What you sell today isn’t likely what you’ll be selling in 10 years – Jim Carroll

Home > Archives

Financial

"Every financial services organization must deal with high velocity change -- whether it's the impact of mobile technology, social networks, rapid business model change, the emergence of new global competitors, or heightened customer expectations. Jim Carroll has been helping some of the largest financial organizations in the world understand the tsunami of change that is FinTech.

Jim has been the keynote speaker for dozens of conferences, corporate events and association annual meetings in the financial sector, including the VISA Global Prepaid Summit • National Australia Bank • Discover Financial Services • Highland Capital Brokerage • Certified Professional Chartered Underwriter Association • LIMRA International • Diners Club Worldwide Forum • Assurant Insurance • Texas Credit Union League • First Interstate Banc System • Illinois League of Financial Institutions • SunGuard Financial • Ohio Bankers League • American Express • Bank of Montreal • Barlow Research Associates • Chubb Commercial • CapitolOne • Lincoln Financial • American Community Bankers Association • International Financial Executives Conference • US Farm Credit Cooperative • Fidelity Bank (Cayman) Ltd. • DataCard • AICPA • Credit Union Management Association • Electronic Transaction Association • Insurance Institute of Canada • IREV (Swedish Accounting Association) • Investment Funds Institute of Canada • KPMG • Deloitte • E*Trade • Financial Management Institute • Great West Life • Price Waterhouse • RBC Financial Group • Society of Management Accountants • US Committee on State Taxation • CIBC World Markets • BMO Financial Group • Credit Union Directors Association • Financial Management Institute • GBC Asset Management • TDBank .

Recent Posts in the Financial category


I spent the morning yesterday with the Board of Directors of a multi-billion dollar credit union, taking a good hard look at the trends sweeping the financial services space. They know that disruption is real, and that it is happening now.

And disruption is everywhere: every business, and every industry is  being redefined at blinding speed by technology, globalization, the rapid emergence of new competitors, new forms of collaborative global R&D, and countless other challenges.


The speed with which these changes occur are now being increasingly driven by he arrival of a younger, more entrepreneurial generation; a group that seems determined to change the world to reflect their ideas and concept of opportunity. They’ve grown up networked, wired, and are collaborative in ways that no previous generation seems to be.

And therein lies the challenge.

Most organizations are bound up in traditions, process, certain defined ways of doing things — rules — that have helped them succeed in the past. Over time, they have developed a corporate culture which might have worked at the slower paced world of the past — but now has them on the sick-bed, suffering from an organizational sclerosis that clogs up their ability to try to do anything new.

Those very things which worked for them in the past might be the anchors that could now hold them back as the future rushes at them with ever increasing speed.

They are being challenged in a fundamental way by those who think big, and by some really big, transformative trends.

How to cope with accelerating change?  Think big, start small and scale fast!

I’m doing many keynotes in which I outline the major trends and opportunities that come from “thinking big, starting small, and scaling fast,” by addressing some of the fundamental changes that are underway.

1. Entire industries are going “upside down”

One thing you need to know is this: entire industries are being flipped on their back by some pretty big trends.

Consider the world of health care. Essentially, today, it’s a system in which we fix people after they become sick. You come down with some type of medical condition; your doctor does a diagnosis, and a form of treatment is put in place. That’s overly simplifying things, but essentially that is how it works.

Yet that is going to change in a pretty fundamental way with genomic, or DNA based medicine. It takes us into a world in which we can more easily understand what health conditions are you susceptible or at risk for throughout your life. It moves us from a world in which we fix you after you are sick — to one in which we know what you are likely to become sick with, and come up with a course of action before things go wrong. That’s a pretty BIG and pretty fundamental change. I like to say that the system is going “upside down.”

So it is with the automotive and transport industry. One day, most people drove their own cars. One day in the future, cars will do much of the driving on their own. That’s a pretty change — sort of the reverse, or upside-down, from how it use to be.

Or think about education: at one time, most people went to the place where education is delivered. But with the massive explosion of connectivity and new education delivery methods involving technology, an increasing number of people are in a situation where education is delivered to them. That’s upside down too!

You can go through any industry and see similar signs. That’s a lot of opportunity for big change.

2. Moore’s law – everywhere!

Another big trend that is driving a lot of change comes about as technology takes over the rate of change in the industry.

Going forward, every single industry, from health care to agriculture to insurance and banking, will find out that change will start to come at the speed of Moore’s law — a speed of change that is MUCH faster than they are used too. (Remember, Moore’s law explains that roughly, the processing power of a computer chip doubles every 18 months while its cost cuts in half. It provides for the pretty extreme exponential growth curve we see with a lot of consumer and computer technology today.)

