open APIs at BBVA, talking about open platforms and I was intrigued. In the podcast episode Shamir talked about the power of APIs, but at the same time stressed the importance of having a strong platform that these API end points can hook into.
Shamir talked about building a product with a platform attached. Instead of just building a set of APIs, we should treat APIs as a way in for customers, developers and third parties to hook into the capabilities of our business. For example, hooking into all the things that banks typically tend to do well: compliance, risk management and customer support.
My ears really perked up as soon as Shamir started talking about Dwolla. Dwolla is US based peer-to-peer payments company, whose mission it is to facilitate “Simple payments. No transaction fees.” Dwolla is powered by APIs, making it easy for US users to link their Dwolla account to a US bank account or credit union account to move money. Setting up a Dwolla account is free, and there’s no per transaction fee. Users can collect payment on an invoice, send a one-time or recurring payment, or payout a large number of people at once. Dwolla also offers this a white label solution (see Fig. 1 below).
Fig. 1 – Dwolla’s white label version of their API – Taken from: http://apievangelist.com/2015/09/03/dwolla-just-released-a-white-label-version-of-their-api-are-you-ready-for-the-wholesale-api-economy/
In essence, what Dwolla does is enabling real-time payments between Dwolla accounts and another bank account that users want to send money to. Dwolla are integrated with banks such as BBVA, having Dwolla APIs ‘talk’ to the bank’s APIs. Dwolla has created some form of a protocol in the form of FiSync which aims to make it more secure for users to transmit information between accounts. FiSync enables the use of secure authentication and tokenisation in the comms between Dwolla and accounts like those of BBVA Compass. This way, BBVA Compass account holders don’t have to share their account info with Dwolla (see Fig, 2 below).
Fig. 2 – Workflow of a connecting a FiSync-enabled bank account to Dwolla – Taken from: https://www.dwolla.com/updates/breaking-down-real-time-secure-authentication/
Main learning point: I love how Dwolla’s proposition is almost entirely API based, making it easy for its users to transfer money to bank accounts and credit union accounts. Dwolla definitely feels more seamless, secure and cost-efficient compared to the way in which users traditionally transfer money from one account to another.
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A few days ago I wrote about some popular apps within the educational space and I’d now like to focus more on some of the current (technology) trends within the “EdTech” space:
- Shift from ‘asset based learning’ to ‘continuous learning’ – We’re already seeing a shift away from the traditional educational model – where learning happens through courses or certificates and has a defined endpoint. John Seely Brown, in a talk called Cultivating the Entrepreneurial Learner in the 21st Century describes this traditional model as an ‘asset-based’ approach. Instead, we’re starting to treat learning as a lifelong process consisting of deliberate practices aimed at constantly getting better. I can imagine that this will have a significant impact on educational technology. For example, learning might become more of a ‘playful’ activity and something which is ‘consumed’ much more on ‘pick and mix’ basis rather than the more linear approach that we’re used to.
- Subscription learning – Some trend watchers have been predicting a model where for example universities do much more than just providing you with academic content. It’s about creating a “full stack” model whereby the education provider becomes a school, recruiter, a lender and an employer, all merged into one. This could mean that students have a lifelong relationship with their university, coming back to it as their career and their professional skills evolve.
- Combining adaptive learning and competency based learning – The combination of a student picking up some specific competencies (‘competency based learning’) at a pace and in a format tailored to the individual (‘adaptive learning’) is something that technology can well facilitate. I believe this will be one of the biggest trends to watch in the EdTech space over the coming years. As a simple example, I’m currently doing a UX Design course online where I can work through the modules at my own pace and go over specific aspects with my tutor, who I Skype with once a week.
- Gamification in education – Gamification, as the concept around motivation and rewards, will continue to have an impact on education. The channel through which you access the educational content becomes secondary, it’s all about the ways in which people the subject matter is presented to people and how hooked they become. As a result, learning effectively becomes an ongoing habit (see my point about ‘continuous learning’ above). A good example is Lifesaver which is a prize winning campaign that combines interactivity, live-action film footage and time based decision making activities to teach CPR on your tablet, smartphone or computer.
- Enable ‘flipped learning’ – Flipped learning is an approach whereby students watch lectures and read related content online, and then go to a physical classroom to do their homework, under the personal instruction and guidance of teachers. The underlying idea here is that it will increase student engagement levels, both in and out of class.
