Transcript from my presentation:
The great American philosopher and management consultant George Costanza once commented on the financial services industry by saying that for everything important in life, we need to have a physical package. For your cash, there's your wallet. But is this true today? Of course not. We're living in a world where we are entering the world of cashless futures unless you're in the Mafia or you are in the drug sales business, because those things don't leave digital foot trails, right?
Money is already virtualized, and this changes the game for banks. In Sweden, for example, the sales people for the equivalent in Stockholm of the Augustin Vienna newspaper for the homeless experienced the 59% increase in a month after they were given mobile payment systems by Swedish iZettle.
It wasn't the fact that Swedes were antisocial bastards and didn't want to give any coins. It was just that people weren't using coins. They were happy to support the cause, but the payment had to be somewhat seamless. And of course, it's not just Generation Y or Millennials, in Sweden, 50% of Swedish pensioners use cash cards everywhere according to the Swedish Pensioners Organization. It's a really cool organization. You should all join.
Here is a quote by Jamie Dimon from JPMorgan Chase who says that Silicon Valley is coming. Today, if we need a loan here in Australia or in Germany, we can go to Lendico. If we need to transfer some cash overseas, don't go to your bank. Go to TransferWise. Now this might seem weird for us because we're demographically bias, but is this truly news to the next generation? Of course not.
And our hesitance to embrace that future sometimes comes down to us focusing too much on regulation as opposed to innovation, the space where Fintech gets to hang out. But the truth of the matter is that even though we're hesitant about the digital consumer, because we might think of them as digitally promiscuous, the research from Bain shows that the more we digitally connect with our banks, the more loyal we become. In fact, if our digital usage goes up, we hold more products on average than the person who is not digitally engaged, and our net promoter score also rises in the research by Bain of high net worth individuals in the United States.
Now this flies in the face of traditional wisdom, or at least traditional wisdom that embraces nostalgia and goes against innovation. The customer funnel that we used to design and people had to comply by it has changed from a linear funnel to something that looks a little bit more like a chaotic, seemingly like a slinky spiral. Remember those really cool toys back in the day that used to walk down the stairs? It's chaos, right? I would like to see a future where it's not just cyber criminals who are interested in your customer data, but banks really start mining your customer data, perhaps like the likes of Netflix.
Any users of Netflix here in the audience? Fantastic. Who uses a VPN or an illegal way of getting there? This is a safe sharing, loving environment. Fantastic. At least one person. Good. These are the true innovators and the early adopters of relevant technology, so to speak. I don't endorse it by the way.
But let us just think about how close Netflix gets to us as consumers. When they shifted from something physical to something digital, unlike other business models, that was not a shift that evaporated value or vaporized value. But for them, it created value because they really got to know your customer, right? They used to send us DVDs. Now they know exactly how much you binge watch Game of Thrones on a Saturday morning when you're hung over. They know that you fall asleep halfway through the third episode drooling on your keyboard, or is that just me? So when they start looking at all the data, consumer behavior data, they are able to start tweaking their products accordingly.
And if you guys are not interested in this kind of information, we know some people who are, because these guys are mining your data, stealing your information, hacking into your operational systems, and are very, very curious about the contact details and the consumer behavior of your consumers and clients. These guys get it, and yes, they're not bound by regulation. They can clearly innovate in very illegal ways, but they know that you sit on a treasure trove, a treasure trove that sometimes sits too deep in silos that we're afraid to use.