The story behind baby carrots is one of practical problem solving, creative innovation, and understanding consumer preferences.
In 1986, carrot farmer Mike Yurosek was buried in ugly carrots. He discarded tons of the useable, nutrition-packed veggies that weren’t up to supermarket standards for appearance.
Some market existed in livestock feed, but Yurosek remained bothered by the “daily tragedy of the cull...”
Then—a brainstorm. Irregular carrots could undergo makeovers via vegetable peelers and cutters to become not only aesthetically pleasing, but more convenient in their cleaned-up snack-sized form. Voila!
“Within a decade of baby carrots’ invention, national carrot consumption doubled.”
Yurosek did more than solve a personal dilemma. He altered the produce industry and consumer habit.
The financial services industry, too, has room for creative innovation and repackaging of existing services. This week, consider opportunities provided by the combination of technology and unique needs of members.
You might find the results of your creativity are dangling carrots for consumers.
‘Some guy invented Vitamin A out of a carrot. I’ll bet he can’t invent a good meal out of one.’ –Will Rogers
Technology impacts the way people use financial services. It allows for embellishment of traditional products that invite new consumer demographics.
“FICO Creates New Credit Metric for Risky Consumers,” says The Wall Street Journal. Millions of Americans are unable to get credit because they do not have acceptable credit scores. But a new credit scoring system might change that.
“The new score is largely a response to banks’ desire to boost lending volume by increasing loan originations to borrowers who otherwise wouldn’t qualify.” The innovative system will tap alternative consumer payment data from utility companies, change of address databases, and other variables.
Proponents say those who pay bills on time and demonstrate fiscal responsibility “should be rewarded similarly to people who are on time with their debt payments…”
With the new system, lenders will not only add to potential borrowers but earn additional revenue from the riskier cohort.
“Bank Branch of the Future? Think Apple Store,” says the Milwaukee Journal Sentinel. PNC Bank has created an environment reminiscent of retail as customers are met by “a universal financial consultant” who walks them through available technologies and make suggestions for better money management.
“It’s about having a conversation with our customers,” says a PNC manager for retail banking in Wisconsin. “Most of the customers are curious about the technology, and if we engage them in a conversation, they’ve been very receptive.”
Technology facilitates branch evolution and customer engagement at PNC.
Another example provides retrospective illustration of the impact of innovative technology in “A Brief History of the ATM: How Automation Changed Retail Banking.”
The ATM kicked off digital banking with “its humble and uncertain beginning nearly 50 years ago,” and has since become an integral part of providing financial services. Consumers enjoy fast, convenient account access and banks can “grow their customer base by granting access to consumers who’d previously been excluded.”
‘The day is coming when a single carrot freshly observed will set off a revolution.’ –Paul Cezanne
Read more about the marriage of innovative technology and personalization of financial services in “Meet Your New Financial Adviser” at time.com. “New websites called robo-advisers are promising smarter investment at a much lower cost,” notes the article.
The Internet companies make advice readily accessible at a “fairly cookie-cutter, if common-sense, investment approach.” Convenience will “finally open up advice to a bigger chunk of middle-class investors.” The technology is poised to make further impact in the marketplace as “the existence of the robo option puts pressure on everyone’s prices.”
But computers can’t do it all, and pairing the technology with a person helps consumers know when they’re ready to make big financial decisions or analyze complicated issues.
Employee Benefit News says robo-advisers will never eliminate established models. But “we think enhancements in financial services are good for competition and creating better products, tools and services for consumers.” And the technology “beats what the average person is doing right now in terms of investing, which is typically nothing.”
Research shows consumers want a personal touch as “Investors in U.S. With 401(k) Value One-on-One Advice Most,” according to Gallup. One-third of investors need advice, and 71% think a one-on-one with a financial pro is a “highly effective” way to get help.
Consumers want advice; many do not seek it in person, but those who do find it effective. How might you combine consumer need and preferences with technology in financial advising?
‘Innovation distinguishes between a follower and a leader.’ –Steve Jobs
Banks need to become simpler and more efficient to meet a financial environment transforming due to the influence of a global marketplace, digital business, demographic shifts, and a changing labor force, according to Global Banking Outlook 2015: Transforming Banking for the Next Generation.
“…Innovations in technology are already demonstrating the potential to drive a revolution through parts of the industry. They will also create new markets for banks as customer needs evolve.”
The report indicates that to grow, banks must serve new groups: “The unbanked in the emerging world and the underserved in the emerging and developed worlds.” This requires new products and partnering with other financial institutions and various entities to “leverage new technologies and generate fees.”
Simplification is essential.
Change is hard; exploring the unknown daunting. A strategy+business article suggests how you might “Boost Your Innovation Confidence.” The key to successful innovation is to know “that technology that can deliver against core consumer needs will trump consumers’ anxiety or hesitation.”
Further, providers should trust their instincts, because “executives know their customers better than they realize.” Also important is a culture in which employees have “freedom to fail” because innovation will not occur without experimentation.
Finally, realize you are in it for the long haul, and results might not be immediate.
“You know your customers. And when you combine what they want with a new technology that can enable it, and encourage your employees to go all in, you can cultivate the kind of judgment that lets you make the right leaps.”
LORA BRAY is an information research analyst for CUNA’s economics and statistics department. Follow her on Twitter via @Bray_Lora and visit the CUNA blog, “The Research Roundup: Economic Perspectives.