Jim Carroll- Futurist, Trends & Innovation Keynote Speaker

I’m honored to be invited to be the closing keynote speaker for this event which starts tomorrow; I speak at the closing lunch on Friday, on the theme, “When Do We Get to Normal? Why Thinking BIG Will Help You Seize The Opportunities of the 21st Century.” I’m sharing headlining duties with two other fascinating speakers.

Jim Carroll will be the closing keynote speaker for the 2011 T. Rowe Price Investment Symposium, offering his thoughts on the global economy, future trends and innovation!

Im my talk, I will be examining three key issues :

• next generation investor trends. This is somewhat like the talk I did for the National Australian Bank just two years ago – how is the next generation of hyper connected, socially networked investor going to change in terms of wealth management, investment decisions and other activities. There’s a good blog post referenced below, “14 Key Innovation Strategies for Financial Advisors, and Financial Organizations” that you’ll find here.
• the future and optimism: where are we going to witness the next billion and trillion dollar industries? What’s happening with science, connectivity, manufacturing, skills and innovation that will drive global economies forward?
• “Designed in Emerging Markets!” – what’s next, and in particular, what’s happening with innovation worldwide — and what does that mean for the global economy.

So much of the global investment community is overdosing on pessimism – I’m not with what I see happening within my global client basis.

As I often observe when I walk out on stage — “I’m a futurist. I can’t walk out there and tell you that your future sucks — because it doesn’t. The world I see is full of innovation, creativity, the reinvention of existing business and the birth of new ones.”

In the last few weeks, I’ve done a number of insurance oriented keynotes, including one for a meeting with the CEO and top leadership team of one of the largest insurers in the world, as well as a top insurance association.

We are quickly moving into an era of "performance oriented insurance" with policies / pricing based on performance. There will be huge opportunities for disruptive business model change as this trend unfolds.

And I’ve been busy speaking to the trends and opportunities for innovation that are going to come into this often-slow-to-react industry at lightning speed.

In an era in which everything around is plugging together,  there are tremendous new opportunities for some pretty massive business model change. I often make a joke on stage that perhaps one day my weigh scale might send an email to my fridge one day if I’m not living up to the terms of my life insurance wellness clause.

Yet, is such thinking far fetched?

Maybe not!

One of the biggest trends which is going to hit the world of insurance like a tidal wave is performance based insurance policies. If you live up to or exceed some performance standard, you’ll get a rebate or reduction on your insurance  policy rate.

It’s going to happen extremely quickly in the field of automotive insurance. A flood of GPS enabled performance measuring devices will soon come to inhabit most automobiles throughout the industrialized world. Insurance companies will set a policy price, and then give you a rebate if you exhibit better than average behavior.

Consider a program already underway in the UK:

Insure The Box measures drivers’ mileage, when they drive, and how they drive. Excessive G-forces, sudden braking or cornering and long periods of driving without a break are monitored.

Policyholders are charged by the mile and motorists initially pay for 6,000 miles. Once these are used up they can buy more miles as they need them. Policyholders are rewarded with “free” miles if they drive safely.

Money: A spy in the car that could cut cost of cover for young drivers
The Guardian, UK, April 2011

You can expect most North American insurance companies to roll out similar technology and performance. Or maybe not — some organizations won’t have the speed, agility and flexibility to do this at the pace that the market, competitive and customer pressure will require.

The result is a classic opportunity for big business model disruption.

The same type of thing is going to occur in the world of life insurance.

It has long been the assumption that despite the rapid emergence of genomic, preventative medicine, that it would never be desirable, ethical or even fair to underwrite policies based on a DNA test.

I’m a believer that this is a pretty big assumption to make. History shows that assumptions that underlie a business model barely last. When I speak about innovation, I advise people it’s often best to challenge assumptions — those who don’t often miss the biggest opportunities.

Clearly, we know that there are some powerful trends at work:

• the cost for a DNA test that can be used to predict with a high degree of accuracy the disesases and conditions you will inherit in your lifetime is set to collapse, as Moore’s law comes to drive the cost of DNA sequencing machines that do the test
• hence, greater numbers of people will have the opportunity to gain such insight (whether it be good or bad)
• those who have a test that shows a life that will be relatively disease and condition free would likely be able to offer themselves up to a group of speciality insurers and get a policy discount compared to the average population

Again, there’s opportunity for big business model change and upheaval as this happens.

So too is the concept of a rebate of your life, medical or disability insurance, if you can prove that you are taking regular, active steps to ensure that you are in good health. Certainly there are those in the the health care system, who know that with the massive challenges in front of, the system, a lot of big, bold transformative thinking is necessary.

A federal grant program authorized in the health overhaul law is offering states $100 million to reward Medicaid recipients who make an effort to quit smoking or keep their weight, blood pressure or cholesterol levels in check. The grant program is meant to encourage states to experiment with an uncertain approach to wellness: offering incentives for healthy behavior.

Healthy behaviors pay off; Medicaid recipients who commit to improving their health will be eligible for financial rewards, Los Angeles Times, April 2011

Extend this type of thinking into what comes next in our hyperconnected world — individuals who monitor their blood pressure, glucose levels and other vitals that they are willing to share with their insurer. Exercise and wellness apps on their iPhone that they can use to demonstrate the commitment to a regular series of workouts. Adherence to a personalized lifestyle plan — with insurance cost reductions based on performance.

This type of stuff isn’t far-fetched at all. And it’s going to hit the insurance world quicker than it thinks.

Then there’s the issue of the underwriting of insurance risk. Today, in the life insurance industry, you must undergo a battery of medical and blood tests so that they can make an assessment as to whether you are insurable.

