Many people outside the Social world of News and Finance will be unsure what the word “FinTech” means or they will ask if it is just another made-up business jargon buzzword.
Yet it’s something has been around for quite some time and one that all aspects of the business community need to embrace in so many ways as they are at the forefront of Social without them even knowing it!
Even many marketing people, companies and agencies are missing this fact!
What you have to do is basically separate the actually term and see where and why FinTech is the leading player in Social….
FinTech = Finance and Technology
Finance:-
For many years, the Finance community have been held within the boundaries of legislation and lots of regulation as to what they can and can’t do. Due to these circumstances you’ll have had people ask about whether you have investments or pensions and this enquiry to you, is either via a friend or a referral from a friend or family member. If you have used Brokers or Advisors, you’ll know that they will ask that if you are happy with how they are looking after you, could you give them three people’s names you know, so that they could speak to them – isn’t this Referral Marketing?
Again, look at the banking sector, they aren’t really advertising/promoting themselves to you, they are highlighting their products and what they can do/offer (where regulations will allow). However, when they want to promote themselves or look at expanding, they more often than not, offer incentives to you, where that if you introduce a family member or friend to the Bank or Building Society, they will either give you a reward or provide a reward to both you and that person becomes a client/customer – isn’t this Referral Marketing?
As the banking sector took off, the bank then decided it needed another location, so around the town/city, the bank opened more locations and this then extended to the surrounding area to service more and more people. Over time, this name extended and then mergers and takeovers took place. Thus the banks name become known further and further afield. People would start using the bank that either their friends or family would recommend (or in some cases, your company would get their bank to open an account for you, so they could pay your wages into). Thus, people went to that bank because of the name they knew. If you look as building societies, most of these would be named after the town or city they started in and thus, people choose to use them as saving or deposit locations and then buy their houses through, as these were names they knew, could trust and felt safe with. In both situations – isn’t this Social Branding?
Is it that Referral Marketing or Brand Recognition are the foundations of both Social Branding and Social Selling?
Technology:-
With more and more technology appearing to help to speed up and improve our lives, technology companies are bringing out new technology to allow us to be more in touch with each other daily, whether we want it or not!
However, where did most of this technology come from?
Wasn’t it Finance?
Whether you like it or not, Finance has actually been the forerunner of Technology for longer than technology has been around!
If you don’t think so, just go back to when banks, building societies and insurance companies first appeared. What did they do? Whether it was a place to secure your money, a savings place for schemes (like where you could place your money as funeral fund or university fund for example), saving/investment schemes and pensions, you either took the money to them and deposit it or someone collected it from you. All these transactions were written down and then they were entered in to filing/record system or ledger. These paper records contained all your transaction history and if you wanted to withdraw the money or check on the funds/schemes you had saved with, they would have to look these up in their records. Wasn’t this the start of databases and CRM’s?
If you wished to withdraw money, they would see check the records to see if you had deposited enough to match the amount you wished to withdraw. If the records were less than the amount you wanted, you couldn’t make the withdrawal. Over time, the idea of lending, borrowing and buying items like houses, started to arrive. However, if you wanted to do this, you’d have to meet with the manager, who looked through your records to make a decision on whether he would lend you this money or not. Wasn’t this the start of Credit Scoring?
As times progressed and we started to receive items like telephones and telephone/hard wires. Banks and building societies were then able to be connected with their other locations and thus, you could then go to a different location/branch to withdraw or pay your money in. The ability of introducing centralised record keeping, to record your payments and history allowed you to use any place your bank or building society had a location and sometimes, if you wanted to withdraw money, you’d have to book an appointment or wait whilst they rang through or checked the system to see what money you had before authorising it. Wasn’t this the start of networked working and centralised systems?
During this time, the banks then started to look at what was a big gamble for them as it involved trust (plus, if you failed to honour this, it could and in some cases was a criminal offence!) and they introduced cheques. Some say it was the rich not wanting to spend time queuing at the bank to get their money or carry lots of money, but the arrival of cheques allowed that piece of paper to pay for items/services with no physical money changing hands. Then to make things easier and to speed things up, if you just wanted to take some money, why wait in a queue and thus, the arrival of the cash machine arrived. Thus the issue of the cash card allowed you to withdraw your money with no more queuing – how much easier was that? Then, as you had this card, could another card do just as well for you by allowing you to pay for things and then pay later? As a result, we then saw the arrival of the credit card were you brought something, could have it there and there and then pay later which improved our lives but also helped to fuel a society built around debt and not everyone could receive one based on their credit scoring. So, if you wanted something but had the money but not with you, how could you buy or pay for it? Well the arrival of the debit card meant that you could choose something, ask to buy it, and the retailer would via a card machine connected to your bank, either approve or decline the purchase. Wasn’t this the start of a cashless society?