Back to health care. We know that genomic medicine is moving us from a world in which we fix people after they are sick – to one where we know what they will likely become sick with as a result of DNA testing. But now kick in the impact of Moore’s law, as Silicon Valley takes over the pace of development of the genomic sequencing machines. It took $3 billion to sequence the first genome, which by 2009 had dropped to $100,000. It’s said that by mid-summer, the cost had dropped to under $10,000, and by the end of the year, $1,000. In just a few years, you’ll be able to go to a local Source by Circuit City and buy a little $5 genomic sequencer – and one day, such a device will cost just a few pennies.

The collapsing cost and increasing sophistication of these machines portends a revolution in the world of health care. Similar trends are occurring elsewhere – in every single industry, we know one thing: that Moore’s law rules!

3. Loss of the control of the pace of innovation

What happens when Moore’s law appears in every industry? Accelerating change, and massive business model disruption as staid, slow moving organizations struggle to keep up with faster paced technology upstarts.

Consider the world of car insurance — we are witnessing a flood of GPS based driver monitoring technologies that measure your speed, acceleration and whether you are stopping at all the stop signs. Show good driving behaviour, and you’ll get a rebate on your insurance. It’s happening in banking, with the the imminent emergence of the digital wallet and the trend in which your cell phone becomes a credit card.

In both cases, large, stodgy, slow insurance companies and banks that move like molasses will have to struggle to fine tune their ability to innovate and keep up : they’re not used to working at the same fast pace as technology companies.

Not only that, while they work to get their innovation agenda on track, they’ll realize with horror that its really hard to compete with companies like Google, PayPal, Facebook, and Apple — all of whom compete at the speed of light.

It should make for lots of fun!

4.  “Follow the leader” business methodologies

We’re also witnessing the more rapid emergence of new ways of doing business, and it’s leading us to a time in which companies have to instantly be able to copy any move by their competition – or risk falling behind.

For example, think about what is going on in retail, with one major trend defining the future: the Apple checkout process. Given what they’ve done, it seems to be all of a sudden, cash registers seemed to become obsolete. And if you take a look around, you’ll notice a trend in which a lot of other retailers are scrambling to duplicate the process, trying to link themselves to the cool Apple cachet.

That’s the new reality in the world of business — pacesetters today can swiftly and suddenly change the pace and structure of an industry, and other competitors have to scramble to keep up.  Consider this scenario: Amazon announces a same day delivery in some major centres. Google and Walmart almost immediately jump on board. And in just a short time, retailers in every major city are going to have be able to play the same game!

Fast format change, instant business model implementation, rapid fire strategic moves. That’s the new reality for business, and it’s the innovators who will adapt.

5. All interaction — all the time!

If there is one other major trend that is defining the world of retail and shopping, take a look at all the big television screens scattered all over the store! We’re entering the era of constant video bombardment in the retail space. How fast is the trend towards constant interaction evolving? Consider the comments by

Ron Boire, the new Chief Marketing Officer for Sears in the US (and former chief executive of Brookstone Inc.): “My focus will really be on creating more and better theatre in the stores.”

We are going to see a linking of this ‘in-store theatre’ with our mobile devices and our social networking relationships. Our Facebook app for a store brand (or the fact we’ve ‘liked’ the brand) will know we’re in the store, causing a a customized commercial to run, offering us a personalized product promotion with a  hefty discount. This type of scenario will be here faster than you think!

6. Products reinvented

Smart entrepreneurs have long realized something that few others have clued into : the future of products is all about enhancement through intelligence and connectivity. Nail those two aspects, and you suddenly sell an old product at significantly higher new prices.

Consider the NEST Learning Thermostat. It’s design is uber-cutting edge, and was in fact dreamed up by one of the key designers of the iPad. It looks cool, it’s smart, connected, and there’s an App for that! Then there is a Phillips Hue Smart LED Lightbulb, a $69 light bulb that is uber-smart, connected, and can be controlled from your mobile device. Both are sold at the Apple store!

Or take a look at the Whitings Wi-Fi Body Scale. Splash a bit of design onto the concept of a home weigh scale, build it with connectivity, link it to some cool online graphs and you’ve got a device that will take your daily weight, BMI and body-fat-mass tracking into a real motivational tool.  Where is it sold? Why, at the Apple store too!

Do you notice a trend here?

7. Careers reinvented

For those who that the post-2008 North American recovery from the recession was slow, here’s an open secret: there was a significant economic recovery underway for quite some time, as companies in every sector ranging from manufacturing to agriculture worked hard to reinvent themselves. It just didn’t involve a lot of new jobs, because the knowledge required to do a new job in today’s economy is pretty complex. We’ve moved quickly from the economy of menial, brute force jobs to new careers that require a lot of high level skill. The trend has been underway for a long, long time.