Tomorrow will be completely different, and it will be here before the industry knows it:

“Assuming privacy regulations require it, by 2020 underwriting will consist of one question: ‘Can I look up everything about you?’”

The Next Decade in Innovation, Insurance & Technology, May 2011

Tomorrow? They might simply look you up on Facebook, and based on what they see, come to a decision as to whether they will insure you or not.

Farfetched? Not at all!  In fact, some in the insurance industry are already talking about it:

“Insurers are preparing to use people’s Facebook profiles and online spending habits as a way of setting premiums based on their lifestyle. The Sunday Times, December 2010

The article goes on to note:

“Studies for the insurers suggest that people’s online data detailing their food purchases, activities and social groups can be as good an indicator of their life expectancy as conventional medical examinations.

The trials were conducted by Deloitte Consulting LLP and showed that consumer data, based on a sample of 60,000 people, was as effective in identifying potential health risks as if the applicant for insurance had gone for a blood and urine test

Aviva, one of Britain’s largest insurers, is planning to introduce the new “predictive modelling” in Britain next year after studying the results of trials in America. Swiss Re is also working on a similar scheme.

The Sunday Times, December 2010

The bottom line is that in the next several years, at a very fast paced, the world of insurance is going to be challenged through innovation involving analytics and predictive modelling, performance based policies, and a whole series of other opportunity.

The future will belong to those who are fast!

Ask yourself this question: do you work in an organization that just simply doesn’t get it? Who is oblivious, blind, completely unaware of just how much business model change is occurring out there?

Here’s the thing — there are three types of people in the world:

• those who make things happen
• those who watch things happen
• and those who say, “what happened?”

I’ve often pointed this out on stage, and have emphasized the point, by suggesting that  the folks who find themselves last on the list sit back and say, “whoah, dude, what happened? Where’d that come from?”

In other words, they’ve been completely blind to the trend which would cause massive upheaval within their industry, or refuse to accept the significant business model disruptions which are already occurring.

Guess what — it’s happening right now as a lot of financial institutions don’t realize just how quickly mobile technology is going to change everything in the consumer financial services industry! Or in countless other industries where the blindness of current market leaders is leading them to their own “whoah, dude” moment.

So let’s make it simple: when it comes to innovation, make sure that you are in the first camp!

What should you do if you make that conscious decision, and are trying to steer your organization into the future?

• turn forward! establish an overall organizational culture in which everyone is firmly focused on the future while managing the present.
• change the focus: make sure that you link the corporate mission of today to the major trends and developments that will influence the organization through the coming years;
• pursue speed: use a leadership style that encourages a culture of agility and allows for a rapid response to sudden change in products, markets, competitive challenges and other business, technological and workplace trends;
• watch more stuff: establish and encourage an organization-wide “trends radar” in which all staff keep a keen eye on the developments that will affect the organization in the future;
• share more: make sure that you’ve got a culture of collaboration in which everyone is prepared to share their insight, observations and recommendations with respect to future trends, threats and opportunities;
• change responsibilities: ensure that staff are regularly encouraged to not only deal with the unique and ongoing challenges of today, but are open and responsive to the new challenges yet to come;
• take risks: you won’t get anywhere if you don’t make sure that are encouraged to turn future challenges into opportunities, rather than viewing change as a threat to be feared.

I continue to be stunned by how many organizations today continue to be caught flat-footed by the pace of rapid trends that impact them. It seems like it should be so simple to avoid this. Yet there likely still lots of “whoah, dude” dudes out there.

What happens when Silicon Valley takes over the innovation agenda within an industry? In this video clip from a recent keynote, Jim challenges his audience to think about what happens in the world of banking, particularly with the likely fast paced emergence of contact-less payment technology based on mobile devices.

Innovative organizations need to make sure that they understand the external factors that will influence their future, and need to react appropriately. And as we enter the era of hyper-connected intelligent devices, with the impact of location-intelligence technology and the rapid adoption of mobile technologies, we’re likely to see every industry — even beyond financial services — impacted.

New business models, disruptive competition, a shift in control, customer churn — everything is up for grabs once Silicon Valley seizes control and defines your future!

A key innovation message that I spend time with my clients focusing upon involves the concept of “thinking big, starting small, and scaling fast.”

(With all due respect, the thought process comes from a customer-service oriented strategy at McDonald’s many years ago, but it is easily extended to encompass innovation in general.)

What does the message imply:

• think big: identify the long term transformative trends that will impact you. These could include significant industry change, business model disruption, the emergence of new competitors, product or service transformation; anything. Essentially, you need to get a good grounding in the “big changes” that will impact your future over a five or ten year period
• start small: from those trends, identify where you might weaknesses in skills, products, structure, capabilities, or depth of team. Pick a number of small, experiential orientated projects to begin to fill in your weak points, and learn about what it is you don’t know. This will give you better depth of insight into what you need to do in order to deal with the transformative trends identified above
• scale fast: from those small scale projects, determine which areas need to be tackled first in terms of moving forward more aggressively with the future. Develop the ability to take your ‘prototyping’ of skills enhancement from the small scale projects into full fledged operations

It sounds simple, but its’ extraordinarily complex. Having said that, it does give you and your team a good conceptual framework for innovation, and orienting yourself to the trends which will provide you with the greatest opportunities and challenges in the years to come.

How might a company use such thinking? Let’s say you are in the banking industry. You know that mobile, text message, and location-sensitive banking trends are going to have a big impact on you. You know little about what is going. Think about how you might have redefined your customer service out on a ten year basis; where you might see new competitors emerge; and what you need to do to ensure that you stay on top of changing consumer demands. Then start small — take on a number of projects that build up the experience of your team with specific mobile technologies: how quickly can we get financial apps developed? From those ongoing efforts, build up the capability to scale — that is, separating the successes from the failures with these smaller projects, and learning how to quickly roll them out on a national or international basis.