So, as you’ve seen above, the banking/finance industry has taken items and really delivered so much that we take for granted every day without us realising that if it hadn’t been for the Finance Industry, many of these things would have never happened.
Yet, we still don’t realise that the finance industry impacts on our daily lives so much each and every day.
So if you look at what the finance sector has done, they have seen what is happening ahead of time, what is needed and found a solution to help society as well as providing a solution that is socially accepted and wanted by us all.
Isn’t this all down to bring together two things to make one aspect that is here in our everyday lives but we don’t realise?
Social Engagement plus using Social Collaboration – both items have come together via embracing the Social Community ethos.
Finance drives and delivers technology…….
Whether it be Selling, Branding, Engagement, Collaboration or Community – the Finance Industry is one of the real founding fathers of the Social Eco-system, yet we want more…..
So, as we want more – the idea of improving and making things easier, has seen us move from paper record keeping to centralised networks and systems and thus, though analysing how we spend/save our money, produce a system where our credit scoring rates whether or not we can move forward by having a loan, buying a car or house – effectively controlling our lives.
Thus, this technology has not only helped to establish how we move forward with our spending, but improve the way we work by improving systems and speeding things up. Yet, this never seems to be enough for us….
Technology has embraced what was the cash, then credit and debit cards to use the card technology in other areas.
Card technology is used for access and security controls by verifying whether we have permission to go/enter somewhere – isn’t this just like cards authorising purchases?
The card has taken huge in-roads to replacing paper, so instead of collecting stamps, coupons and vouchers, we now have loyalty cards which can track/record our purchases and give rewards based on these transactions – isn’t this just like credit cards recording our purchases, detailing what we’ve brought and showing us our rewards just like a card statement?
At times of been given gift vouchers, gift cards and coupons now been replaced by stores giving us cards pre-loaded with money to spend or that we can add money to these cards so we can make purchases within these stores via stores cards – isn’t this another example of a cashless society?
So, as you can see finance has really embraced Social, Technology has embraced the ethos of what Finance has delivered but what does all this mean?
Finance plus Social plus Technology plus Finance equals FINTECH!!
With FinTech now here and really coming to the forefront of our lives what does this mean for us all?
Relationships = Social = Relationships
The business world now needs to look at how FinTech has grown over the last two years and start to embrace the whole ethos of Social but why?
The simple is that Social Relationships is the key moving forward and we are coming full circle. Again this falls back to having to thank itself for this via the finance industry and now it’s being taken to the next level by the technology industry!
The finance sector grew from the Social aspect of people lending money to them by trusting them to take this money and make it grow for them through these institutions having a Social Responsibility programme to look after their customers money. Because of how they operated, they grew through their Social Brand and Social Recognition that people continued to share their experiences via Social Selling allowing these organisations to grow and grow due to more people becoming clients/customers.
However, these organisations have either gotten greedy, had employees who mismanaged the funds, had Governments advise that they should take over other institutions to help them out (thus inheriting bad debt and loans), over lent to people/companies who couldn’t repay the debt, etc, etc which all led to/helped to create a financial meltdown and now leaves us where we are today. But are we in a good position?
Many people are looking to make fast money or get quick returns to fund their future. With more money than ever that is being thrown into technology to help us improve our lives by making things easier – here we are again, seeing companies coming up with ideas that are just re-inventing old ideas/formats. The majority of these technology companies are effectively going to the finance sector once more for ideas and then using the funds to take the finance sector to the next level….
Whether it is mobile payments to make purchases or transfer money between family and friends – all this only is what the banking sector has had for years but kept within its own eco-system.
Banks have offered on-line banking where you can check you balance, move money and make payments plus before this, they had cards that allowed you to make purchases without having to carry/use cash – so what is technology offering? All they have done, is just taken all this that the banking sector has been offering and moved it to your mobile device!
So with Finance being embraced by Technology to create the world of FinTech – FinTech is going back to Finance to embrace and use their Social ethos to start looking at embracing Social Relationships.
Moving forward the business world is going to see 2016 being the year where they have to start embracing Social Relationships and taking them to the next level if they want to succeed.
The ethos of Social Relationship is key and if you aren’t already embracing Social Branding, Social Community, Social Messaging and Live Streaming – then as a company you’ll not even be in the starting blocks come 2017!
Technology is helping us to start embracing Social so we can make decisions on what we do based on family and friends decisions and experiences and if we want something, then taken this advice, we make that decision/purchase there and then via our mobile device. So before you knock the finance sector again, just remember, if it wasn’t for them, you wouldn’t be where you are now and with FinTech embracing what they have innovated, remember will be a major part of your next job/career……
And it’s all down to……
Social Relationships…….
If you are wanting to understand more about FinTech, Social Relationships and how it all combines with what The Social Family offers, then feel free to contact myself via the form below:-
