Geoff Webb, VP of Strategy at PROS
In many companies, the CMO (Chief Marketing Officer) often has the biggest IT budget. That might surprise you, but the reason is relatively straight-forward: in recent years there has been an immense investment in MarTech, and it’s made the discipline of marketing incredibly tech-heavy. So much so in fact, that marketing departments now spend more time working with dashboards, and AI-fueled analytics than almost any other part of the business.
In fact, this trend is accelerating. Gartner research into CMO budget spend in 2018 revealed that as many as 57 percent of CEOs are prepared to invest more in marketing.
While this huge focus on technology has armed CMOs with an incredible level of insight (including where your mouse goes on brands’ site, what kinds of content you read online, and so on), it has also resulted in a rather one-sided technology investment, especially for B2B financial services firms who are eager to demonstrate to their customers that they understand and care about them as individuals.
We think it’s time for perception surrounding ownership of the technology budget to adjust. While marketing departments may be happily sailing on an ocean of usable data, their colleagues in the sales department may be struggling to respond to an explosive change in buyer behaviour and expectations.
The reality is that today’s CROs (Chief Revenue Officers) are facing extraordinary pressure to transform their departments – especially in the face of a growing shift towards digital commerce models. Once upon a time, a sales executive could rely on experience, insight, and interpersonal skills to close a deal and keep the customer buying – but today, that’s a much more difficult task.
Growing sales by empowering sales
An increasing number of buyers are now moving away from the traditional model of calling up their sales rep and asking for a quote. Instead, they’re seeking the convenience of being able to buy online, without needing to pick up the phone, send an email, or – heaven forbid – meet in person. Simply put, for the day-to-day business of buying, purchasers want the speed and convenience of e-commerce. Yet studies also show that buyers want to know there will be a well-informed sales executive available at the end of the phone, should they need one.
Managing this shift from meeting in person to being mostly offline/sometimes in person isn’t easy, and requires sales professionals to be fully informed about their customers, have visibility into transactions as they’re occurring (should the customer need help) and be ready to provide insight and guidance.
The solution to supporting this change for the sales team lies – just as it did for the marketing team – in the deployment of technology. In the same way that MarTech has transformed marketing teams, sales departments need to adopt highly specialised technology that can help them to be more personalised, faster, more efficient, and ultimately capitalise on the increased number of leads.
When we look at where much of the investment in sales automation technology is currently, we see it at the operational level. As is stands, sales professionals can spend as little as 36 percent of their time actually selling, meaning they are dwindling away precious time and productivity on administrative tasks. However, there is a deeper need to be met for sales leadership, a more fundamental question as we shift towards more complex, multi-channel digital selling – how do I make my sales people not only more productive, but more informed?
Getting to know you
We’re now seeing the emergence of several next-generation sales technologies that are able to go beyond operational efficiency and provide the same degree of analytic-based insight to CROs that marketing technology provides to CMOs.
Top of the list are technologies that can enable more intelligent quoting for complex products (where configuration can be time-consuming and prone to expensive errors). Some good examples of this are products like heavy equipment or high-tech medical devices.
Arming sales executives with the tools they need in order to support these kinds of purchases can slash the time needed to respond correctly to a request. Studies show that delivering highly personalised responses to buyers not only increases win rates, but also increases the value of the sale. Customers are much more likely to pay more for something if they know that the product being offered is personalised to them and designed with their specific needs in mind. This includes the product itself, how it’s packaged, how it’s delivered and how it’s priced.
Aligning for the good of the business
Yet, all these changes are indicative of a more profound movement that looms on the horizon for financial services firms.
Aligning marketing and sales has long been a challenge that has vexed the c-suite. At its core, misalignments often arise from a lack of common understanding regarding the nature of their customers and the market needs. And these misalignments are expensive and disruptive, wasting time, effort, and opening cracks in customer satisfaction that agile competitors can exploit to steal market share.
But what if sales and marketing had a common, clear, and consistent understanding of their customers and their needs? What if, instead of arguing about messaging and focus, sales and marketing teams were completely aligned?