Leave a comment : let me know what you think, suggest or ideas where you’ve seen the concept work!

I spend a lot of time speaking to global financial organizations — some of the world’s largest institutions — helping them understand what they need to do from an innovation perspective to stay ahead of fast paced change.

These talks are often aimed at the idea of “how do we need to transition our advisory services — financial planners, investment advisors, insurance agents and brokers — to keep up with fast paced change?”

Here’s a laundry list of some of the strategies that I’ve been talking about:

1. Focus on growth:With so much volatility in the financial sector, it’s all too easy to take your eye off of the opportunity ball. As I noted in my remarks for a recent keynote to a group of senior bankers:
   

   “Never before has the need for financial advice for Australians been greater; only 20% of Australians are currently getting professional advice.”

   That means there are tremendous opportunities for growth! For many, access to financial advice is still too hard and complicated – that’s why it’s a great time to innovate, in order to build market share!!!!

2. Structure for fast paced change: There are several certainties in the financial sector:
   

   • more business model change
   • more sophisticated competition
   • continuous business model disruption with new, young upstarts
   • continual shifts in consumer behaviour
   • technology-driven fast change, such as with the impact of mobile technologies

   Quite simply, an innovative financial organization concentrates on aligning its structure and capabilities so that it can change quickly

3. Reshape brand messages faster:
   Clearly there’s a lot of fast-paced change in financial services with the rapid economic pullback, and it’s critical that financial institutions continue to reshape their brand at the pace of rapidly changing consumer perception.

   Noted Jim Buchanan, Senior VP of Consumer Marketing at the Bank of America in an article in Advertising Age, October 2009:

   “Six months ago, we were trying to re-assure the market and consumers that we are safe and secure….now consumers are telling us they’re not worried about those things anymore…..What they are interested in is ‘How can you help me manage my finances?‘”

   Innovative organizations ensure that the brand message evolves at the pace of a world in which volatility is the new normal.

4. Adapt to momentum of financial consumer change: Quite simply, the new financial client is online in a big way, and smart financial organizations will evolve their service and support message to these platforms. The numbers are staggering; in the case of my Australian keynote, I emphasized that:
   

   • 147 million people interact globally on social networks via their mobile phones – we can expect 1 billion within five years!
   • there are 1.6 million Twitter users in Australia – up 1,000% from last year
   • Australian’s now spend 16.1 hours a week on the Internet, compared to 12.9 hours watching TV
   • 25% of that time is spent on Facebook

   The impact is clear: as noted by Mondaq Business Briefing in November 2009: “Australians visit social networking sites more often than financial services sites.”

   The bottom line for financial and investment advisors is that social networks are an extremely effective tool to keep core clients in the loop; as an outreach tool, they’re fast, effective, unique, quirky, and certainly the story of the day. The bottom line is that financial advisors have to go where the client is going, and should be thinking about how to become socially-networked oriented advisors.

5. Adjust platforms to this changing behaviour: I continue to emphasize with my global financial clients that the impact of mobile technologies on financial services is absolutely massive. Think about Wizzit, a South African service that is essentially a text message based banking system.The reality is that the new financial consumer expects to be served on new platforms: as noted by Thomas Kunz, Senior VP at PNC Financial:
   

   “Gen-Y doesn’t reconcile checkbooks, and they don’t believe in float. For them, their balance is their balance.”

   That’s why PNC has released a “virtual wallet app” available for iPhones. They’re reaching out to this new financial consumer in a big way.
   

   Aggressive change with business platforms provides big opportunity for business model disruption. A key factor here has to do with new client acquisition: what’s happening is the point of origination of the relationship might change as people transition their banking to mobile devices. Opportunity can come from continuing to build the advisor and distribution channel into these new platforms.

   And that’s not a threat – that’s a huge opportunity!

6. Leverage off of new peer-to-peer behaviour trends:
   The new financial consumer relies more than ever before for advice from their social networks.Peer-to-peer social driven advice through sites such as TradeKing is coming to the forefront: it’s a service that allows people to share stock tips and research through extended social networks.

   Does this diminish the role of advisory services — not at all, if you dive in and become a part of the peer-to-peer conversation!

7. Re-orient distribution channels : Here’s another key point: I’ve emphasized to my insurance and other financial clients that the next-generation advisor/broker/agent expects ever more sophisticated technology platforms to help support their role.You’ve got to make sure you are keeping up with their needs. In one survey in the insurance sector, 80% of brokers indicated that the sophistication of the technology platform of the provider would influence who they would choose to do business with.

   According to Kevin Murray, EVP and CIO at New York-based AXA Equitable:

   “The younger generation of financial professional will almost demand online self-service….they will want to text any questions they have in to the service centre or self-service from their mobile device. We’re going to have to be able to provide that capability. It’s how they will operate.”

8. Build your own peer-to-peer collaborative knowledge networks: The new financial advisor is also thinking socially, and is actively looking for peer-to-peer collaborative knowledge.Imagine building a financial advisory team that is collaborative for ideas, shares insight on market wins, constantly leverages insight from new branding campaigns that work in unique ways, and constantly shares great ideas on new methods of converting leads into clients — that’s how this next generation works!

   Back to Kevin Murray:

   “They will also want an online collaboration tool to …find answers concerning product or questions from their customers. The X and Y generations are going to demand a different way of selling and servicing their customers.”

   What’s it really all about? Freeing up their time to build opportunity, make sales, close deals.

9. Reduce churn through electronic relationships: Here’s something else to think about according to Chief Marketer (October 2009),
   

   “The average brand saw one third of highly loyal consumers in 2007 completely defect to another brand in 2008“.

