How PSD2 is set to change banking up as we know it …

Fig. 1 – A prophetic vision by Bill Gates!? – Taken from: https://www.slideshare.net/patrickpijl/how-square-is-disrupting-banks/6-Bill_GatesBANKING_ISNECESSARYBANKS_ARENOT

“Banking is necessary.  Banks are not.”  Yep. Bill Gates said it. Back in 1994. And 28 years later, it’s it’s set to become reality. From the 1st January 2018, banking will no longer be the exclusive domain of banking institutions because PSD2 is going to drastically alter the way in which we bank.

The biggest consequence is that more than 4,000 European banks will need to open their legacy (mainframe) data stores to Third Party Players (‘TPPs’) and allow them to retrieve account information (‘AIS’) or initiate payments (‘PIS’). Both capabilities will be facilitated through APIs. I wrote about the scope and ramifications of PSD2 a few months ago, and I’ve been thinking ever since about the implications for existing banks and whether they’ve got reason to be scared.

It would be surprising if some of the traditional banks weren’t nervous about the extent to which they’ll have to open their kimonos under PSD2. And even if the Facebooks, Googles or Amazons of this world don’t become banks overnight, I expect the traditional, lifelong bank-customer relationship to slowly evaporate as a result of PSD2 (and subsequent versions of PSD).

Fig. 2 – PwC: PSD2 providing third party access to data and payments via APIs – Taken from: https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf

Facebook could easily decide to become an AISP (Account Information Service Provider – see Fig. 2 above), which would enable them to offer an aggregated view of a user’s bank accounts. As a result, they would be able to analyse spending behaviour, understand their users’ financial profiles and personalise a user’s banking experience. This isn’t that revolutionary, as virtual assistants like Cleo and Treefin have already starting offering this functionality, and I believe it’s highly likely that we’ll see it roll out across Facebook Messenger or WeChat in the near future. If you need more convincing, Facebook made their first move two years ago by appointing David Marcus, former CEO of PayPal, to head up Facebook Messenger, so watch this space. Similarly, US bank Capital One integrated with Amazon’s virtual assistant Alexa last year. This integration enables Capital One customers to pay their credit card bills and check their balances, by talking to their Alexa devices.

Fig. 3 – PwC: Six API-powered banking business models – Taken from: https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf

In addition, any remaining doubters about the power of APIs are likely to be converted as a result of PSD2. In the current Fintech landscape, there already are large number of banks that are either using APIs to hook into existing banking infrastructures (e.g. Varo Money) or offer additional services (e.g. N26). PwC recently conducted a study into the strategic implications of PSD2 for European banks and they listed no less than six API-powered banking business models (see Fig. 3 above).

Main learning point: It will be interesting to see what the actual impact of PSD2 will be, but if I were a traditional European bank, I’d be working as hard as I could to open up my APIs from today and start working on the creation of strong alliances with 3rd parties and their developers. As Nas once rapped on “N.Y. State Of Mind”, “I never sleep cause sleep is the cousin of the death.” If I were a traditional bank I’d follow Nas’ advice and give up on sleep completely …

Nas, lyric on “N.Y. State of Mind (Illmatic, 1994) – Taken from: https://uk.pinterest.com/MrConceptz/hiphop-101/

 

Related links for further learning:

  1. https://www.finextra.com/blogposting/14101/psd2-is-fast-approaching-dont-bury-your-head-in-the-sand
  2. https://www.finextra.com/videoarticle/1469/data-is-a-key-legal-issue-for-open-banking
  3. https://techcrunch.com/2017/01/12/what-facebooks-european-payment-license-could-mean-for-banks/
  4. http://www.ibtimes.co.uk/apple-facebook-amazon-primed-psd2-demolition-card-networks-1606188
  5. https://www.siliconrepublic.com/enterprise/fintech-banking-psd2
  6. http://www.bankingtech.com/675841/psd2-and-the-future-of-payments/
  7. https://www.evry.com/en/news/articles/psd2-the-directive-that-will-change-banking-as-we-know-it/
  8. http://www.sepaforcorporates.com/single-euro-payments-area/5-things-need-know-psd2-payment-services-directive/
  9. https://techcrunch.com/2015/07/12/the-future-of-finance-is-in-real-time/
  10. https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf
  11. http://www.pymnts.com/news/b2b-payments/2015/task-force-launches-eu-instant-payment-plan/.VYpo1rnhBTI
  12. https://venturebeat.com/2016/06/05/say-hello-to-messenger-banking/
  13. https://www.finextra.com/newsarticle/28602/capital-one-integrates-with-amazon-alexa-for-voice-powered-payments