One of the keys to achieving this will be sharing the same big data lake and analytic/AI engine to give rise to a unified and common sense of the who, where, what, and how of customer engagement. This changes everything – because now the entire business becomes a single, focused unified force to deliver precisely what the customer needs, every day, with every interaction.
It might seem ironic that technologies such as big data, cloud platforms and AI will serve to transform the most ‘human’ aspects of financial services sales and marketing, yet this is exactly what’s starting to happen. What’s more, freed of disruptive disagreements about what customers want, businesses can finally start to align all their energy into delivering a customer experience that sets them apart.
The CMO is key in delivering customer experience, and while they may hold the majority of the tech budget today, we can expect to see them share that budget round the company in the coming months and years. Spreading the tech budget and switching to a hybrid sales model might bring cultural and organisations implications, but the financial rewards in doing so are there for all to see.
IS PRIVATE PLACEMENT LIFE INSURANCE THE PERFECT PRODUCT FOR GLOBAL HNW FAMILIES
By Louis Zuckerbraun, Managing Director, GMG Insurance
Everyone wants to know that their family will be okay after they die and will do whatever they can to ensure that. That’s as true for high net-worth individuals (HNWIs) as it is for anyone else. But in an age where families are spread across the globe, leaving the kind of legacy you want can be incredibly complicated.
One product that could make things a great deal more simple is Private Placement Life Insurance (PPLI).
Originally conceived in the US, PPLI is rapidly gaining traction across Europe. Not only is it more efficient than traditional forms of life insurance, allowing the investments within the policy to hold many more types of assets and asset classes, it can also be a useful way to overcome specific issues such as management and control, beneficial ownership and substance.
While PPLI is gaining popularity across the globe, it’s still a relatively unknown product set, even among the HNWIs it would most benefit. It’s therefore worth looking at exactly what PPLI is.
Effectively an investment wrapped inside an insurance policy, a PPLI policy’s cash value depends on the performance of the investments within it. These investments can include hedge funds, mutual funds, and other potentially lucrative assets. Ultimately, it’s down to the policyholder to choose what kinds of investment they’d most like to have, meaning that they have a lot more freedom than they would with an ordinary life insurance policy.
Depending on the jurisdiction, a PPLI policy can also provide significant tax savings. In the US, for instance, the Internal Revenue Code treats insurance differently than it does investments. So, by packing an otherwise taxable investment in a tax- free policy, investors can reap big rewards on the investment, as well as the death benefit, tax-free.
But PPLI policies aren’t just beneficial from a tax perspective, they’re also useful for anyone with a global family.
A PPLI policy is generally by nature a globally focused vehicle. So, for instance, approved banking partners and advisors in Switzerland can work with US persons, to provide an investment vehicle that has a global focus.
The policy would purchase global funds and be managed by a global advisor who is outside the US but understands the US market. This makes it perfect for anyone who wants to diversify from traditional United States Dollar denominated investments but wants to maintain tax compliance and work with international advisors.
This solution works very well with a global family who may have, as an example, a child studying in London, or with international businesses, and who wish to build exposure globally in a tax efficient and US compliant manner. An international PPLI policy would be very beneficial to the family.
Further, the policy can be denominated in Swiss Francs, US Dollars or Euros depending on the needs and strategies of the policy owners or beneficiaries and still pay tax efficiently to the US persons.
These features also mean that a PPLI policy can be a useful replacement for, or supplement to, a family trust, especially if a tax authority is unlikely to accept the trustees as the legal owner of the assets held in the trust.
A clear choice
With more and more families living in different geographies, a PPLI policy is therefore an option that should be playing a much bigger role in the mainstream. It provides an accepted and compliant solution to the planning challenges faced by ultra-high net worth and high net worth families.
While life insurance, in general, provides a mechanism for estate tax planning, asset protection and investment flexibility that cannot be beaten by any other compliant tool, PPLI provides the flexibility and protection that informed high net worth families increasingly require.