   People are far less loyal, and far more likely to jump ship at the drop of a hat. That’s why continuous innovation in terms of the relationship is critical — and that’s maybe why continually transitioning to new technology platforms such as an iPhone app might
   reduce that churn

10. Better, more focused niche marketing: We’re in the new era of analytics and analysis, which provides new opportunities for advisors to reach out to markets previously unattainable. As noted by Money Management Executive in October 2009:
    

    “Financial advisers generally prefer to manage a small number of high-net-worth clients rather than a large number of small accounts, but recent advances in automation technology could change this dynamic.”

11. Innovate hard with the next generation: one of the biggest trends going forward is that right now, we are witnessing the early stages of a massive transition of wealth from one generation to another. The numbers are staggering: we’ll see $12 to $18 trillion in intergenerational wealth transfer In the next 12 years (US GDP is $12 trillion); and by 2053, some $130 trillion will have moved from one generation to another. That’s a lot of money sloshing around — and much of it is going to this new, tech-savvy financial consumer.
12. At the same time, rethink importance of boomer market: It’s easy with all of these points to think that new markets will come from new, uber-hip young people and hot new technologies. But don’t stop with innovating with that market — also realize that there continues to be huge growth potential with the boomer market. In Australia, baby boomers will control 51% of the nations wealth. Put that in the context of the reality that there is a huge adoption by Boomers of Facebook. They continue to more aggressively integrate technology into their lives; they’re busy researching health care, insurance, retirement planning and investment advice. Online makes more sense than ever before — get your advisors there!
13. Evolve the approach: Insurance and financial services are products that are always sold based on fear — they aren’t bought. This reality doesn’t go away because of new technologies. What does change is that technology is a powerful enabler that frees advisors from having to focus on the mundane, routine, time wasting stuff, in order to focus on providing the advice & guidance that advisors can provide. Focus on the core role!
14. Enact change: Many advisors will be in comfortable, established routines. Change is not easy. That’s why organizations in the financial sector that are trying to be innovative need to help existing advisors focus on the opportunity and the benefits that come with rapid change, rather than being fearful of the change that technology is bringing to the industry.

Bottom line? As I summed up in my talk — “Innovative organizations make bold leaps, in order to keep up — and stay ahead — of a faster future.”

I had quite a few financial oriented keynotes through the last year, for banks, mortgage groups, credit unions and others. If there was a key theme as to the insight my clients were seeking, it was this: what are the BIG trends that are going to impact us (I’m a futurist), and what do we need to do about it (I specialize in insight on what global leaders are doing in the area of innovation.)

The scope of some of these engagements is pretty significant; Diners’ Club featured me as the opening speaker for their global franchise conference; my focus was on the big trends that would impact the organization into the future.

I guess I had generated enough buzz on my theme within the financial services industry such that I was booked for a keynote down into a major bank in Sydney, Australia, via a fibre optic link. (I couldn’t make a flight connection work!)

What should financial executives be thinking about? There are dozens of significant trends. Perhaps the most important has to do with the fact that 2010 is the year that location intelligence is coming to the industry as a significant business model disruptor.

Here’s a snippet from an article that captures a bit of what I’ve been talking about. The world of banking is going to witness massive change as mobile and location intelligence technology becomes married together. Consider:

Jim pointed to an Australian study that found 65 per cent of children in preschool today will work at jobs that don’t exist today.

“Think about the concept of a location intelligence professional.”

He discussed the possibilities presented by marrying smartphones equipped with global positioning systems to spatial-oriented information websites such as Google Maps.

“In the not-too-distant future, it’s quite likely some real estate organization is going to roll out an iPhone app that you will go through and you will pre-identify the types of properties that you’re interested in. It’s going to use the location capabilities built into the iPhone to build you an interactive tour of those properties. And you’re going to use your (iPhone) to drive around the neighbourhood and look at these homes through your phone.”

The same application might refer users on to a mortgage broker, he said.

“What do you do when the essence of your business model and the nature of the referrals that you get into your business begin to change?”

Halifax Chronicle Heradld, “Expert: Essence of life is change”, November 25, 2009

Give me any financial organization, and I can give you an organization that likely isn’t prepared for the fact that their innovative agenda is going to be subject to some pretty significant change.

What I’ve been doing is outlining for my clients the trends that are going to impact them, and the innovative thinking they need to pursue to capitalize upon those trends.

One of the columns I write on a regular basis is for CAMagazine, which goes to about 100,000 professional chartered accountants. My big secret? Despite the fact that I spend my time advising some of the biggest organizations in the world on strategies for innovation and creativity, I’m also a professional accountant. I spent some 12 years way back in the 1980′s with one of the world’s largest professional services firm.

My June column is out — and it talks about the challenge of trying to reconcile the emerging demands for more financial disclosure with the short attention spans that come with the Twitter era.

You can access the full article below; but here’s a few excerpts:

We stand at a seminal moment – a crossroads as it were – between what we might call the new age of disclosure and the new era of inattention.

….we will see all kinds of new rules and regulations within the financial sector and beyond, including most of the business world. Let there be no doubt, in the year to come we will witness a new, onerous set of regulations surrounding financial disclosure….

On the other hand, while we ponder an emerging need for more detailed disclosure, media reports seem to indicate that the general populace is rushing off to Twitter-ize itself.

So here’s the thing: to satisfy the demands of angry investors, the typical 10Q and SEDAR filings will have to quadruple in size, if not more. Pretty soon, a typical public company will need to file several thousand pages of disclosure documents to keep up with regulations. Financial statement footnotes will become complicated enough to deserve their own dead tree. An army of accountants will find itself dedicated to the cause of digging deeper with every single sentence.

