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US Mobile Banking Customers' Smart Speaker Objections Are Likely Temporary

Energy

Power Forecast Briefing: Fleet Transformation, Under-Powered Markets, and Green Energy in 2018

Trading Of US Linear TV Advertising Shifting To Programmatic Trading

Every Industry Is Now A Technology Industry

Online Video Bolstering Consumer Home Video Spend, Spearheaded By Subscription Streaming

Fintech
US Mobile Banking Customers' Smart Speaker Objections Are Likely Temporary

Oct. 11 2018 — A lack of interest among U.S. mobile banking customers in using home assistant devices for banking may be short-lived as they get more comfortable with the technology behind these products.

More than 60% of the mobile bank app users surveyed by S&P Global Market Intelligence in February said they were not interested in accessing bank account information through devices such as Amazon Echo and Google Home. Only 16.3% of survey respondents said they would be interested, and 22.8% were undecided. Amazon.com Inc. and Alphabet Inc.'s Google are among the companies selling connected home devices, often known as smart speakers, that allow users to control various household appliances and access online information using voice-activated technology.

If respondents answered no to the question about home assistant devices, we asked them which factors explained their lack of interest. More than half indicated that they did not own such a device, but only about a quarter said they had no plans to acquire one.

Low ownership levels may not remain an obstacle for long. Kagan, a media research group at S&P Global Market Intelligence, projected in June that smart speaker unit shipments in North America would reach 35.2 million by year-end 2018 and 40.6 million in 2019, up from 26.2 million in 2017.

Ally Financial Inc., Capital One Financial Corp. and U.S. Bancorp are among the banks that allow customers to perform some banking functions through Amazon Alexa, such as inquiring about balances and transactions and paying bills. Alexa is the artificial intelligence technology behind voice-enabled Amazon devices. Some other depository institutions linked to Alexa only make non-user-specific information available through that channel, such as interest rates and branch locations and hours.

Bank of America Corp. has gone in a different direction on AI-driven customer service with its own digital assistant. Dubbed Erica, this virtual financial assistant is available through Bank of America's app and uses both voice and onscreen interaction. About 24% of the BofA customers we surveyed said they would be interested in using a home assistant device to access bank account information, compared to 21% and 16%, respectively, for Wells Fargo & Co. and JPMorgan Chase & Co.

Security and privacy concerns were also significant factors in explaining unwillingness among our survey participants to use smart speakers for banking. More than 47% of respondents cited security concerns, while 38% cited privacy concerns. Survey participants could select more than one response.
But such objections might diminish as consumers gain more exposure to the technology, as has happened in other areas, such as the mobile channel for financial services itself. Our mobile payments survey results for the last two years show some decrease in security concerns as an explanation for why people choose not to use mobile payments.

This year's mobile banking survey found, not surprisingly, that younger banking customers are much more likely to be open to using home assistant devices for banking. Almost a quarter of our survey respondents from the Gen Z/Millennial age group, which encompassed ages 18 to 37, answered this question in the affirmative.

Time itself will likely play a role in increasing demand for banking access through this channel, as ownership of such devices grows and consumers who have relied on digital technology for most of their lives make up more of the market for financial services.

The 2018 mobile banking survey was fielded between Feb. 8 and Feb. 21, 2018, across a nationwide random sample of 4,000 U.S. mobile bank app users aged 18 and older. S&P Global Market Intelligence weighted the data to be nationally representative. Results have a margin of error of +/- 1.6% at the 95% confidence level based on the sample size of 4,000.

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Watch: Power Forecast Briefing: Fleet Transformation, Under-Powered Markets, and Green Energy in 2018

Steve Piper shares Power Forecast insights and a recap of recent events in the US power markets in Q4 of 2017. Watch our video for power generation trends and forecasts for utilities in 2018.


Technology, Media & Telecom
Trading Of US Linear TV Advertising Shifting To Programmatic Trading

Oct. 08 2018 — Both buyers and sellers of traditional linear TV advertising, not including connected TV or over-the-top video, are moving toward the adoption of programmatic trading. In 2017, Kagan estimates that $690 million or 0.9% of total linear TV spend was traded programmatically. Within the next five years, that figure is expected to climb to $9.76 billion or nearly 12% of total linear TV advertising revenue. MVPDs are forecast to trade the greatest percentage of their ad inventory programmatically in 2022 with 30% of ad revenue from programmatic trading.

Kagan defines programmatic trading as being automated and data-enhanced, not just one or the other. Trading may be through a private or open marketplace and does not have to be through an auction, which is more common in digital video advertising.

There are several issues holding participants back from programmatic trading. Unlike digital programmatic marketplaces, where there is a seemingly unending supply of ad inventory, linear TV has a finite supply. Demand for TV inventory exceeds the supply, so there is still an attitude of "If it isn't broken, don't fix it." TV ads are also bought well in advance, not immediately.

While many agencies have experimented with the programmatic trading of linear TV, not all are on board. Many of the advertisers and agencies are interacting directly with the supplier platform rather than going through a demand-side platform, or DSP, today. In their experiments, the agency needs to use separate platforms to aggregate inventory and tie it together, which is a lot of work.

The lack of inventory is one factor holding back programmatic trading. The only way it takes off is to make linear TV inventory available in some type of buyer platform that can combine the various supply platforms. It is even more complicated when the buyer wants to bring in connected TV (OTT).

Agencies do like the automation capabilities of programmatic, particularly where the process takes a lot of time. An algorithm may do better in areas such as weighting estimation, the first pass at scheduling and the negotiation process as well as postings and billings. The process of buying inventory is not difficult, but computing where a buyer will be able to find its preferred audience is. Therefore, interest in automating the planning and analysis to find an optimal audience is high.

We forecast a gradual uptake for programmatic trading with continued testing in 2018. Broadcast stations and networks, cable programmers, and MVPDs need to add more inventory to programmatic platforms before agencies begin using it in earnest. It will take time for all parties to feel comfortable transacting in a new way.

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Technology
Every Industry Is Now A Technology Industry

Highlights

And every company is now a technology company.

Sep. 28 2018 — As machine learning (ML), artificial intelligence (AI), and robotics become commonplace and enter the operations of mainstream organizations, leadership teams are finding that failure to harness and leverage AI puts them behind the competition. Repeatable tasks are carried out by bots in a fraction of the time and employees are more focused on adding value, which means companies on the forefront of technology can be more reliable, more user-friendly, and faster to market.

In this highly disruptive environment, one traditional truth of business has withstood, or has perhaps even guided, these technological advances: above all, the customer experience is king. More than ever before, businesses have effective technologies at their fingertips to quickly and effectively address customer pain points, while at the same time dramatically improving their internal operations.

At S&P Global Market Intelligence, we strive to get beyond the buzzwords and truly deliver essential insight. And second to this, we strive to adopt real operational efficiencies into our delivery that are paralleled by the workflow efficiencies we promise to our customers. To that end, we are committed to remaining on the cutting edge of emerging technologies, first through optimization, then automation.

Download a recent analysis of how we’re applying new technology like natural language processing to structure data, robotic process automation to deliver insights faster, and predictive analytics to stay ahead of the market.

You can also view this analysis in Spanish, Portuguese, Mandarin, and Japanese.

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Natural Language Processing – Part II: Stock Selection

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Natural Language Processing, Part I: Primer

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Technology, Media & Telecom
Online Video Bolstering Consumer Home Video Spend, Spearheaded By Subscription Streaming

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence.

To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Sep. 20 2018 — Spending on home entertainment is rising toward levels not seen since 2004, when consumers spent $24.37 billion building massive home-video libraries of DVDs and VHS cassettes. Since then, the optical-disc market saw more than a decade of significant declines as consumers shifted to digital entertainment. By 2012, total spending on home entertainment was down to $20.13 billion, with $4.13 billion coming from online video while DVDs and Blu-ray discs accounted for $12.88 billion and multichannel PPV/VOD contributed the remaining $3.13 billion.

Fast forward to 2017 and the mix of consumer spending has changed significantly. Consumers spent a total of $22.62 billion on home entertainment from multichannel, online and disc retail/rental sources. Online spending accounted for $13.00 billion of that total while spending on discs dropped to $6.84 billion and multichannel PPV/VOD shrank to $2.79 billion.

While the data might seem like good news for traditional providers of home entertainment, a key component of the growth in digital spending is the rise of subscription video on demand. The majority of online spending is going to over-the-top services like Netflix, Hulu and Amazon Prime, which increasingly have focused on creating original programming (mainly episodic TV) rather than licensing content from Hollywood studios.

Removing subscription streaming from the consumer spending pool paints a less favorable picture for traditional content providers. In 2012, consumers spent just $1.43 billion on non-subscription online video purchase/rental, and a total of $17.44 billion excluding the SVOD component. By 2017, while consumer spending on online video overall had risen to $13.00 billion, some $10.47 of that came from streaming subscriptions versus $2.53 billion from online video purchase/rental, and total home-entertainment spending was just $12.16 billion excluding SVOD.

Spending on sell-through home video peaked in 2006 when consumers shelled out $16.53 billion for DVDs and VHS cassettes. Since then spending has declined by hundreds of millions (sometimes billions) each year. In 2017, consumers spent $6.50 billion on DVD and Blu-ray sell-through and electronic sell-through. This seems to suggest that people are becoming less and less interested in adding to their home-video libraries and are turning to the more affordable streaming options. The story is similar for the home-video rental segment, which saw consumer spending peak in 2001 at nearly $8.45 billion before dropping to $2.87 billion by the end of 2017.

This has to be a somewhat unsettling trend for the major film studios, and is likely a key factor in shifting their strategy to focus on major franchise films and low-cost genre fare. The former tend to have broad worldwide appeal and can still move enough video units to help offset their high production and distribution costs. The low-cost genre fare, on the other hand, may be more risky and not sell as well internationally, but has a fair chance to break even. If the latter films lose money, the successful franchise films typically cover the losses.

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US Online Video Outlook To Eclipse $15B In 2018

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DVD, Blu-ray Spending Down $1B-plus For 11th Year In A Row

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