If you’re looking a purchasing a PPLI policy, however, it must be managed by professional insurance and legal advisors who understand the product.
FINTECH IN AFRICA: WHY THIS MUSTN’T BE A DECADE OF WASTED POTENTIAL
Albert Maasland, Chief Executive Officer at Crown Agents Bank
The current COVID-19 pandemic is an unprecedented crisis of our times. As with many global disasters, emerging and frontier markets are likely to feel a devastating impact. The Institute of International Finance has already reported the largest capital outflow from emerging markets ever recorded. The extent of the effect is being debated, but efforts to reduce the impact must become an absolute priority.
One of the most important things we can do in the long term is remember how far these regions have come in the last few years and remind international players of their enormous potential. In 2019, technology startups that operate on the continent received a total of $1.3 billion in funding. Investors and financial services players alike have observed the considerable growth and adoption of fintech in Africa. Fintech is one sector that could show resilience during this crisis, as online services become essential and the use of cash is discouraged worldwide. Africa has seen its fintech industry develop and thrive of late and this must not be overlooked as we look to the future.
The fintech ‘hub’bub
According to the GSMA, Sub-Saharan Africa is still the “enduring epicenter of mobile money”. The region accounted for over 60% of the $690 billion that was transacted via mobile money in 2019 and has more than 150 million more registered accounts than the next highest region, South Asia.
The market conditions that make Sub-Saharan Africa so ripe for the adoption of mobile money range from the population being predominantly young and tech-savvy to an established history of not having sufficient financial infrastructure. Mobile wallets have brought better security and the ability to make international payments to the unbanked. Investors noticed.
Fintech became Africa’s best funded startup sector in 2019 as venture capital aimed to support and capitalise on the huge potential for growth. Visa, Worldpay and Mastercard are among those global financial players who have entered into collaborations with African fintech ventures, such as B2B payments company Flutterwave.
While Kenya saw the birth of M-Pesa, more countries are embracing fintech and becoming hubs on the continent. Nigeria saw the highest number of startup deals last year and startup investment grew nearly five fold compared to 2018.
E-commerce, financial products for SMEs and payments technology are among the areas receiving funding. As entrepreneurialism receives more support and international attention in Africa, the gaps in financial systems are being plugged.
Changing the definition
With all these developments and emerging services, traditional measurements of financial inclusion have needed to adapt. Financial inclusion metrics have previously been based on the number of adults with a bank account at a financial institution. According to the Global Findex from the World Bank, the share of adults with an account at a financial institution rose by 4 percentage points from 2014-2017, while those with a mobile money account nearly doubled—to 21%.
Mobile money accounts or mobile wallets are now a fundamental part of financial services in Africa. For investors and entrepreneurs, that translates to more information about the market, behavioural data about consumers and e-commerce possibilities. In essence, it amounts to opportunity.
These benefits also become apparent in international aid and charity work. It’s easier than ever for international development organisations to get funds directly to their aid workers and to individuals who need them safely. Remittances last year, which reached $550 billion, were three times that of official global aid volumes. 80% of these transactions were made to emerging markets, and the minutes and pennies saved in each transaction through the efficiency of mobile payments are invaluable to those most in need of these funds.
As financial inclusion makes great strides and financial technology has transformed the African startup landscape, we must not lose this progress. We must continue to value the benefits in bringing those excluded into the financial ecosystem and the unique opportunities presented in areas like Sub-Saharan Africa.
We’ve seen what real innovation looks like in the tangible changes fintech has had in Africa: doing things differently and creatively to improve the status quo. Investors should continue to watch and support these markets, and the financial services industry more widely should take heed of the lessons learned in the markets we too often believe to be behind us.
In the coming months, the importance of digital services and fintech in particular will become more palpable. Nigeria’s tech scene is already beginning to contribute to efforts to combat the COVID-19 pandemic. Africa was poised for an impressive decade and we must do what we can to remember and realise the potential of the world’s youngest population.
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