At the same time, the audience for whom these lengthy documents are targeted is concentrating on writing 140-character texts.

So, the big question is, what is the relevancy of accountancy in the Twitter era?

Might you instead find yourself one day writing a financial disclosure that goes like this: Qlfd opn’n. Gng Cncrn vr m2m vln on unreal(dude!)ized rvnu.

If you understand that, then your brain synapses have shrunk enough to fit the speed of information in the modern age.

Read the article Accountancy in the Twitter era

I’m off to Austin, Texas today, where I’ll be the closing keynote speaker tomorrow for the annual meeting of the Texas Credit Union League.

My role is to motivate and challenge the audience to continue to focus on applying innovative and creative ideas to their businesses, given that there is constant change within the financial sector. Not just due to the financial crisis, but also due to rapidly shifting consumer behavior, the rapid emergence of new technologies, and the extremely fast development of new business models.

Particularly with the idea of mobile banking!

Take the story of Wizzit (which boasts the slogan, “With Wizzit, you have your bank in your pocket“), based in South Africa. 200,000 South African’s have signed up for the service, in which they pay bills, store cash like a debit card, transfer funds, and send remittances. Wizzit is completely text messaging based.
Accounts can be opened in 30 seconds via a call center, and are sold via Wizzkids (It’s based upon the JetBlue model – with these representatives working at home). Plans are to expand the business model into Eastern Europe, according to Bank Technology News.

Then there is the story of Guaranty Bank in Turkey, which boasts $61 billion in assets. They set up a mobile banking portal — and in the first two months, saw 1 million page views, 50,000 customers, 30,000 transactions and $24 million in transaction volume.

Today, they’ve got 1.3 million mobile banking customers, and believe that the service is accessible on 5,100 cellphone models.

Quite clearly, mobile is going to play a huge role in financial services, and it’s happening NOW!

On stage, I’ll be challenging this group to realize that their future success will come from their ability to respond to rapidly changing products, markets, business models, rapid economic trends, and competitive. In that way, innovation isn’t just about new products — it’s about responding to the reality that in every industry, faster is the new fast.

More information

• Wizzit Web site
• Innovation in the financial sector – related post

I was the opening keynote speaker for a major credit union conference. In the room were the CEO’s and Board members for several hundred small to medium sized CU’s. This coming week on Friday, I’ll be the closing keynote speaker for the annual conference of the Texas Credit Union League in Austin. I spend quite a bit of time speaking throughout the financial sector.

One constant is that I always challenge my audience to think about how to become an agile, high velocity, innovation oriented organization. This isn’t simply an organization that has a constant stream of new products : it’s an organization that also responds to all the rapid change that is swirling around it.

From my slide deck, I’m outline that high velocity innovative organizations prepare for:

• the rapid emergence of new technologies
• rapid shifts in market fundamentals
• the rapid emergence of new business models
• rapid shifts in customer behavior
• a need for rapid scaling to adapt to this rapidity
• constant rapid shifts in marketing outreach methods
• rapidly changing consumer sentiment
• constant challenges in building and maintaining brand relevance.

Through the week, I’ll post some observations from my slide deck on each of these points, but let’s take the first issue as a starting point.

I’ve long been suggesting that the financial sector is soon going to find a tsunami of change as our iPhones, Blackberries and other mobile technologies become the new form of credit card payment technology.

The New York Times reported on the trend this weekend, in an article, Visa introduces a credit card on a phone.

The rush to “contact-less payment technology” is going to happen, and it’s going to happen faster than most people in the financial sector think. It’s being driven at the speed of Silicon Valley, and some financial institutions — and many many credit unions — are still operating at a far slower pace. As a result, they can often be caught flatfooted by dramatic technological change, and end up having their business model disrupted in a substantial way.

On stage, I challenge this senior level type of audience to realize just how quickly everything around them is changing. In order to be innovative, they need to understand the new technologies that will impact them, and be prepared to ingest them at the rate that the market demands.

That’s a critical form of innovation, and sadly, there continue to be a lot of organizations who aren’t into that reality. That’s why there are so many organizations having me in to talk about how to become an “innovator in the high velocity economy.”

More information

• 2009 Texas Credit Union League conference
• Visa introduces a credit card on a phone
• 2009 Financial & banking innovation awards

My latest CAMagazine article is out.

In January, I was invited to address a group of CIO’s and CFO’s from some of the world’s largest insurance companies — a pretty heavy duty crowd. My challenge? Get them away from focusing just on the here-and-now, and think a bit about some of the challenges that tomorrow will present.

Part of my voyage took them into a view of what their industry might look like ten years out. Here’s a few extracts:

Are you ready to open up your accounting and financial systems to the Facebook generation? In 10 years, that won’t seem like a silly question. But even today, it’s an issue you should think about

In the next few years, we are likely to enter the world of the “accounting mashup,” in which customers, suppliers and business partners start to interact with you through online widgets. As this happens, you’ll discover new business models that will provide sales opportunities, streamline customer support and reduce operating costs.

Young people entering the workforce are able to instantly and easily reshape information so that it is more accessible, shareable and far more interesting. They’ve taken to the world of music and video and have learned how to reassemble bits and pieces into something new.

My favourite music mashup, from years ago, came from a DJ group known as The Kleptones. Their “A Night at the Hip-Hopera” remix took a swath of music from Queen, wrapped it around other sounds and songs, all in a story about early attempts by the music industry to shut down music sharing.

So what does this have to do with accounting? Who is to say that the Facebook generation isn’t going to look at the Best Buy Remix idea and rethink the whole concept of an accounting system in light of that? Why would we expect them to sit in front of a boring web browser, reviewing data on a boring ERP screen? Why would we not consider the possibility that they might write a tool that gets things done in a different way?

Predicting the future often involves the extrapolation of current trends. Given that mashups are a big part of youth culture, it shouldn’t be surprising that we’ll find the concept making its way into business in the next several years. Get ready!

More information

• Read the full article They’ll spice up your systems

Back in January of this year, I was invited to address a meeting of insurance executives on behalf of a global consulting company. It was a small but powerful group; in the room were Chief Operating Officers and Chief Information Officers for some of the world’s largest property and casualty insurance companies. (The client that booked me prefers to remain anonymous.)

I was asked to provide my views on the challenges and opportunities that the property & casualty insurance industry might face in 2015. These included a number of issues:

• unavailability of niche skills due to increased underwriting complexity. Quite simply, faster change and faster science is leading to unique issues in assessing insurance risk, with the result that skills become far more specialized and unique.

• the likely emergence of “social financial widgets” - this is the focus of an upcoming column for one of the publications I write for. Take a look at BestBuy’s Remix project, which allows developers to write code that interacts with the online catalog of BestBuy. Extend that thinking to the insurance in the future: the next generation insurance agent will write their own widgets that allow for the quoting, sale and binding coverage of a policy, within their own social-Website page.
• the implications of pervasive connectivity upon the insurance marketplace. We’re entering the era of smart highway infrastructure, and automobiles that increasingly take over responsibility for navigation. What happens with insurance risk as this occurs?
• the impact of computational analytics on risk assessment ; quite simply, we’re witnessing the emergence of highly sophisticated analytical programs that can undertake entirely new ways of assessing claims fraud.
• the impact of location intelligence and the re-engineering of the underwriting process. I often tell the story of how how some leading edge insurance executives realize that there is an opportunity to link spatial, i.e. Google Maps information, to public databases on crime, education, accidents, health care, income and other factors, in order to come up with new ways of assessing insurance risk.
• velocity of brand relevance: any brand today, including insurance products, must be seen to be fresh, up to date, and with the times. The next generation of customer are going to demand insurance products that are interactive, constantly changing to meet new needs, and which keep up to date with fast social and technological change.

We had a wide ranging discussion about opportunities for innovation in the industry, and explored a variety of ideas for distribution channel, underwriting, claims and product innovation. All in all, it was a wonderful event with a lot of unique insight.

Right now, of course, most insurance companies are in a “lock down” mode as they navigate the global recession : but savvy insurance executives know that they need to be planning for these and other key trends soon.

I just finalized my review of the entries for the 2009 Monarch Innovation Awards; for the second year in a row, I’ve been one of the panel of judges for the awards.

The awards are presented by Barlow Associates, a leading banking industry market research organization. As their press release notes, “the awards honor innovation in the financial services industry and seek to recognize financial institutions that provide the most innovative products to business customers and to recognize risk takers who create/promote innovation within their organizations.”

Given all the turbulence in the financial sector, it might seem like an odd time to be focusing on innovation – but it’s not. Cast your mind forward just a few years from now, and think about what we’ll see within the business banking sector:

• a good part of our financial infrastructure will have migrated to mobile platforms people will think it normal to conduct banking via SMS transactions; a good chunk of the current credit card infrastructure will have migrated into our cell phones, Blackberries and iPods;

• Gen-Y will have a different type of financial relationship, and are likely to use those financial brands that “stay ahead” in terms of technologies, capabilities and other factors;
• existing banks will find their markets and brands increasingly challenged by technology companies, particularly mobile platform organizations, as well as disruptors from other industries such as accounting and ERP software companies
• we’ll see increasing financial sophistication in the small and medium sized business sector; the ability to scale internationally financially will become an increasingly important success factor, and this trend will be one of the key drivers behind the coming economic recovery

That’s why awards like the Monarch Innovation Awards are important; they celebrate the heroes who are still busy innovating, staying ahead, and positioning their organizations for the future – because they know that trends like these will provide for significant market and business opportunity in the future.

I referred to them before when I wrote my Memo to the CEO some time back, pressing a message that as CEO’s of financial organizations navigate the turbulent water around them, they should ensure they also have a team that is firmly focused on future trends.

More information:

Read the Memo to the CEO

Reuters press release: Barlow Research Announces 2nd Annual Monarch Innovation Awards

This dude to the right? He’s about to inherit a whole whack of money.

Indeed, before the financial meltdown in the last month, the slides I used at a wide variety of financial, banking and insurance conferences noted that the issue of inter-generatlonal wealth transfer is a huge challenge and opportunity. Estimates suggest that we’ll see $12 to $18 trillion in money moving from one generation to another in the next 12 years ….. put that up against US GDP of $12 trillion. Cut in half for the stock market crash, and it is still a staggering number!

By 2053, the number will total $130 trillion – and the funds will move to a far more independent, financially savvy, technically sophisticated generation.

How do you maintain your relevance to this next generation customer? Through innovation.

Here’s something of interest: despite the caustic conditions throughout the global banking and insurance industry, there are still a huge number of senior executives who are focused on the key trends that will impact them in the future. They do know the one thing that I know to be true: one day the volatility in the banking and insurance sector will have gone away. Things will have calmed down, and we’ll have a banking, insurance and financial sector that is “back to normal.” Or, at least, a “new normal.”

And we also do know this: once we come out of “this thing,” organizations will be back to the old-fashioned, pre-hedge-fund-derivative-fuelled ways of making money: by coming up with innovative new financial products and services that solve the problems of customers; by excelling at customer service; by launching and nurturing innovative new brands that resonate with customers; through deep, fast and transformative marketing campaigns that form unique relationships with customers. In other words, innovation will be the most critical measure of future success in the banking and insurance sector.