- Bring Your Own Device – The ‘BOYD’ approach builds on the reality that a lot of students already bring their own devices to school and use them for their own needs. Rather than trying to constrain the educational approach and content to a single device or operating system, the idea here is that the content should be device agnostic. I’m sure that over time the technology will get better at ironing out scalability, security and compatibility issues, but BOYD taps into the reality of students having their preferred devices and ways of working.
Main learning point: It feels like there’s a lot of opportunity for innovation and transformation within the educational space. It will be interesting to see at what pace this change will take place and its impact on our education.
Image taken from: http://www.videojeeves.com/blog/e-learning-for-kids/
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How do the likes of eBay, Amazon Handcraft, Notonthehighstreet, Rakuten and Etsy go about supporting the small businesses who sell products through their platforms? What are some of the typical data and customer insights that these sellers benefit from and why? Amazon recently launched its Seller App aiming to “help grow and manage your selling business on Amazon.” I had a quick look at the Amazon Seller App and these are my initial thoughts:
- How did the app come to my attention? – Since I’ve started working on online marketplaces I tend to keep an eye out for new technology and tools available to the sellers on these marketplaces.
- My quick summary of the app (before using it) – I expect a mobile app, which helps sellers to keep a close eye on their sales figures and manage their orders.
- How does the app explain itself in the first minute? – The first screen of the app asks me to select my marketplace (see Fig. 1 below). It doesn’t provide any further context but I presume that if you’re an active seller on Amazon you might not need any further info.
- Getting started, what’s the process like? – I’m not a seller on Amazon, but looking at some of the screenshots and the data provided, I can imagine that sellers will find it relatively easy to use the app (see Fig. 2 and 3 below). What I’m curious about though is the data syncing between devices, making sure your sales data is as ‘real-time’ as possible. I also couldn’t get a sense of whether (and how well) the Seller App integrates with Amazon’s Mobile Credit Card Reader.
- How does the app compare to similar apps? – The Amazon Seller App feels very similar to the Sell on Etsy app and SellerMobile. For example, the Etsy app enables sellers to manage their open orders and revisit completed ones on the go (see Fig. 4 below). The Etsy app also offers sellers the opportunity to check their Etsy shop and product views, but I’m not sure whether this analytics feature is included in Amazon’s Seller App.
- Did the app deliver on my expectations? – Yes, based on what I could tell from the screenshots and app description. The app looks the provide the key stats and insights that marketplace sellers tend to be interested in. What I could not tell from the screenshots is how the app facilitates sellers who sell on multiple marketplaces, for example in the UK and the US. I know this is a reality for lots of small businesses and it would be good to find out how the user interface of the Amazon Seller App accommodates for this use case.
Main learning point: The Amazon Seller App looks fit for purpose, providing sellers with key sales information that’s visual and easy to manage on the go. Analytics and multiple marketplaces are two areas where I’m not sure how (well) they are covered by this app. However, if you sell products through Amazon and want to keep a close eye on your orders and sales, then this app should give you the key information to help you manage your activities on Amazon’s marketplace.
Fig. 1 – Screenshot of opening screen on Amazon Seller App (iOS)
Fig. 2 – Screenshots of Amazon Seller App (iOS) – Taken from: http://www.allmediatalks.com/amazon-in-launches-its-seller-app-in-india-amazon-online-selling/
Fig. 3 – Screenshot order detail view on Amazon Seller App (iOS) – Taken from: https://itunes.apple.com/us/app/amazon-seller/id794141485
Fig. 4 – Screenshot of the ‘Sell on Etsy’ App – Taken from: https://blog.etsy.com/news/2014/introducing-new-mobile-app-just-for-sellers/
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Since I started looking into omni-channel metrics last year, I’ve been learning how to best gather meaningful data at each step of the user journey. I recently came across a great piece by Gary Angel titled “A Data Model for the User Journey”. In his article, Gary aims to address the multi-source nature of our data touchpoints, and the issues brought about by the differences in the level and type of detail data. He rightly points out that these differences in data make any kind of meaningful analysis of the user journey virtually impossible. Gary provides a number of useful steps to tackle this problem:
- Create a level of abstraction – Gary first suggestion is to get to a level of abstraction where each data touchpoint can be represented equally. One way of doing this is to apply Gary’s “2-tiered segmentation” model. In a 2-tiered segmentation model, the first tier is the visitor type. This is the traditional visitor segmentation based on persona or relationship. The second tier is a visit or unit-of-work based segmentation that is behavioural and is designed to capture the visit intent. It changes with each new touch. Gary summarises this two-tiered approach as follows: “Describing who somebody is (tier 1) and what they are trying to accomplish (tier 2).”