 

Lessons learned from Uri Levine, Co-Founder of Waze

Last Friday, I attended a talk by Uri Levine, Co-Founder of Waze, a community-based traffic and navigation app that was sold to Google for $1.1 billion. In a two-hour session, Uri shared some of his key learnings from the Waze startup journey; from starting from scratch to a successful exit. I felt that his talk was packed with valuable insights, and I’ve selected some key ones to share:

Focus on the problem – I loved how Uri concentrated on the problem that you’re looking to solve. He talked about problem solving being a key driver for him and the different startups that he’s (been) involved in. For example, Waze originated from Uri’s frustration with traffic jams … Uri then talked us through the “Adjusted Startup Curve” to illustrate the typical journey of a startup, starting with a problem to solve (see Fig. 1).

Fig. 1 – Knife Capital’s “Adjusted Startup Curve” – Taken from: http://ventureburn.com/2013/07/the-startup-curve-south-africa-wiggles-of-realism/

Don’t be afraid to fail – I always find it incredibly refreshing when other people speak openly about failures and not being afraid to fail. As Uri rightly pointed out, the fear to fail (and therefore not trying) is a failure in itself (see Fig. 2). He was also keen to stress that creating and managing a startup is never a linear, upward journey. By contrast, you effectively go from failure to failure, but you might win in the end – if you’re lucky that is (see Fig. 3).

Fig. 2 – Michael Jordan quote about failure – Taken from: http://www.quotezine.com/michael-jordan-quotes/

Fig. 3 – “Journey of Failures” by Douglas Karr – Taken from: https://twitter.com/douglaskarr/status/333027896241299457/photo/1

Passion for change – Uri’s points about entrepreneurs and their passion for change really resonated with me. I’m not an entrepreneur, but I feel that I’ve got some innate restlessness which is usually fed by change, learning and trying new things. It was interesting hearing Uri talk about how this passion usually doesn’t sit with well with fear of failure or loss. “Move fast and break things” was one of Uri’s mantras in this regard.

Honest validation of your ideas – As an entrepreneur, Uri explained, you need to fall in love with your idea. However, he also highlighted the importance of being able to critically assess your own idea. He suggested asking yourself “who will be out of business if I succeed?” If you don’t know the answer to this question, Uri explained, your idea probably isn’t big enough.

Iterate based on user feedback – Uri reminded me of the mighty David Cancel as David is also very focused on solving customer problems and listening to customer feedback (see Fig. 4). Like David, Uri didn’t get overly zealous about Agile or lean development methods. Instead, Uri talked about constantly iterating a product or service based on customer feedback.

Fig. 4 – David Cancel at Mind the Product conference, London 2016 – Taken from: http://www.mindtheproduct.com/2016/12/importance-listening-customers-david-cancel/

Main learning point: I found Uri Levine’s talk hugely inspiring; he was honest about the challenges involved in creating or working at a startup whilst at the same encouraging us to solve problems and try things.

Related links for further learning:

  1. http://www.tellseries.com/events/uri-levine/
  2. http://uk.businessinsider.com/how-waze-co-founder-spends-his-money-2015-8
  3. https://www.ft.com/content/49857280-8eaf-11e5-8be4-3506bf20cc2b
  4. https://www.crunchbase.com/person/uri-levine#/entity
  5. https://www.theguardian.com/media-network/2015/may/28/waze-uri-levine-tips-startup-google

My product management toolkit (21): Assessing opportunities

Earlier this year I wrote about the tools and techniques to use when exploring market viability. I believe that the ability to properly assess specific opportunities is closely linked. I’ve found that, especially at the early startup stage, there are plenty of opportunities to potentially go for, as they’ll all bring in revenue and offer growth potential.

However, I believe that this can be a blessing and a curse. I’ve seen companies that went for all business / market opportunities and ended up with heaps of technical debt, operational cost or bespoke solutions that couldn’t be reused. Hence why I believe it’s critical for us product managers to be able to assess opportunities and make tough tradeoff decisions.

Let’s look at some of the tools and techniques you can use to assess and decide on opportunities:

1. Business Case

 

Fig. 1 – Sample business case format – Taken from: https://www.slideshare.net/projectingit/the-prince2-business-case

I’m pretty sure that we’ve all seen a business case template like the one in Fig. 1 before. The biggest risk I see with most business cases is that people spend an awful lot of time drafting them, for the business case to become obsolete as soon as the product has been built or launched.