So how do we get there? I’ve had a few leadership retreats in the last two months with a number of global and national financial groups who are already thinking about these issues; they’ve asked me in for my thoughts on linking future trends to an innovation agenda as part of a leadership offsite. (Obviously, given fast paced trends, I’m not going into a list of companies. Suffice it to say, there are some senior leadership teams who are busy ensuring that their companies are ready for the next phase in financial services.)

What am I speaking about? Grabbing bullets from a few of the slides that I used:

Agility defines capability

• success is defined by ability to respond to rapidly changing products, markets, business models, rapid economic trends, competitive moves, skills issues
• innovation moves from more than just “products” to process, ad analytics, methodology, structure, capabilities, scalability, collaborative ability …. productivity

It’s about staying out in front of client / broker expectations. That’s why you need to be able to

• scale faster
• deploy faster
• focus narrower

Certainties we know going forward: we’ll be in an era in which we have to constantly rebalance strategy, because of certain certainties five years out:

• business models will be continually redefined
• category dynamics and distribution models will be transformed and subject to external pressure
• products will be re-invented at a more rapid pace, particularly with fast changing actuarial assumptions
• brand perceptions will shift quicker, particular as new “influencers” in branding come to be more prevalent (Web 2.0 etc)
• target customers will be more challenging and far less loyal

What do you do about this? One of my closing slides had this to say: “To grow in fast paced, volatile markets, focus on strength through partnership..” That will get you there quicker.

Key point: financial services, banking and insurance innovation hasn’t gone away. It’s going to come back with a roar, and the leaders in this industry are positioning themselves now.

I don’t want to distract from the seriousness of the events unfolding on Wall Street, but check out these headlines:

• American banks face financial meltdown if their reforms fail.
• Mortage Meltdown!
• Bloody and Bowed — Money Managers Remain Badly Shaken by the Meltdown.
• Market Cap Meltdown — Billions in Blue Chip Stock Values Have Been Blown Away.
• Congress caught in a bind over bank crisis.
• Crisis Looming As Realty Slump Becomes Global

Now consider the date these headlines appeared:

• Banks face financial meltdown if their reforms fail, The Times, December 1990
• Mortgage Meltdown, Toronto Star, December 1989
• Bloody and Bowed — Money Managers Remain Badly Shaken by the Meltdown, Barron’s – December 1987
• Market Cap Meltdown — Billions in Blue Chip Stock Values Have Been Blown Away, Barron’s, October 1987
• Congress caught in bind over bank crisis, Independent, November 1990
• Crisis Looming as Realty Slump Becomes Global, American Banker, October 1990

Maybe it’s that the news media is being environmentally responsible and is recycling news headlines?

The events as they are unfold are tragic, and there are people losing their jobs. We’ve yet to see where it will all go.

On the other hand, it needs to be put into the context of previous “meltdowns”. We’ve been here before, folks. And at the end of the day, there will still be banks, insurance companies, investment organizations, and a financial system.

I wrote about this a few months ago, and put together a “Memo to the CEO” that examined the issue of innovation. Maybe it’s a good time to resurrect for those organizations that are concentrating on getting through this mess and moving on to the next stage. As we come out of it, it will be those focused on innovating within the new marketplace who will come out on top.

More information

• Read the Memo to the CEO

I’m in Vancouver, about to deliver a keynote to a global professional services firm, with the working title, “Extreme Skills Specialization: What Comes Next with Global Talent, Global Organizations?”

The working description goes like this: “The future of every career is either extremely specialized, or
massively general. Most professions are fragmenting into dozens, if not hundreds or thousands of specialities. Someone needs to understand all this, and help organizations tap into narrow bands of knowledge.”

This is a major trend, and perhaps one of the defining trends of the next 10 years. Here’s how I’m presenting the challenges to my audience today:

• the ability to assist your clients with high-velocity change will be a key success factor

• because of this, the ability to find, attract utilize and retain ever more narrow niche skills will be critical, for both your clients, and yourself.
• the ability to scale up and scale down your resource base will define your clients success, and your own.
• our ability to access and deploy unique skills at high velocity, globally, forming project oriented teams that last but a short time, will be key.

Think about these challenges in the context of your own organization. Ask your this questions: “what’s the depth of your bench strength?”

Then ask this question: “what do you need to do, from a unique structural perspective, to increase and improve your bench strength, particularly as skills become more specialized, scarce and hard to access.” There’s probable room for lots of innovative thinking there!

At my keynote to the US Association of Actuaries this week, and for a keynote to LOMA last week (an insurance association conference), I played a series of maps that showed the rapid emergence of obesity in the US population from 1995 to the present day, The maps were provided by the Insurance Information Institute.

I challenged the audience to think about what will happen through the next five years: we will see the emergence of “location intelligence dashboards” that will allow such professionals, to examine in real time, the emergence of new risk factors in their industry.

Location intelligence is coming about as organizations learn to link massive stores of information and research to spatial — or map oriented (i.e. Google Maps) information. An entire new profession is emerging at the same time — location intelligence professionals.

This is part of an overall sweeping trend, in which computational analytics play a massive role in the emergence of new careers, businesses and industries. We are entering a time that involves the rapid processing of massive stores of information and unique new ways of analyzing information.I talk about this extensively in my future oriented keynotes and is a topic that is covered in several trends documents on my site.

More information

• Read about “location intelligence” in Five More Trends To Define Your Future
• Analytics is hot : “What comes next?”
• Insurance Information Institute report 0- Obesity, Liability, and Insurance
• Directions Magazine – The Worldwide Source for Geospatial Technology

I just came back from delivering the opening keynote for the annual meeting of the US Association of Actuaries. This crowd is the risk assessment side of the US life insurance industry, and given the rapid pace of change, their job has become much more difficult through the last several years.

