What The Beatles’ success on iTunes means for Banking…

The Beatles are arguably one of the most successful bands of all time, but their foray into the digital music space has long been frustrated. In their first week on the iTunes store, however, the Beatles amassed a staggering 2 million individual song downloads and over 450,000 in albums sales. Not bad for a band who [...]

Digital versus Traditional Advertising? Wrong Question

There is a debate that has been raging in Advertising quarters for almost a decade now – which is better Digital Media or Traditional Advertising. The fact that this question is being asked at all shows that most advertisers and institutions don’t get consumer behavior in the interconnected world. Considering that agencies are in advertising, you’d think they would get it right? Considering the declining ROI in traditional marketing approaches, you’d think marketing staffers would get it too right?

Bank CEOs, It's Time for Social Media (InternetEvolution)

What is unique about the social media movement at the moment is that everything you might expect it would be about — it’s not about. But the banks I meet are almost all remaining in a holding pattern, waiting for something to happen before they commit to this new medium. In this blog I explore one of the key reasons banks should sign up for the social media explosion, and what they need to do about it today!

Social media’s impact on banking

Chris Skinner, Chairman – Financial Services Club UK, and myself have been working on this survey over the past few weeks. The results, while predictable, show a requirement for RAPID adoption of social networking into the bank DNA. Bank’s are largely unsure of how to respond to Twitter, Facebook, LinkedIn and the like, due to the lack of ‘control’ the bank has over the medium. But customers aren’t confused or unsure – they are flocking to it.

According to data released today by Pingdom, aggregation of traffic and demographic data shows that social networks are dominated by the 35-44 age bracket. That flies in the face of conventional wisdom which asserts that Web 2.0 is a Y-Gen dominated arena. The fact is, if you want to acquire or retain your most profitable customers as a bank, either Retail or Corporate, you need to have a social media strategy…

Banking’s biggest challenge – Marketing 2.0 (HuffPost)

There are some massive changes occurring in the banking space today, but none so dramatic as what is happening in marketing and advertising.

Direct mail offerings have been declining rapidly since 2006. In 2009, less direct mail was sent by banks than in the year 2000. Direct mail has declined 32 per cent since 2007 alone. Direct mail is not unique – TV, Radio, Newspaper, Print are all declining in total Ad spend and in effectiveness. So what will marketing look like in 5-10 years time?

These changes require a complete rethink of the structure of the marketing department, and a complete new set of tools. This is the biggest fundamental change to the marketing department of the bank…well ever. I’m not surprised that quite a few of the banks I’m talking to are not sure how to make this transition, but that doesn’t make it any less likely.

The wrong type of innovation

The financial crisis of recent times was arguably triggered by innovation in the financial services sector around creative financial instruments. These so-called CDOs and ABS’ ended being unhinged from the underlying ‘assets’ that defined them and as such allowed a bubble of securities and subsequent contractual trades by professionals and institutions creating ‘value’. The fact is that this innovation probably started with the various rounds of deregulation of financial services, including the repeal of the Glass-Steagall Act in 1999. While some argue that this deregulation actually prevented a worse meltdown of the financial system, I would argue that regardless it allowed the creation of innovative financial instruments that ultimately led to the creation of a new class of speculative bubble – as if we need more excuses for those…

Innovation in financial instruments, in trading platforms and in margin creation is the wrong sort of innovation for banks to be focusing on. They need to be focused on organizational reform that rebuilds banks around customer engagement and interaction. Unless we see this sort of innovation it won’t matter how advanced the financial mathematics and instruments get – in the end if your customers are finding ways to work around your inadequacies you might just find you have no business…