Consider the North American manufacturing sector, a true renaissance industry if there ever was one! Smart engineers at a wide variety of manufacturing organizations have transformed process to such a degree, and involved the use of such sophisticated robotic technology, that the economic recovery in this sector involves workers who have to master a lot of new knowledge. One client observed of their manufacturing staff: “The education level of our workforce has increased so much….The machinists in this industry do trigonometry in their heads.”

Similar skills transitions are underway in a wide variety of other industries….

8. The Rise of the Small over Incumbents

We are living in the era that involves the end of incumbency. Companies aren’t assured that they will own the marketplace and industry they operate within because of past success ; they’ll have to continually re-prove themselves through innovation.

Consider Square, the small little device that lets your iPhone become a credit card. What a fascinating little concept that has such big potential for disruption. And it’s a case where once again, small little upstarts are causing turmoil, disruption and competitive challenge in larger industries — and often times, the incumbents are too slow to react.

Anyone who has ever tried to get a Merchant Account from Visa, MasterCard or American Express in order to accept credit cards knows that it is likely trying to pull teeth from a pen – many folks just give up in exasperation. Square, on the other hand, will send you this little device for free (or you can pick one up at the Apple Store.) Link it to your bank account, and you’re in business.

So while credit card companies have been trying to figure out the complexities of the future of their industry, a small little company comes along and just does something magical! No complexities, no challenges, no problems.

* * * *
There are people who are making big bold bets, big bold decisions, who are going to change the world and who are going to do things differently.” That phrase was from my opening keynote for the Accenture International Utilities and Energy Conference in San Francisco some years back.

It’s a good sentiment, and is a good way to think about the idea of ‘thinking big.’

Credit Union Magazine just ran a great article on my keynote yesterday in Las Vegas for Drive 17, the annual conference from CU Direct on trends in the automotive lending space for credit unions.

Self-driving cars, drone technology, Apple Watch, and even FaceTime.

It’s technology we see depicted in “The Jetsons,” a cartoon from 1962 that depicted the life of a futuristic family. But we’re already seeing much of the technology today, more than 40 years before the cartoon takes place in 2062.

It’s staggering to think how quickly the world around us is changing,” says innovator and futurist Jim Carroll, who addressed CU Direct’s Drive 17 Conference Wednesday in Las Vegas.

The technology in The Jetsons is just another reminder that credit unions need to innovate and not only develop new products, but also transform to keep up with the speed of change, Carroll says.

Given the fast pace of change, more than 80% of conference attendees believe their current business model will not stay the same in the next 10 years due to the significant disruption.

We need to deal with the innovation killers which hold us back from pursuing the opportunities of the future. The future is coming at us with a greater intensity and great speed,” Carroll says. “We need to think big, start small, and scale fast.

Carroll offers credit unions five strategies for successful innovation:

1. Think big

Innovators need to make big, bold decisions to be transformative. This is the only way credit unions will be able to counter the impacts that disrupters, such as fintech companies, have, Carroll says.

Think of Tesla, Carroll says, which has transformed the auto industry by manufacturing vehicles on demand and have placed their dealerships in retail shopping areas rather than in stand-alone structures. Some 400,000 people have signed up for these vehicles, he adds.

2. Presume that everything will speed up

Credit unions are not the only industry struggling with the speed of technology.

Technology is rapidly changing in vehicles, says Carroll, who believes Siri or Alexa buttons, augmented reality screens, vehicle-to-vehicle communication, and payment technology embedded in the dashboard may be features in vehicles by 2020.

For credit unions, think about how biometric scans can be used at ATMs.

3. Align to Moore’s Law of innovation

This law says the processing power of a computer chip doubles every 18 months. Technology is constantly changing and is becoming embedded in more items, such as garage doors, ceiling fans, and even grills, Carroll says.

Hyperconnectivity is becoming the rule.

Credit unions need to be aware of the expectations members have for personalization, their use of technology, and a desire for real-time support or interaction when needed.

You need to be prepared to innovate quickly,” he says.

4. Align changing business models and consumer behavior

Mobile devices have a huge influence on people’s purchasing and financing decisions. Research shows the average consumer scans 12 feet of shelf space in a second, and 80% would leave a store if they must wait more than five minutes to pay.

Determine ways to grab your members’ attention and provide solutions faster, in addition to providing a way for members to interact online, Carroll says.

5. Realign to the impact of generations

Recognize how younger generations live their lives. Don’t cling to a routine or process just because that’s the way your credit union has always operated.

Millennials, for example, have been weaned on technology, speed, and innovation, and are open to transformations and changes that take this into account, Carroll says.

 

Tomorrow morning, I’ll keynote Drive 17 — it’s a conference for credit union executives around the topic of the future of lending. Particularly, automative lending. This is similar to a keynote I did in January of this year for the American Financial Services Association — same topic and issues, except for banking executives.

It’s a challenging time to be in this space, as we witness seismic changes in both the very nature of automotive ownership and the manner by which lending decisions are made. Particularly with the next generation, who are very different from their forebears:

  • they don’t have a job for life – they freelance
  • their banking is mobile – they don’t use cash
  • they don’t think long term – 25 year mortgages are a foreign concept
  • they don’t stay at hotels – they use AirbNb
  • they don’t use taxis – they Uber
  • and 1 in 10 works in the sharing economy…. and so they don;’t have the typical risk profile of an employee

The biggest challenge? They might not even buy cars, but rather will take advantage of all the opportunities that the sharing economy presents. Of course, if you are in the business of lending money for the purchase of automobiles, this can be a problem, and requires some innovative thinking.

If they do, however, buy a vehicle, the manner by which they will seek financing will be very, very different. It will be done through their mobile device; they’ll expect instant options, and instant approval. We’re talking 30 seconds here. If you can’t meet their expectations in terms of the time for the transaction, they’re gone. Which means you need to challenge yourself in terms of interface, risk assessment and more.

In my keynote tomorrow, I’ll cover these trends and more. The reality? Every credit union and financial institution today needs to comprehend the speed with which transformative change is occurring, and how they must focus on innovation as a means of turning those challenges into opportunity.

 

I was interviewed recently by Independent Banker magazine for my thoughts on trends impacting the world of banking. I do a lot of keynotes in this area — with clients such as VISA, the National Australia Bank, the Texas Credit Union League, American Express, CapitolOne, the American Community Bankers Association, Wells Fargo and many, many more.

bankingwithoutboundaries_770-1

To Carroll, anyone is capable of innovating an aspect of the community banking industry. However, he believes to do so, three essential questions must be asked. What can I do to run the business better? Grow the business? And most important, transform the business?

The full article is available at their Web site: 

 


Instill an innovative mindset to push your bank into the future
By Sam Schaust

Innovation is not a word solely owned by today’s tech giants in Silicon Valley. Or so thinks Jim Carroll, a futurist from Toronto who has given dozens of keynote speeches on the power of innovation to companies such as Walt Disney, Wells Fargo and NASA.

A lot of eyes gloss over the word ‘innovation,’ and people think the word only applies to someone like Steve Jobs who designed cool stuff that changed the world,” Carroll says. “They might think, ‘I’m a banker. What can I do?’”

To Carroll, anyone is capable of innovating an aspect of the community banking industry. However, he believes to do so, three essential questions must be asked , the first of which is: What can be done to run the business better?

There are plenty of opportunities to implement more information technology to reduce costs, streamline processes and become more efficient,” he says.

Which begs the second question: What can be done to grow the business?

Concepts regarding “how to use mobile to capture the millennial generation” and “how to utilize leading-edge transaction technology or new products to attract untapped customers,” Carroll notes, are typical subsections of this question. “Essentially, it all comes down to how you think differently to attract new sources of revenue,” he says.

Finally comes the question: What can be done to transform the business? “Transformation of the business is all about preparing for the fact that, for example, with credit-card payments, now Apple and PayPal are competitors,” Carroll says. “With an increasing number of organizations getting into the banking space, you may need to change the essence of what you do and how you do it to keep up with reality.”

Staying current with today’s banking industry—along with innovating for the future—could require an internal shake-up. As Carroll suggests, “By hiring somebody who thinks just like you, you aren’t going to get any creative, innovative ideas. Instead, if you hire somebody you don’t like or who is dramatically different from you, then you’ll get those different opinions.

Groundbreaking ideas often can come from outside of your field of business, Carroll believes, adding that adopting “an outsider mentality” could prove to be a valuable asset.

“With an increasing number of organizations getting into the banking space, you may need to change the essence of what you do and how you do it to keep up with reality.”
—Jim Carroll, Futurist

Thinking opportunistically

To bring about a new revenue opportunity, Carroll sees an advantage in embracing methods that break from the traditional structure. “Part of what I talk about is speed of opportunity,” he says. “What’s happening out there is new opportunities are emerging faster and you’ve got to have a culture and capability to grab onto that very quickly.”

Growing through experience

Carroll believes that an innovative attitude at a community bank needs to be set from the top. “It’s got to start at the board,” he says. “Although, that’s the toughest thing and it simply doesn’t come overnight.”

By adopting a forward-thinking mindset, mistakes are sure to be made, Carroll adds. “Be an organization that doesn’t just celebrate wins, but failures, too,” he says. “In today’s world, organizations will get ahead through the depth of their financial capital. That’s important, but there’s also our experiential capital—the experience we gain from trying something new.

By hiring somebody who thinks just like you, you aren’t going to get any creative, innovative ideas.” — Jim Carroll, Futurist

Innovation typically comes from a general interest for what’s occurring beyond one’s industry, Carroll notes. By simply embracing the what’s new or unusual, “we build up our experience,” he says. “And the more experiential capital we have, the better positioned we are to make big, bold leaps in the future.

 

One thing I always stress to potential clients is that they are getting much more than just a keynote or presentation for a leadership group — they are getting highly customized insight based on significant original research.

That fact has led to the client list that I have — which includes Disney, two (!) talks for NASA, the PGA of America and more….

I must admit, it’s always a thrill to read the tweets that are sent while you are on stage — realizing that you have really changed lives and changed perspectives!

edutech

You know you are doing something right when you research gets carried further into the industry:

insuretech

To that end, here’s an overview of some of the talks I’ve done this fall:

  • Disruption and Change in the Insurance Industry: a keynote for GAMA International, a global organization for leaders in the global insurance/financial services industry. There’s a tremendous amount of change happening, and much more yet to come. What did I cover in my keynote? You can read about it in my post, Insurance and Innovation: The Challenge of Change . This is one of many talks I’ve done in the insurance industry over the years; I’ve done talks for most major property and life insurance companies at one time or another, and have shared the stage with CEO’s of many of the organizations in the industry.
  • The Future of Insurance Risk: continuing on the insurance theme, an opening keynote for the client conference of FMGlobal, a leading underwriter of insurance risk in the commercial real estate space. My talk took a look at a broad range of trends that will impact the future structure of buildings, architecture, manufacturing facilities and more. Over the years, I’ve done many talks that have looked at the trends impacting the world of commercial real estate.
  • The Future of Medical Device Technology & Healthcare: a talk for an innovation recognition dinner, and then a talk for key R&D staff, for Philips Respironics, a division of Philips Medical Devices, on how the industry will be transformed through hyper-connectivity, changing consumer behaviour, the acceleration of science and much more.
  • The Future of Education. I was the opening keynote speaker for the EdNet 2016 conference in Dallas, with several hundred senior executives from the “education knowledge industry” (aka textbooks) in the room. Read at overview of my talk, Forge Ahead and Move Fast, in an article from an industry publication.
  • Wealth Management and Industry Change: a private event for CEO’s of 40 companies, each with $1 billion+ in revenue, for a private equity company. It’s one of many talks that I do to help senior executives think about the trends that might impact their lines of business and investments – read more in a blog post, Global Wealth Managers Turn to Jim Carroll for Insight on Trends .  It’s kind of cool to think that family wealth managers for such groups as the Wrigley family foundation, the Rothschild’s, the Bill & Melinda Gates family office, and the  Google and many, many others, have turned to me for insight over the years.
  • The Future of Manufacturing: keynotes for the Association of High Tech Distributors in Napa Valley; for Alignex in Minneapolis; and then a rip-roaring motivational keynote full of the latest manufacturing trends for the the Greater Philadelphia Manufacturing conference. The tweets coming out of these events have been astonishing — people in the manufacturing sector are looking for hope and inspiration, and I seem to be giving it to them in spades. Read more at my post, The Disruption and Reinvention of Manufacturing.
  • The Future of Seniors Care: two talks in Nashville for senior executives from the North American assisted living and seniors care industry. I was booked by the American Healthcare Organization and the Centre for Assisted Living, and took a look at the opportunities that come from innovative thinking in dealing with one of the most significant challenges of our time.
  • The Future of Construction, Architecture and Infrastructure: a keynote to open the annual conference of the American Concrete Institute. They admitted to me that they’ve never engaged a keynote speaker to open their event — they’ve been rather ‘stuck’ in their ways, if you pardon the pun. Will they do it again! You bet — my talk took a look at what happens when the world of concrete is influenced by fast trends — 3D printing is coming to concrete, and its coming fast!
  • The Future of Rail and Manufacturing: a talk for Amsted Rail, one of the leading manufacturers in the rail industry. This talk involved a lot of intensive preparation, with about 6 pre-planning conference call with the team bringing me in, as well as very specific, detailed research.

 

It’s been a fun week, with keynotes in Dallas and Napa Valley – one on the future of education, and the other involving the future of manufacturing.

Yet my talks don’t just include keynote presentations — I’m often engaged to come in to small, intimate leadership meetings to help senior executives understand some of the trends that will shape their world. This week, that included a presentation to a group of CEO’s at an off-site event in Colorado Springs. The event was organized by a private company that has equity interests in the organizations in the room — representing some $10 billion worth of value.

World of money

“At one event I spoke at, it was suggested to me that some $10 trillion of wealth was represented in the room”

My talk focused on the trends that will provide opportunity and challenge in the future — ranging from business model disruption, to the Internet of Things, the impact of the next generation, accelerating science and the new R&D, and many other topics.

In these situations, I don’t provide insight on particular stocks to invest in — but do provide guidance on the trends that will shape our world on a 5,10, 15, 25 year basis.

And it is clear that with an increasing number of these bookings, private equity managers have come to rely on my insight in a way that helps them to assess where they are going with their own investments and interests.

What’s interesting is that through the years, I’ve done quite a few of these presentations for very-high net worth families and firms. It has included such groups as the Wrigley family foundation and companies that manage the Rothschild wealth.

And in one of the most fascinating events I’ve participated in, I was invited to Athens to address several hundred representatives of what are known as  ‘family offices’ — organizations that manage the wealth of the world’s wealthiest. While I did not get a complete list of attendees, I do know that some of those in the room represent and manage the wealth of folks such as the Bill & Melinda Gates family office; the Accellor-Mittall families, those of the founders of Google and many, many others.

It was suggested to me that some $10 trillion of wealth was represented in the room.

What’s common to all of these talks?

Viewpoints on the trends that will define our world, and which will spell opportunity in the future!

 

Last week, I was the opening keynote speaker for a small insurance industry group — and had senior executives of quite a few major property & casualty and life insurance companies in the room.

As always, I undertook an extensive amount of detailed research on the latest status of innovation within the industry. In addition, I looked back on my research and interview notes for previous keynotes for CEOs and other executives for the largest insurance companies in the world.

(Last December, I was the opening keynote for the annual Insurance Executive Conference in New York City; in the room was the CEO for Transamerica Life, among others; this is typical of many talks I’ve done within the industry over the course of 20 years)

"Kicking off Executive Leadership Council meeting with our friends @GAMAIntl  & keynote @jimcarroll in Amelia Island"

@IntellectSEEC – “Kicking off Executive Leadership Council meeting with our friends @GAMAIntl & keynote @jimcarroll in Amelia Island”

Let’s face it: the trends are real. The industry will be disrupted by tech companies. Existing brokerage and distribution networks will be obliterated as more people buy insurance direct. Predictive analytics will shift the industry away from actuarial based historical assessment to real-time coverage. Policy niches, micro-insurance and just-in-time insurance will drive an increasing number of revenue models. The Internet of Things (iOt) and healthcare connectivity will provide for massive market and business model disruption. I could go on for hours!

To gauge the current thinking within the industry as to “how to deal with what comes next,” my session included some hands-on, live interactive text-message polling.

Right out of the bat, I asked the participants if they felt ready for the massive disruption now underway in the insurance sector.

And the fact is, they are not:

gama1

Having said that, they know that they are in the midst of some pretty significant change — the majority indicated that they believe that the insurance industry will not look anything in 10 years like it looks today.

gama2

The reaction in the room parallels that of a recent Accenture study that I referenced in my keynote:

  • CSO’s at global companies and 94% of CSO’s at insurance companies agree that tech will “rapidly change their industry in 5 years”
  • fewer than 1 in 5 CSOs in insurance believe their companies are prepared
  • fewer than 1 in 10 believe their companies are “high value achievers”

A similar observation was found in a recent PWC study on the insurance industry:

  • “Nine in 10 insurance executives polled by consultant PwC reckon at least part of their business is at risk over the next five years – a greater proportion than in any other area of finance”

Clearly, these executives know that something needs to be done to deal with the potential for business model disruption in the industry. Yet is the industry prepared to deal with it?

Not really:

  • “Fewer than 50 per cent of respondents in the life and general insurance sectors said they would increase IT spending to help them access new customers.” Fintech is booming – but where are 
the insurance tech startups? 
29 September 2015, City AM

Here’s the current problem: there is tremendous potential for complacency to seep into the industry, particularly as Google has pulled back from its’ Google Compare initiative. (This service let people use a Google tool to do comparison shopping for insurance policies from major carriers; the CEO of Google Compare also spoke at the New York event last December).

  • “Google’s initial failure shows technology firms won’t necessarily have “an easy road” to success in the new sector.” Beating Silicon Valley to the Punch; Digitizing Insurance, 11 March 2016

Is the complacency warranted? Not in my view — I think most tech companies, when disrupting an industry and suffer an initial setback, come back in a bigger and more significant way. It’s most likely that when Google, Amazon, Apple and other tech companies  come back in to disrupt insurance, they won’t be working with major carriers to do it!

  • “Expect that when the megatechs enter the insurance space, they will insist on taking control of a much bigger portion of the sales journey, positioning themselves as an alternative end-to-end solution provider, not just a lead generator.” Life Insurance Disruption, Asia Insurance Review, June 2016

Does the insurance industry have the innovation culture necessary to deal with the potential for what comes next? My next poll gave me a pretty stark response — the industry continues to be bound up in some pretty significant organizational sclerosis.

gama3

Is there a way out of this mess? Can the industry fix the clear strategic mismatch which exists?

In my keynote,  I suggested that disruption in such a significant issue that it really needs to be dealt with at the level of the Board; strategy needs to be kicked up a notch; clear responses and actions are warranted.

Quite clearly, specific responsibility needs to be put in place to implement a  disruption-strategy. Back to the Accenture report:

  • “Companies that have put in place chief digital officers and chief innovation officers and who report directly to the CEO tend to have a dedicated focus on technology-focused initiatives …. That’s a sign that they and C-level peers are taking technology-disruption seriously.”

Industry insight also clearly shows that insurance companies must “partner-up” to deal with the fact they simply don’t have the technology expertise to compete with Google, Amazon and others.

  • “an overarching theme …. not least among them insurers .. is that they cannot face technology driven innovation by themselves” – “How to disrupt the high-tech disruptors”
National Underwriter & Health
September 2016

Are many insurance companies following the path to partner up? Sadly, no:

  • “Only 28% of the respondents said they explored partnerships with fintech companies and less than 14% actively participated in ventures or incubator programmes.” Insurance Companies Slow in 
Bridging Fintch Gap, Mint, July 2016

I’ve been providing strategic level guidance to senior executives in the global insurance industry for over 20 years.

The issues, challenges and opportunities are stark. They’re real. They’re not going away.

Will most companies survive? Maybe not. Stay tuned!

Keynotes: A Note on Customization
September 15th, 2016

I’m about to head out the door to Amelia Island, Florida, where tomorrow morning I will do a talk for a small group of senior executives from the insurance industry — both property & casualty as well as life insurance companies.

I’m thinking its going to be a great talk — built around the theme, “10 Realities and Opportunities with Fintech Disruption.”

As with most talks, there’s been an extensive amount of research — conference calls with the client, not to forget 479 highly-specific articles on trends impacting the insurance industry.

fintech

What’s involved in building a great keynote? Detailed research, such as these articles on the future I’ve insurance that I’m reading through. If you want real insight on future trends and opportunities for innovation that are specific to your industry, give me a call.

On the flight down, I’ll fine tune my presentation, and wade through these articles once again.

I tweeted about this a week ago:

479 articles on the future of #fintech #insurance that I’m reading today – for my keynote in Florida next week for major insurance CEO’s/CxO’s. Some speakers offer pap. Others *customize*. ”Creating a great keynote” -> https://www.jacc.com/keynotes-workshops/creating-a-great-keynote/

This type of research helps me build a keynote that has detailed, industry specific information, such as these nuggets:

  • 2/3 of insurance CEOs see tech as both opportunity & threat” -from a PWC study. (Of course, it makes me wonder — are the rest asleep?
  • nearly 70% of insurance CEOs see the speed of technological change as a threat to growth and more than 60% are concerned about shifts in consumer spending and behaviour

This ties in with other specific, detailed research I’ve undertaken, not to forget the fact that in the last few years, my keynotes have involved audiences that have included the CEO’s of most major North American and global insurance companies.

My keynote includes observations from a  session I did in Philadelphia that included a private one-on-one with the CEO’s of the top 10 P&C companies in North America. 10 years ago, I had the CIO’s for the top 15 P&C/life companies in for a private meeting that went on for two hours.

People book me because they want real insight .

And that’s the reputation I’ve built in the industry — specific, detailed, information and statistic rich presentations that don’t offer motivational pap — but real concrete guidance on strategies, opportunities, challenges and innovation.

If you want real insight on future trends and opportunities for innovation that are specific to your industry, give me a call.

We can talk about the specific ways in which I can help.

 

Through the years, I’ve done a tremendous number of talks within the insurance industry, both the life and P&C (property and casualty) sides of the business.

For years, it’s been a pretty slow industry. That’s all about to change — in a big way! Indeed, we might soon see Google, or Amazon, or some other company with big technology, lots of data, and new methods of reaching potential customers that will forever disrupt and change the industry. Some folks have been talking to this potential for a few years, as seen in this article.

GoogleInsurance

I just did a talk for the CEO and senior executive team of one of the largest life insurance organizations in the U.S.

The main thrust of my talk was that the opportunity for big,  disruptive transformation in the life insurance industry is now accelerating, as three major trends come together.

  • bio-connectivity drives medical care, with opt-in for performance oriented life policies based on real time reduction of morbidity stats. People are using health and fitness monitors on their iPhones. If they can show good results from their health and wellness goals, an insurer would be far more likely to take a risk on them
  • we’re moving into a world of real time analytical community healthcare status updates that feed into actuarial tables; think about Apple’s recent initiative with it’s HealthKit (first to be used for medical research). It’s only a matter of time before real time healthcare dashboards are part of the health system in the Western world. I wrote about that before, in my post: “Trend: The Emergence of Real Time Analytical Predictive Healthcare Dashboards.”
  • every industry is being disrupted, as big, bold thinkers take over the agenda of an industry. Maybe in just a few years, we’ll see the Amazon Prime “No Hassles, Real Time, No Questions” Life Policy.

Some people in the life insurance industry see this trend, and see a threat.

The most amazing thing is that this is happening in the context of an industry that, if it is not dead yet, is certainly in the triage department:

MetLife’s premiums on policies sold to individuals last year totaled $409 million, a decline of 26% from $553 million in 2005. Industrywide sales of individual life-insurance policies are down 45% since the mid-1980s, according to industry-funded research firm Limra. About 30% of American households have no life insurance at all, up from 19% about 30 years ago. People of Wal-Mart: Struggling Life Insurers Seek A Middle-Class Revival, 25 July 2014, The Wall Street Journal

Those are staggering numbers.

Real innovators see the same trends, and see nothing but opportunity. The industry is totally up for grabs.

Cayman

“Of particular interest to your editor were the words—and the AK-47 speed at which they were uttered—of Jim Carroll”

At this time back in 2007, I was the opening keynote speaker for the Cayman Business Forum.

I had about 700 people in the room; international financiers, wealth managers, bankers. At the timel, Cayman was one of the world’s leading offshore banking centers.

I write about this now, because I return there tomorrow with my family, for a personal vacation. No keynotes! But having visited Cayman, I always vowed to go back, and am thrilled to be doing so.

When I was preparing for my keynote, I had the delightful opportunity of speaking for about 1/2 hr the prior evening with the Governor of the Cayman, H.E. Stuart Jack, at his home, where he hosted a small party with the local elite.

Part of my discussion with the Governor revolved around my belief that with forthcoming growth in Asia, and other major trends involving high-end skills, Cayman was certainly in the position of losing its lustre and standing in the global money race.

My keynote was open, honest, aggressive, and blunt.

Later press coverage showed that I certainly caught some attention — and that my message resonated with the Governor.

To set the scene, the best and the brightest from both Cayman’s private and public sectors had gathered at the Ritz-Carlton to hear presenter after presenter look into their crystal balls to predict the future of the Cayman Islands. Each year Fidelity Bank sponsors this event, bringing in distinguished speakers from overseas.

Of particular interest to your editor were the words—and the AK-47 speed at which they were uttered—of Jim Carroll, a chartered accountant from Canada who now bills himself as a “futurist.” Carroll makes a tidy sum sharing his knowledge and insights with large corporations and audiences throughout the world.

Carroll believes—and certainly convinced many in the room — that the global velocity of change is affecting every area of our lives. He cautioned that if we don’t adapt to this super-synapsed new world, well, we all recall what happened to Tyrannosaurus Rex.

To illustrate the concept of velocity, Carroll projected on a large screen an image of a charging
cheetah in full pursuit of one thing or another—our guess is a gazelle (lunch) — but it makes no difference to our tale . . .

By chance, after Carroll finished his dissertation, it was time for a coffee break, and we approached our good Governor, H.E. Stuart Jack, with a smile on our face and a question on our lips: Do you see any irony between the cheetah on the screen and the fact that the national symbol of the Cayman Islands is a turtle?

Today, Singapore, Dubai and London have transitioned to take over the role as global economic powerhouses in terms of wealth, money and banking. And the Cayman still finds itself playing a powerful role as the world’s sixth largest international banking center — but lagging behind the growth rates of other financial centersas most global wealth concentrates in Asia and the Mid-East.

What’s the moral of the story? I’m not sure — but sometimes, I hope that in some small way, my thoughts on stage, and the opportunity to speak at such an event, can help to shape future outcomes! Maybe turtles can transform into cheetah’s!

Send this to a friend

<---->