They know that. They also know that there are many who don’t understand the critical role that they play, and so they set out to change that last year, by refocusing on a re-branding of the profession.

It turns out that they did a great job, having just picked up the Corporate Branding Campaign of the Year 2008 from PR Week magazine, even beating out “uber-cool” Tesla Motors.

The re-branding campaign fits with the challenges they are faced with: as the economy speeds up, they have to continually migrate their skills, capabilities and knowledge in order to continually assess new and more challenging forms of risk. One of those new skills might involve their transitioning to the role of “location intelligence professionals,” a trend I’ve written about here. This would involve learning how to marry the vast stores of information on current policy holders to the vast sources of “spatial” (think Google Maps) information emerging online, to come up new forms of assessing insurance risk.

For example, during my keynote, I played a one minute movie of a US map that featured the emergency of obesity in the US population over a 25 year period beginning in 1993. I suggested they might view this, and think about what they could do if they had this type of insight as a “location intelligence capability” on their desktop.

They’re a hot profession, because analytics is hot, mathematics is the new plastic, and they’re in the midst of it. It should be a fun ride for them!

More information

• Read about “location intelligence” in Five More Trends To Define Your Future
• Analytics is hot : “What comes next?”

Over the last several months, I’ve been incorporating some live text message polling into my onstage presentations.

Yesterday, at an insurance industry conference, I put up a quick poll, and gave the audience three minutes to text message their answers in. It’s quite a bit of fun, because the results begin to appear automatically on screen — and are constantly, dynamically updated.

Here’s what’s fascinating: out of a crowd of about 300 people, only about 25 managed to get an answer in! There were a few reasons for this; first, since the A/V screen wasn’t great, it was hard to see the text message number, and I actually called out the wrong number for the first minute and a half – until someone pointed out my mistake! But at the same time, it was obvious that a good chunk of the crowd — baby boomers and up — had no clue how to send a text message.

I used that observation to point out to the crowd that they’re in a pretty dangerous spot if they don’t understand some of the tools that are fundamental to the life of their Gen-Y and Gen- Connect customers. Key message: if you are going to innovate, you better make sure you understand your customers. The next generation is going to demand a completely different, highly interactive “insurance experience,” and text messaging, Web 2.0 and other tools are going to be a part of that mix.

To do these online polls, I’m using the Polleverywhere service, which offers a number of innovative mobile solutions, including a “text from your Web site” capability. Services like this are at the leading edge of innovation when it comes to linking the Web together with the vast world of text messaging. Recent estimates suggest that every day, there are more text messages sent than their are people on the planet.

The quick polls, incorporated into a keynote on stage, whether with a group of 300 or 3,000 people, provide for a huge degree of interactivity with the audience, and provide for some really exciting dynamics on stage.

More information

• Polleverywhere Web site

Here’s something to think about: we are going to see $12 to $18 trillion in intergenerational wealth transfer in the next 12 years in North America. (US GDP is $12 trillion). By 2053, $130 trillion will have moved from one generation to the next, in rolling waves of wealth transfer. All this will involve monies moving to new customers who are far more independent, financially savvy, and technically sophisticated.

In other words, tomorrow’s customer is going to be completely unlike the customer of today. That’s why innovating — keeping up with the future – is critical!

Tomorrow I keynote a group of professionals in the life insurance industry. Next Monday, I keynote a national Association of Actuaries; the following week, an international accounting and professional services powerhouse. Last week, a major bank and a number of wealth management firms. The heavy duty theme this month is the world of finance!

Here’s the thing about anyone doing business in financial services: you can drown in all the noise and short term hype and hysteria that involve markets and economies in rapid change.

Or, on the other hand, you can manage through that, and think about the innovations that are set to occur through the next five years. Focus on those, and there’s your future strategy.

Here’s what’s certain in the insurance industry: someone will do one or more of these things, in a big way, that will cause significant and long lasting market disruption and transformation.

• they will redefine the business model (particularly in insurance): for example, health care costs worldwide are set to explode, and the system will implode. Someone will ride this obvious trend and do something transformative that forever changes the industry. It’s not about managing health costs; it’s about redefining the concept of health care. Think bio-connectivity, and health care rearchitecture.
• they will transform how business is done in the industry.Today, it’s still an industry that is still about brokers and distribution. Insurance is sold, not bought, based on fear of the future. That’s set to change. Tomorrow, smart widgets on top of a legacy insurance platform? The concept of “disintermediation” has been around for a long time, but here’s a certainty: tomorrow’s 50 year old is a very different animal from today’s 50 year old! Gen-Connect expects much more!
  
• they will redefine the product. Today, we buy life insurance and health care insurance and other “products.” Someone will figure out that people don’t want products: they want their own unique, self-defined, self-managed solutions, that likely include multiple solutions from multiple sources. Think “iPhone meets the life policy!”
• they’ll change the brand perception: fast movers will transform the product and services that are offered, by offering faster-paced, more relevant brands to consumers who aggressively self-manage every aspect of their daily life. Think Geico.
• they’ll constantly change the target customer. Today, insurance is sold to groups of employees, directly to individuals, and to affinity groups. Tomorrow, it will be sold to rapidly evolving, temporary fast-moving customer targets. Think portability: if the typical person will have 30 different careers and 50 different jobs in their lifetime, they’re no longer a captive customer!

Is that a bunch of babble? Not really. Five, ten, twenty years out, the insurance industry will look unlike anything that we know if it today. Market transformation is everywhere, and its’ going to sweep this industry faster than fast.