Pros:

  • A familiar format for most stakeholders
  • Detailed breakdown of revenue & cost projections

Cons:

  • Often based on lots of assumptions, which are then treated as gospel
  • Often out of date as soon we start building or launching a product

2. Opportunity Assessment

1. Exactly what problem will this solve? (value proposition)
2. For whom do we solve that problem? (target market)
3. How big is the opportunity? (market size)
4. What alternatives are out there? (competitive landscape)
5. Why are we best suited to pursue this? (our differentiator)
6. Why now? (market window)
7. How will we get this product to market? (go-to-market strategy)
8. How will we measure success/make money from this product? (metrics/revenue strategy)
9. What factors are critical to success? (solution requirements)
10. Given the above, what’s the recommendation? (go or no-go)

By Marty Cagan – Taken from: http://svpg.com/assessing-product-opportunities/

In my toolkit blog post no. 6 I wrote about Marty Cagan’s opportunity assessment, and how you can compare product opportunities or ideas in a very objective and like-for-like manner.

Pros:

  • Less time consuming than business cases
  • More market, customer and problem centric, easy to translate into testable hypotheses
  • Outcome focused, establishing clear success factors early on

Cons:

  • Unfamiliar format for some stakeholders
  • Less numbers centric than a business case

3. Auftragsklärung (Alignment Framework)

Fig. 3 – Auftragsklärung template – Taken from: http://produktfuehrung.de/framework-no-9-auftragsklarung/

The product guys at Germany-based Xing have a created a very useful tool called “Auftragsklärung” or Alignment Framework, which helps assessing opportunities at the earliest stage possible.

Pros:

  • Helps to ‘take a step back’, honing in on fundamental questions
  • Facilities strategic thinking
  • Ongoing reference point for bigger opportunities 
  • Outcome and metric focused

Cons:

  • Unfamiliar format for some stakeholders
  • Risk of being too high level to base trade-off decisions on

4. Scoring

Fig. 4 – Scoring against a number of assessment factors – Taken from: https://www.slideshare.net/JasonBrett/the-60-second-business-case

What I like about this “scoring” method as created by Jason Brett is the idea of quantifying one’s assessment, using comparative scores. At the same time, however, my worry is that people can score subjectively to achieve a desired result.

Pros:

  • Encourages thinking about key considerations e.g. customer experience and operational necessity
  • Quantifiable and comparable results

Cons:

  • Risk of people making up numbers to meet the criteria 🙂
  • Finger in the air and subjective
  • Harder if some of the weighting factors have not been fully defined

5. Change Types

Fig. 5 – Doblin Ten Types of Innovation – Taken from: http://blog.hypeinnovation.com/using-the-ten-types-of-innovation-framework

With Doblin’s Ten Types of Innovation, the focus isn’t just on the product that you’re looking to develop. The model encourages us as product manager to carefully consider aspects such as the underlying business model and the experience around your product or service.

Pros:

  • Encourages thinking about business and customer impact
  • Easy to translate and communicate from a dual track roadmap point of view
  • Thinking beyond just the product or service

Cons:

  • High level, harder to base trade-off decisions on
  • Open to subjective views on nature of change

6. Minimum Viable Product (‘MVP’)

Fig. 6 – Definition of an MVP – Taken from: https://www.quora.com/Where-is-the-line-for-MVPs-minimum-viable-products-What-are-your-principals-guidelines-for-defining-your-MVP-in-particular-where-to-stop-building-too-much

Readers of my blog will undoubtedly know how much of a fan I am of MVPs, but only in the truest sense of the word. For example, when I developed my own MVP a few years ago, I tried to be as strict as possible with the minimum number of feature that could deliver maximum value to my users and maximum learning to me.

Pros:

  • Delivering value early
  • Early customer validation
  • Bringing riskiest assumptions forward
  • Increase speed to market

Cons:

  • Misunderstanding of what an MVP is / isn’t
  • Open to abuse; misinterpreting “minimum” and “viable”
  • “When are you going to do everything else!?”

7. Calculating Cost of Delay

Fig. 7 – Cost of Delay; Weighted Shortest Job First  (taken from: http://scalingsoftwareagilityblog.com/prioritizing-features/)

Fig. 8 – Cost of Delay Divided by Duration – Taken from: http://blackswanfarming.com/cost-of-delay-divided-by-duration/

When assessing opportunities or making tradeoff decisions it’s important to look at the cost of not doing something (now). I often see people either deciding to everything at one – I don’t consider that prioritisation 🙂 –  or not take into account cost of delay when making assessments.

8. Calculating Return on Investment (‘ROI’)

Fig. 9 – ROI formula – Taken from: https://www.poweredbysearch.com/blog/ppc-advertising-roi-calculator/

Similar to creating business creating business cases, the risk with calculating ROI at the very beginning of the product lifecycle or project is that you pluck figures out of the air. Often this simply occurs because you don’t yet have any actual figures to apply – especially with true greenfield opportunities.

However, having  initial ROI calculations based on the numbers available can serve as a very useful ongoing reference point to compare as soon as the product enters its lifecycle. This way you can start comparing and contrasting actual vs planned ROI and act based upon your insights gained.

Main learning point: Whichever tool or approach you use to assess opportunities I don’t care, as long as you find a way to ‘take a step back before going straight into decision and/or build mode!

Related links for further learning:

  1. https://www.prince2.com/uk/prince2-business-case
  2. http://svpg.com/assessing-product-opportunities/
  3. http://produktfuehrung.de/framework-no-9-auftragsklarung/
  4. https://en.wikipedia.org/wiki/Outcome-Driven_Innovation
  5. https://hbr.org/2002/01/turn-customer-input-into-innovation
  6. http://johnpeltier.com/blog/2014/01/06/opportunity-assessment/
  7. https://www.slideshare.net/JasonBrett/the-60-second-business-case
  8. http://blog.hypeinnovation.com/using-the-ten-types-of-innovation-framework
  9. http://blackswanfarming.com/four-steps-to-quantifying-cost-of-delay/
  10. https://marcabraham.wordpress.com/2014/04/07/my-learnings-from-lean-day-london-14/
  11. http://blackswanfarming.com/wp-content/uploads/2014/03/BlackSwanFarming-Canvas.pdf
  12. http://blackswanfarming.com/cost-of-delay-divided-by-duration/
  13. http://www.marketingmo.com/campaigns-execution/how-to-calculate-roi-return-on-investment/
  14. http://www.investopedia.com/articles/basics/10/guide-to-calculating-roi.asp
  15. http://www.tracead.net/161/roi-return-on-investment-how-to-calculate-roi
  16. http://transformcustomers.com/minimum-viable-product-how-it-helps-time-to-market/
  17. https://www.quora.com/Where-is-the-line-for-MVPs-minimum-viable-products-What-are-your-principals-guidelines-for-defining-your-MVP-in-particular-where-to-stop-building-too-much

 

Book review: “Influence without Authority”

As product managers, we’ve all experienced it: a sense of frustration when you’re accountable for delivering value without having any authority over the people that are critical to delivering that value. Whether’s it’s stakeholders, customers, developers, designers, there’s only so much we can do to influence and create the level of buy-in or cooperation required to create successful products.

In Influence without Authority (2005) Allan R. Cohen and David L. Bradford explore ways in which we can influence others without having authority over them. Cohen and Bradford’s “Model of Influence without Authority” forms the backbone of this book (see Fig. 1 below).

 

Fig. 1 – Summary of the Cohen-Bradford Model of Influence without Authority – Taken from: https://uk.pinterest.com/pin/328270260312405687/

“Influence without Authority” outlines the key components of this model, illustrating the scenarios in which the model can be applied. These are the three learning points I took away from reading this book:

  1. The currencies of exchange – The aforementioned Cohen-Bradford model is based on exchange and reciprocity – making trades for what you desire in return for what the other person desires. There are number of potential currencies that one can use to trade (see Fig. 2 below).
  2. Gaining clarity on your objectives – For the Cohen-Bradford model to work effectively, it’s important that you figure out exactly what you want, and prioritise your goals accordingly (see Fig. 3 below).
  3. Deciding with whom to attempt exchanges – The ability to consider and decide potential allies to exchange is a critical part of the Cohen-Bradford model and the book outlines some valuable considerations how to exchange directly with a potential ally (see Fig. 4 below).

Fig. 2 – Frequently valued currencies – Taken from Allan R. Cohen and David L. Bradford, “Influence without Authority”, pp. 36 – 51

Inspiration related currencies:

Inspiration related currencies reflect inspirational goals that provide meaning to the work a person a does.

  • Vision – You can help overcome personal objections and inconvenience if you can inspire the potential ally to see the larger significance of your request.
  • Excellence – The opportunity to do something really well and pride in having the chance to accomplish important work with genuine excellence can be highly motivating.
  • Moral/ethical correctness – Probably most members of organisations would like to act according to what they perceive to be ethical, moral, altruistic or correct thing to do.

Task related currencies:

Task related currencies are directly related to getting the job done. They relate to a person’s ability to perform his or her assigned tasks or to the satisfactions that arise from accomplishment.

  • New resources – Resources such as budget, people, space, equipment or time are important currencies when it comes to enabling someone to get the job done.
  • Challenge – The chance to work at tasks that provide a challenge or stretch is one of the most widely valued currencies in modern organisational life.
  • Assistance – Although large numbers of people desire increased responsibilities and challenge, most have tasks they need help on or would be glad to shed.
  • Organisational support – This currency is most valued by someone who is working on a project  and needs public backing or behind-the-scenes help in selling the project to others.
  • Rapid response – It can be worth a great deal for a colleague or boss to know that you will respond urgently to requests.
  • Information – Recognising that knowledge is power, some people value any information that may help them shape the performance of their unit.

Position related currencies:

These currencies enhance a person’s position in the organisation and, thereby, indirectly aid the person’s ability to accomplish tasks or advance a career.

  • Recognition – Many people gladly will extend themselves for a project when they believe their contributions will be recognised, so it’s importance to spread recognition around and recognise the right people.
  • Visibility to higher ups – Ambitious employees realise that, in a large organisation, opportunities to perform for or to be recognised by powerful people can be a deciding factor in achieving future opportunities, information, or promotions.
  • Reputation – Reputation is another variation on recognition. A good reputation can pave the way for lots of opportunities while a bad one can quickly shut the person out and make it difficult to perform.
  • Insiderness – For some members, being in the inner circle can be most valued currency. One sign of this currency is having insider information, and another is being connected to important people.
  • Importance – A variation on the currency of inside knowledge and contacts is the chance to feel important. Inclusion and information are symbols of that, but just being acknowledged as an important player counts for the large number of people who feel their value is under recognised.
  • Contacts – Related to many of the previous currencies is the opportunity for making contacts, which creates a network of people who can be approached when needed for mutually helpful transactions.

Relationship related currencies:

Relationship related currencies are more connected to strengthening the relationship with someone than directly accomplishing the organisation’s tasks.

  • Acceptance / Inclusion – Some people most value the feeling that they are close to others whether an individual or a group/department. They are receptive to those who offer warmth and liking as currencies.
  • Understanding / listening / sympathy – Colleagues who feel beleaguered by the demands of the organisation, isolation or unsupported by the boss, place an especially high value on a sympathetic ear.
  • Personal support – For some people, at particular times, having the support of others is the currency they value most. When a colleague is feeling stressed, upset, vulnerable, or needy, he will doubly appreciate – and remember – a thoughtful gesture.

Personal currencies:

These currencies could form an infinite list of idiosyncratic needs. They are valued because they enhance the individual’s sense of self. They may be derived from task or interpersonal activity.

  • Gratitude – While gratitude may be another form of recognition or support, it is a not necessarily job-related one that can be valued highly by some people who make a point of being helpful to others. For their efforts, some people want appreciation from the receiver, expressed in thanks or deference.
  • Ownership/Involvement – Another currency often valued by organisational members is the chance that they feel that they are partly in control of something important or have a chance to make a major contribution.
  • Self – concept – These currencies cover those that are consistent with a person’s image of himself or herself.
  • Comfort – Some individuals place high value on personal comfort. Lovers of routine and haters of risk, they will do almost anything to avoid being hassled or embarrassed.

Negative currencies:

Currencies are what people value. But it is also possible to think of negative currencies, things that people do not value and wish to avoid:

‘Withholding payments’

  • Not giving recognition
  • Not offering support
  • Not providing challenge
  • Threatening to quit the situation

‘Directly undesirable’

  • Raising voice, yelling
  • Refusing to cooperate when asked
  • Escalating issue upwards to common boss
  • Going public with issue, making lack of cooperation visible
  • Attacking person’s reputation, integration

Fig. 3 – Gain clarity on your objectives – Taken from Allan R. Cohen and David L. Bradford, “Influence without Authority”, p. 82

  • What are your primary goals?
  • What personal factors get in the way?
  • Be flexible about achieving goals.
  • Adjust expectation of your role and your ally’s role.

Fig. 4 – Deciding with whom to attempt exchanges – Taken from Allan R. Cohen and David L. Bradford, “Influence without Authority”, pp. 134 – 136

  • Centrality of the ally – How powerful is the other person? Power means more than hierarchical position: What needed resources does he or she control? How exclusive is the person’s control of those resources? How dependent are you on that person for success?
  • Amount of effort / credits needed – Do you already have a relationship with the person, or will you be starting from scratch? Is the person likely to insist on trading in currencies you do not command or cannot gain access to? Will the person be satisfied as long as you at least pay your respects and stay in touch, without asking anything directly?
  • Alternatives available – Do you know anyone whose support will help gain the support of the potential ally? In other words, who can influence the ally if you are not able to directly? If you can’t influence the person in the right direction, can you find a way to neutralise him or her? Can you reshape your project to take the person’s opposition into account or to skirt the person’s worst concern?

App review: THEO

Fig. 1 – Screenshot of THEO – Taken from: http://fintechnews.sg/3137/roboadvisor/robo-advisory-services-asia/

I recently came across THEO, a mobile, Japanese investment service offered by Money Design. THEO acts as a ‘robo-advisor’; enabling users to invest using their smartphone, and applying machine-based learning to offer users investment suggestions. The service allows users to start investment from 100,000 JPY. By answering nine questions (see Fig. 2 below), Money Design’s proprietary robo-advisor’s algorithm selects an optimum combination from about 6,000 Exchange-Traded Funds (‘ETFs’) in about two minutes and provides discretionary investment management to the user.

Fig. 2 – Screenshot of questions asked to THEO users to create their investment profile 

The user’s answers will trigger THEO’s underlying algorithms to deliver the most optimal money management plan for the user (see Fig. 3). At this point, we’ll need to consider the artificial intelligence aspect of THEO. This is where the accuracy of the proposed plan, as generated by THEO’s algorithms, comes into play (see Fig. 3 below). As one Japanese investor commented: “I am an aggressive investor with a long timescale so I was surprised to see how conservative the allocation ended up.”

 

Fig, 3 – Screenshot of sample diagnosis results based on answering THEO’s questions

Main learning point: The key point with apps like THEO is going to be the accuracy and personal fit of the investment plan its algorithms will suggest to investors. I wonder whether any manual ‘tweaking’ is involved in assessing investment profiles and subsequent recommendations.

Related links for further learning:

  1. http://jftoday.com/THEO,+the+robo-advisory+investment+app,+exceeds+5,000+users+for+100days/
  2. https://www.bloomberg.com/news/articles/2016-07-12/hedge-fund-founder-turns-robo-adviser-for-japan-s-cash-hoarders
  3. http://fintechnews.sg/3137/roboadvisor/robo-advisory-services-asia/
  4. http://www.retirejapan.info/blog/japan-robo-advisor-theo
  5. https://theo.blue/
  6. http://www.investopedia.com/terms/e/etf.asp
  7. http://fintechnews.sg/3137/roboadvisor/robo-advisory-services-asia/
  8. http://www.theasianbanker.com/updates-and-articles/robo-advisors-poised-to-take-off
  9. http://uk.reuters.com/article/us-china-wealth-roboadvisors-idUKKCN10S2GT
  10. http://finovate.com/drivewealth-brings-robo-advisory-china-new-partnership-creditease/
  11. https://medium.com/@Mosaic_VC/trust-in-a-robo-advisor-world-62397cbe75fe
  12. http://www.wired.co.uk/article/how-ai-is-transforming-the-future-of-fintech
  13. https://en.wikipedia.org/wiki/Artificial_intelligence

Book review: “The Art of Active Listening”

Listening. Listening. Listening. I know how important it is, but I also know how hard I sometimes find to truly listen. I guess I’m not unique when I miss half of what the other person is saying because I’m so preoccupied with what I’m going to say in response. This realisation prompted me to read The Art of Active Listening by Josh Gibson and Fynn Walker. These are my key takeaways from reading this book:

What is active listening?

The difference between “active listening” and “normal listening” was my first learning from reading “The Art of Active Listening”. The authors of the book, Josh Gibson and Fynn Walker, make it pretty clear from the outset that there are only two communication states: actively listening, and not really listening. Gibson and Walker then go on to explain that active listening is the art of listening for meaning; active listening requires you to understand, interpret, and evaluate what you’re being told.

With active listening, your attention should be on the speaker. This means that whenever you feel an inner urge to say something, to respond, try to stop this urge and instead concentrate on what’s being said. Just to give you a personal example from how this urge often manifests itself when I listen:

Speaker: “So we decided to do X, Y, Z.This felt like the best approach, because …

Me – thinking: “Why did they decide to do XYZ, that doesn’t make sense!”  – Thus completely ignoring the “because” part of the speaker’s statement

It’s easy to see from this example how people like me run the risk of missing critical bits of a conversation, purely because the focus is on the response instead of on listening actively.

Importance of active listening

In the book, Gibson and Walker explain why it’s so important to actively listen:

  • Active listening encourages people to open up.
  • Active listening reduce the chance of misunderstandings.
  • Active listening helps to resolve problems and conflicts.
  • Active listening builds trust.

To me, active listening is the key to empathy and relationship building. I liked Gibson and Walker’s simple breakdown of human communication: “In simple terms, speaking is one person reaching out, and listening is another person accepting and taking hold. Together, they form communication, and this is the basis of all human relationships.”

7 common barriers to active listening

Learning about the seven common barriers to active listening was my biggest takeaway from “The Art of Active Listening”. In the book, Gibson and Walker point out the typical barriers that most of us deal with when listening:

  1. Your ignorance and delusion – The first barrier to active listening is simply not realising that listening isn’t taking place. Gibson and Walker make the point that most of us can get through life perfectly well without developing our listening skills, deluding ourselves that listening just involves allowing another person to speak in our presence.
  2. Your reluctance – When you actively listen to another person, it may be that you become involved in their situation in some way. There might be instances where you’re reluctant to get involved and as a result fail to lend a sympathetic and understanding ear.
  3. Your bias and prejudice – Your personal interpretation of what you’re hearing may cause you to respond negatively to the speaker. You either assume that you know the situation because you’ve had a similar experience in the past or you allow your preconceptions to colour the way you respond.
  4. Your lack of interest – You may simply not be interested in what the speaker is saying. We all know that this can happen when you feel the conversation topic is uninspiring.
  5. Your opinion of the speaker – Your opinion of the speaker, as a person, may influence the extent to which you’re happy to pay attention and give your time to the speaker. Often when you don’t like the speaker, this is likely to affect your desire to listen to the speaker. I’ve also noticed how in certain places, the status of the speaker has a big influence on whether he or she is being listened to. In these places, the CEO tends to be listened to automatically, whereas ‘people of lower rank’ might struggle to be heard.
  6. Your own feelings – Your ability to listen to other people can easily be affected by how you’re feeling at a particular moment. For example, if you’re in a good mood you might feel more inclined to listen actively and offer your best advice based on what you’ve just heard. In contrast, if you’re in a bad mood, the last thing you might want to do is listen to someone else’s thoughts and offer advice in response.
  7. The wrong time and wrong place – These are the physical factors that influence whether you’re willing or able to actively listen to what you’re being told. For example, having a heart to heart conversation in a busy coffeeshop is unlikely to positively affect your ability to listen actively.

4 components of active listening

With the four components of active listening that are pointed out in the book, the onus is on the listener to develop these components:

  1. Acceptance – Acceptance is about respecting the person that you’re talking to; irrespective of what the other person has to say but purely because you’re talking to another human being. Accepting means trying to avoid expressing agreement or disagreement with what the other person is saying, at least initially. I’ve often made this mistake; being too keen to express my views and thus encouraging the speaker to take a very defensive stance in the conversation.
  2. Honesty – Honesty comes down to being open about your reactions to what you’ve heard. Similar to the acceptance component, honest reactions given too soon can easily stifle further explanation on the part of the speaker.
  3. Empathy – Empathy is about your ability to understand the speaker’s situation on an emotional level, based on your own view. Basing your understanding on your own view instead of on a sense of what should be felt, creates empathy instead of sympathy. Empathy can also be defined as your desire to feel the speaker’s emotions, regardless of your own experience.
  4. Specifics – Specifics refers to the need to deal in details rather than generalities. The point here is that for communication to be worthwhile, you should ask the speaker to be more specific, encouraging the speaker to open up more or “own” the problem that they’re trying to raise.

Tips to improve your active listening skills

The book provides some useful pointers on how you can best improve your active listening skills, explaining the essence of each tip outlined here:

  1. Minimise external distractions
  2. Face the speaker
  3. Maintain eye contact
  4. Focus on the speaker
  5. Be open-minded
  6. Be sincerely interested
  7. Have sympathy, feel empathy
  8. Assess the emotion, not just the words
  9. Respond appropriately
  10. Minimise internal distractions 
  11. Avoid “me” stories
  12. Don’t be scared of silence
  13. Take notes
  14. Practice emotional intelligence
  15. Check your understanding

The main principles of reflective listening

Once you’ve listened actively, “reflective listening” is what comes next. Reflective listening is concerned with how you process what you’ve heard. The four components of active listening – acceptance, honesty, empathy and specifics – all work towards creating reflective responses in the listener. The main principles of active listening are:

  • Listen more than you talk.
  • Deal with personal specifics, not impersonal generalities.
  • Decipher the feelings behind the words, to create a better understanding of the issues.
  • Restate and clarify what you have heard.
  • Understand the speaker’s point of view and avoid responding from your own viewpoint.
  • Respond with acceptance and empathy, not coldly or with fake concern.