- Capture visit intent – One of the key things that I learned from Gary’s article is the significance of ‘visit intent’ with respect to creating a user-journey model. Visit intent offers an aggregated view of what a visit was about and how successful it was. Both the goal and the success of a visit are important items when analysing a user journey.
- 2-tiered segmentation and omni-channel – Gary points out how well his 2-tiered segmentation model lends itself to an omni-channel setup. The idea of 2-tiered segments can be used across any touchpoint, whether it’s online or offline. The intent-based segmentation can be applied relatively easily to calls, branch or store visits and social media posts. The model can also be applied – albeit less easily – to display advertising and email (see Fig. 1 below).
- Good starting point for journey analysis – When you look at the sample data structure as outlined in Fig. 1 below, with one data row per user touchpoint visit or unit of work, you can start doing interesting pieces of further analysis. For example, with this abstract data structure you can analyse multi-channel paths or enhance user journey personalisation.
- Combine visitor level data with user journey data – It sounds quite complex, but I like Gary’s suggestion to model in the abstract the key customer journeys. This can then be used to create a visitor level data structure in which the individual touchpoints are rolled up. Gary’s example below helps clarify how you can best map different data touchpoints to related stages in the user journey (see Fig. 2 below) .
Main learning point: The main thing that I’m taking away from Gary Angel’s great piece is the two segments to focus on when measuring the user journey: the visitor and their goals. The data structure suggested by Gary lends itself really well to an omni-channel user experience as it combines visitor and user journey data really well.
Fig. 1 – Sample data structure when applying the the 2-tiered segmentation to a user journey data model – Taken from: http://semphonic.blogs.com/semangel/2015/03/a-data-model-for-the-user-journey.html
- TouchDateTime Start
- TouchType (Channel)
- TouchVisitorSegmentCodes (Tier 1)
- TouchVisitSegmentCode (Tier 2)
- TouchPerson (Agent, Rep, Sales Associate, etc.)
- TouchSource (Campaign)
Fig. 2 – Example of modelling the acquisition journey for a big screen TV – Taken from: http://semphonic.blogs.com/semangel/2015/03/a-data-model-for-the-user-journey.html
- Initial research to Category Definition (LED vs. LCD vs. Plasma – Basic Size Parameters)
- Feature Narrowing (3D, Curved, etc.)
- Brand Definition (Choosing Brands to Consider)
- Comparison Shopping (Reviews and Product Detail Comparison)
- Price Tracking (Searching for Deals)
With an abstract model like this in hand, you can map your touchpoint types to these stages in user journey and capture a user-journey at the visitor level in a data structure that looks something like this:
- Journey Sub-structure
- Journey Type (Acquisition)
- Current Stage (Feature Narrowing)
- Started Journey On (Initial Date)
- Time in Current Stage (Elapsed)
- Last Touch Channel in this Stage (Channel Type – e.g. Web)
- Last Touch Success
- Last Touch Value
- Stage History Sub-Structure
- Stage (e.g. Initial Research) Start
- Stage Elapsed
- Stage Success
- Stage Started In Channel
- Stage Completed in Channel
- Channel Usage Sub-Structure
- Web Channel Used for this Journey Recency
- Web Channel Used for this Journey Frequency
- Call Channel Used for this Journey Recency
- Call Channel Used for this journey Frequency
- Stage Value
This stage mapping structure is a really intuitive representation of a visitor’s journey. It’s powerful for personalisation, targeting and for statistical analysis of journey optimisation. With a structure like this, think how easy it would be to answer these sorts of questions:
- Which channel does this visitor like to do [Initial Product Research] in?
- How often do visitors do comparison shopping before brand narrowing?
- When people have done brand narrowing, can they be re-interested in a brand later?
- How long does [visitor type x] typically spend price shopping?
Related links for further learning: