Wealth management has become a buzzword, especially in the age of digital transformation and more consumer control. Traditional financial services and fast-growth startups are racing to develop the best and most secure product. How do you set up a financial PM team that’s innovative and successful? Stash Product VP Vinod Raman discusses the evolving consumer needs in financial services, especially investing and wealth.
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On Building Fintech Products with the Consumer in Mind
Raman says his biggest takeaway from his career working with financial products has been the industry’s changed perspective with respect to the consumer-product relationship. While the traditional model began with a certain product, and then tried to teach the consumer about how to use that product, the newer FinTech companies like Robinhood, Stash, and Wealthfront instead looked at the reasons more consumers weren’t investing, and set out to build tools that solved that problem.
“The big change that we’ve seen the last decade is building products that are very consumer-centric, and building products that start with the consumer problem in mind. If you look at how financial services has approached product management for the last several decades, it’s been more around, what type of financial products do I want to offer? How do I construct those financial products? Is it mutual funds, ETFs, managed portfolios? And then how do I take those products to end consumers, educate them about those products, and then find the right fit for those products. That’s been the traditional thinking.
“And I think like what happened in the last decade or so is, it’s gotten flipped on its head a little bit. By that, I mean, the consumer tax came in, and then they started approaching product management with a very different lens, in that they said, I’m going to start with the consumer and build products that suit their needs. So I might not have very sophisticated investment products. If you think about what Wealthfront and Betterment started with a decade ago, it was probably five or six portfolios. And most of those portfolios had ETFs. And they came in and said, Look, a lot of consumers don’t have access to wealth products. So I’m going to solve for that consumer problem, and then build products that really solve those needs.”
On Engaging Fintech Customers
But narrowing in on the consumer problem is only half the battle, says Raman. The next step is to go above and beyond by engaging consumers and ultimately keep them using the product. This can involve aspects of gamification, but on a more significant level it involves empowering the user.
Raman asks, “How does [the product] fit within the broader customer journey? How do I make it really simple, really intuitive, and really engaging? Do customers regularly come back to the app? Are they engaged with the app or learning? Are they getting education advice? Or is it more of a set and forget it type of strategy?
“More recently, a lot of firms have figured out – whether you want to call it gamification – new exciting ways to engage the customer. A lot of fintechs have done a pretty good job of that. So it’s not only simple and intuitive, but it also empowers the customers and engages them, so that they feel that they have the control and the choice.
“And when you’re thinking about engagement, I’d say these are probably the things that we are constantly thinking about: how does that fit within the journey? Is it super simple and intuitive? Does it let the customer do what they need to do? Or empower them without them feeling like they’ve lost control? Does it give them choice? Or give them flexibility? And then does it give them the right insights, education, and advice? Are they coming back to the platform learning, and then they feel like they are making the ultimate decision, and they are in control? That makes the customer feel really good. It makes them return to the app. It engages them.”
On Optimizing for Business and Consumer Outcomes
Most of the up-and-coming fintech firms espouse a mission of democratizing financial services. But there is still the business side of things. Balancing business and customer outcomes is a delicate balance. A company might want to do what is in the best interest of the consumer. That company might also make money based on the number of trades that a consumer does. Raman asks, “So how do you optimize for both? And this gets into a lot of internal swirl. Aligning on how exactly you build the solution that would help you optimize across business and consumer outcomes is very important.
“Crypto is a great example. Crypto is very volatile. Should firms be offering that to consumers who are investing for the first time, whether it’s Robin Hood, or Stash, or Publix, or any of these FinTech firms? These consumers are probably reading about a stock or coin in some kind of social media platform, and then they’re coming to invest. From a business outcome, it’s great. But is that in the best interest of the consumer?
“If you optimize too much for consumer outcomes, then you’re not gonna be able to run a business. If you optimize too much for business outcomes, then you’re not standing by the side of the consumer. And in the long term, it’s not going to be a viable business. So how do you have those upfront conversations? How are you able to optimize that to truly deliver products that align with your mission, that align with solving those customer problems?