Main learning point: Understanding more about the common barriers to active listening – and how to best overcome these – was my biggest takeaway from reading “The Art of Active Listening”. The book does a great job at offering practical tips on how to listen actively and how to better process the things you’ve heard.

Related links for further learning:

  1. https://www.ted.com/talks/evelyn_glennie_shows_how_to_listen
  2. https://www.skillsyouneed.com/ips/active-listening.html
  3. https://en.wikipedia.org/wiki/Active_listening
  4. http://www.goodtherapy.org/blog/psychpedia/active-listening

 

App review: Tide

How did Tide come to my attention? – I vaguely recall receiving an email from Tide a while ago about signing up for Tide, and a chance to learn about this new service before launch.

My quick summary of Tide (before using it)? – I expect a bank account exclusively geared towards to small to medium size businesses. A bit like Varo Money or Simple, but aimed at SMEs.

How does Tide explain itself in the first minute? – When I googled Tide, the top search result has “the Business Current Account that saves you time …” as its byline (see Fig. 1).

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Fig. 1 – Screenshot of top search result for Tide Banking

When I then go to Tide’s website, the homepage’s key messaging explains how Tide provide a small business current account (see Fig. 2). Speed and costs are the main things I take away from looking at Tide’s homepage at a first glance. I’m immediately intrigued to learn more about Tide’s “powerful tools that save you time and money.” This perception is reinforced by a “Sign up in 5 minutes” call to action button, just below the fold on Tide’s homepage.

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Fig. 2 – Screenshot of the homepage of https://www.tide.co/

Getting started, what’s the process like? – I click on the “Sign up in 5 minutes” button and a popup appears, telling me that Tide is available on Google and Android (see Fig. 3). I (wrongly) assumed that Tide’s services would also be available on my desktop, but I’m happy to go the App Store and download the Tide app.

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Fig. 3 – Screenshot of Tide’s popup message, directing me to Google Play and the App Store to start creating a Tide account

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Fig. 5 – Screenshot of the opening screen of the Tide iOS app

I click on the “Get started” button and land on a delightful screen that shows me upfront what I need to open a Tide account. I like how the app informs me upfront of the documents and information I need to open a Tide account (see Fig. 6). As a user, there’s nothing more infuriating than starting the account creation process and learning halfway through that I don’t have the right documents.

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Fig. 5 – Screenshot of the second screen of the Tide iOS app

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I use the camera to take a picture of my driving license. Doing this makes me realise again how my passport is still registered to my old address, and I wonder if and how that’s going to impact my application for a Tide account.
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Clearly, something isn’t right and I see a popup message which explains how Tide was unable to verify my details automatically. I now expect a phone call or an email from Tide about my identity verification. The good thing is that I can still continue with the account creation process, by simply clicking on the “Continue” button.

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The bit where Tide links to Companies House feels very seamless and it automatically picks up my company.

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This is the point where I hit a spanner in the works as the app doesn’t seem to accept the security photo that I’ve taken of myself. There’s a circular type button which enables me to take my picture again … and again … and again. Meanwhile, I’m unclear as to what I’m doing wrong and there’s no tooltip to explain what I need to ensure my picture meets Tide’s criteria. Clicking on the “next” button in the top right hand corner of the screen doesn’t help unfortunately, so I feel a bit stuck here.

After contacting Tide, the issue gets resolved and I continue the onboarding process. “Terms And Conditions” is the next step I’m presented with. The calls to action are clear and I like how I can easily read through Tide’s “Member Terms” and “Account Agreement” if I wish to.

 

After clicking both tick boxes, I receive a notification stating that my account has been opened, but that Tide needs to do some extra checks before creating a sort code and account number for me. I suspect this is due the fact that my driving license is still registered to my old address and doesn’t correspond with my company address.

The additional checks get carried out pretty swiftly and I can see a confirmation screen within the app, containing my account number, sort code and balance.

 

Did Tide deliver on my expectations? – Yes, apart from the issue with my security photo, onboarding with Tide felt intuitive for the most part. I believe that the app and the overall user experience would benefit from some simple tooltips (e.g. when submitting security details) to further simplify things.