Issue № 102 | London, Sunday 16 June 2024
Read on to learn why:
① AI should be a feature, not a product.
② Product names should be simple, but that doesn’t mean they can’t be clever.
③ UK challenger banks are now established, growing and exporting.
④ Tokenisation of collateral promises instant settlement and lower risk.
⑤ Marketing and Sales need to work hand in glove.
⑥ Working remotely is a privilege, not a right - and demands trust on both sides.
⑦ Insurers are sanguine about risk.
What's new
This week, Apple launched its AI offering in the most Apple way imaginable, the New York Times reports.
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In short:
“Apple said that it would be using generative A.I. to power what it is calling Apple Intelligence. The system will prioritise messages and notifications and will offer writing tools that are capable of proofreading and suggesting what users have written in emails, notes or text. It also will result in a major upgrade for Siri, Apple’s virtual assistant.”
“While introducing its new A.I., Apple emphasized how it planned to integrate the technology into its products with privacy in mind. The company said that the technology, which can answer questions, create images and write software code, would perform sensitive tasks. It showed how the system would be able to automatically determine if a rescheduled meeting time would complicate plans to attend a child’s theater performance.
“Apple struck a deal with OpenAI, the maker of ChatGPT, to support some of its A.I. capabilities. Requests that its system can’t field will be directed to ChatGPT. For example, a user could say that they have salmon, lemon and tomatoes and want help planning dinner with those ingredients. Users would have to choose to direct those requests to ChatGPT, ensuring that they know that the chatbot — not Apple — is responsible if the answers are unsatisfying.”
Why it matters
① I think there are three important lessons here:
Product differentiation: Apple has come characteristically late to this category - but with a far better conceived offering than any of its competitors. By doing something only it (and arguably Google) could do - connecting AI to its users’ most personal data - it has created a truly compelling proposition. Apple realised that, to appeal to the masses, AI shouldn’t be a product, it should be a feature - one that’s baked into every facet of its software. As a result, its version of AI is private, easy to use, genuinely useful, and - if not really free - at least hidden in the price of the overall product.
Product naming: Apple Intelligence is one of the best examples of feature naming I’ve seen in….well, ever. It’s simple, feels obvious not it’s been done, yet is Machiavellian clever in the way it appropriates the hottest buzzword in tech right now for itself. Apple has redefined AI and stolen its name too.
Product distribution: I’m guessing because it was so keen on gaining exposure to Apple’s lucrative customers, Bloomberg reports that OpenAI agreed to foot the - presumably considerable - bill for servicing all the free Apple users. OpenAI won’t gain access to their data but lives in hope that it be able to convert a small proportion of them into paying customers for premium features. This despite the knowledge that other AI providers will be coming to the platform soon. Apple has made no secret of the fact that it plans to ink deals with OpenAI’s competitors too.
In one fell swoop Apple has leapfrogged its competitors in AI, redefined and appropriated the term on everyone’s lips, and offloaded risk and cost to its partners. And if you’re in any doubt about how well Tim Cook has played this, check Apple’s stock price.
What to do about it
Take action
② We can’t all be Apple but that doesn’t mean we can’t steal pages from its playbook.
Product differentiation: It’s tempting to mimic what’s already on the market. Why not? It’s selling. Resist. Ask yourself if there’s a better way. What change can you make to transform the value of your product in customers’ eyes? What is your firm uniquely capable of delivering to the market?
Product naming: Names should be simple and clear. But that doesn’t mean they can’t be clever. Be bold, don’t shy away from an industry term, adopt it, appropriate it if you can, transform it if you must. Do it right and you’ll own it eventually.
Product distribution: Healthy partnerships have to be mutually beneficial, of course. But that doesn’t mean you shouldn’t think in terms of what you’d rather leave in the hands of a partner, be it distribution to markets that don’t appeal to you, reputational risk, or even costs you want to avoid. Some partners will be happy to take those on in return for something you can provide easily. What is that?
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Top stories
The other articles that are worthy of your time.
FINANCE
Starling Bank posts third annual profit ahead of expected London listing
③ UK challenger banks are now established, growing and exporting.
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“Starling Bank has posted its third full year of profitability as the digital-only lender grew its customer base and reaped the benefits of higher interest rates ahead of a planned IPO. The firm reported a pretax profit of £301.1m for the year ending on 31 March 2024, up 55 per cent from £194.6m the year before. Starling, founded in 2014, reported its first annual profit in 2022.”
“Starling posted a net interest income – the difference between what it pays out to savers and receives in interest from loans – of £592.9m for the year, up from £348.9m in 2023. Its net interest margin grew to 4.34 per cent to 2.72 per cent.”
“News of Starling’s sustained and growing profitability will buoy investors ahead of an expected big-ticket stock market listing. Starling was last officially valued at £2.5bn in 2022.”
TECHNOLOGY
Fidelity tokenises fund on JPM Tokenised Collateral Network
④ Tokenisation of collateral promises instant settlement and lower risk.
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“After launching its Tokenised Collateral Network last year, today Onyx by JP Morgan revealed that Fidelity International has tokenised a money market fund on the network so it can be used as collateral.”
“One of the most fertile areas for blockchain in institutional finance is anything that needs intraday settlement. Typically, collateral sits with a custodian, and it takes two days to transfer in Europe. However, collateral for trading, especially for derivatives, ideally needs to settle much faster to reduce risks. If it’s tokenised in a legally compliant manner, that transfer can be instantaneous.”
“Hence, last year BlackRock tokenised a money market fund on TCN, which Barclays used as collateral for a derivatives trade. TCN runs on JP Morgan’s private blockchain network.”
MEDIA & MARKETING
Disconnect between marketing goals and business objectives
⑤ Marketing and Sales need to work hand in glove.
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“Only 39% of marketers are confident their department's goals are aligned with overall business objectives. Despite 74% of marketing teams being seen as strategic partners, more than a quarter (27%) of marketers feel disconnected from the rest of the organisation.”
“Although strategic collaboration and data-driven decision-making are key to success in modern marketing, many don’t know how to harness its power to drive growth. Only 18% of individual contributors understand how their department measures the impact of their marketing efforts, while 23% confess their department hasn't fully embraced a data-centric approach.”
“Online conversations about marketing and collaboration have skyrocketed by a staggering 41% year-over-year. 79% of marketers believe collaborating with other departments improves the quality of their work. 73% report being strategic partners to other functions within the organisation. 62% of marketing professionals say that their marketing department is closely connected to the sales department. Only 57% of marketing professionals say the marketing and sales departments celebrate successes as one team.”
WILDCARD
Bankers fired for ‘simulating’ working from home
⑥ Working remotely is a privilege, not a right - and demands trust on both sides.
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“Wall Street bank Wells Fargo has fired more than a dozen employees for allegedly faking being at their keyboards, as financial firms crack down on non-compliance among hybrid workers. The bank said it dismissed the staff last month ‘after review of allegations involving simulation of keyboard activity creating impression of active work'‘, according to filings with the US Financial Industry Regulatory Authority.”
“It is not clear from the Finra filings what techniques the staff had used to allegedly fake work. As working from home grew more popular during the Covid-19 pandemic, devices like ‘mouse jigglers’ boomed in popularity, designed to fool bosses into thinking staff are actively working when they are not.”
“Wall Street firms have been among the most aggressive in ordering staff back to the office. Wells Fargo moved slower than the likes of JPMorgan Chase and Goldman Sachs, although it now expects most staff to be in the office for at least three days per week.”
The Artificial Intelligence Spotlight 🔦
Mistral, a French A.I. start-up, is valued at $6.2 billion
Builder: Give your marketers the toolkit to transform designs into optimised web and mobile experiences.
DomoAI: Transform videos into various animation styles, convert static images into dynamic videos.
PageGenie: Create high-quality SEO content for your brand — at scale.
Off cuts
The stories that almost made this week’s newsletter.
FINANCE
🔻 French stocks tumble to worst week in two years over election fears
🏅 London Stock Exchange boss Julia Hoggett among business leaders honoured
🏢 Revolut to move headquarters to heart of Canary Wharf
🧀 St James’s Place poaches finance chief from UBS
🧑🏻💻 JPMorgan hires ex-PayPal exec as CTO
TECHNOLOGY
👏🏻 Hannah Donson appointed as KPMG's UK head of fintech
🇪🇺 European blockchain sandbox reveals second set of participants
🏦 Do wholesale CBDCs compete with bank services?
🌍 Santander to take in-house-built tech platform global
MEDIA & MARKETING
🔎 How Google’s new generative AI rollout is redefining SEO
📰 How Jeff Bezos is trying to fix the Washington Post
🦾 How AI-focused CMOs are struggling to advance uses of the technology
🤖 AI-powered marketing: Enhancing personalisation and efficiency
The last word
⑦ John Neal, chief executive of Lloyd’s, on risk:
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“Where there’s a problem, there’s usually a solution.”
Don’t settle for marketing.
Strive for InMarketing.
Wishing you a productive week,
P.S. Choose your words carefully; they’re so important.