Speech from the Financial Services Forum Annual Dinner 2017

I was honoured to be asked to give the keynote speech at the Financial Services Forum Annual Dinner at the Guildhall in November.

My theme was innovation, disruption and trust building.

You can find the text of the speech following:

Thank you David, for your kind introduction and to the Forum for inviting me to speak here tonight.

The Financial Services Forum has always held a place in my heart since I remember joining in the early years of my career whilst at Deutsche Bank and, of course, I was humbled to win the Marketer of the Year Award in 2008.

I remember being very nervous that night and thinking that I would never win. The chat on my table was excited especially when one of the team came back from a loo break and said that they had overheard someone saying that they had voted for me! Then another person came back from a quick ciggie and she said that she too had found people who had voted for me. So my advice is if you are up for an award tonight, and want to know your chances then I’d hangout in the loo or go for a fag!

Anyone nominated for an award tonight – I wish you the very best of luck.

Tonight I earn my dinner by taking a few minutes of your time to talk about technology and financial services. Finance has been an early adopter of new technology – from the abacus to the mainframe computer and as an industry it has always been critical to our economy. We are blessed that the UK consumer is very open to trying new things. ClearScore, my company, has taken an approach to empowering people with their credit data and we have seen fast adoption, now our product is used by nearly 5.4m users in the UK and 250,000 in South Africa. We have delivered our fair share of disruption. But as I have built my career and operated in our industry I ask myself the question:

What are financial services really for?

Obviously at some level it’s about capital. Looking after money and assets, growing them, making them flow, managing risk. But I also think that at a very deep level, especially in the capitalist democracies in which we live and that are so under fire at the moment, finance is about managing and growing a very different form of capital and that’s social capital or to put it another way trust. In the delicate eco-system that is our economy and our industry, especially in the UK and Europe, trust is in danger of continuing to diminish.

This year’s Edelman Trust Barometer survey showed that still less than half of people trusted our industry. Financial services are the least trusted of all the business sectors and that is as true today as it was in 2007 before the financial crisis. You’ll be pleased to hear that in another survey from 2015 58% of people said all of us working in financial services were at best unprofessional and at worst dishonest.

The good news is it’s not just us. Almost every profession from politician, to journalist, to doctor, have seen decreases in trust over the past 20 years. The media is no longer respected, replaced with news of the royal wedding and Trump’s constant tweeting.

This collapse in trust is very significantly problematic for our economy. Every economy that has thrived has had embedded within it a complex mesh of bonds of trust that help to lower transaction costs. Whether it is the stock markets in the UK or US, or chaebol based families in South Korea, or the local SME business groups that are prevalent across Germany, all of these myriad structures help to make capital flow by creating trust between people.

Almost all change in financial services requires our system to work together at very many levels. We need to operate in an environment where the consumer, the regulator and the industry trusts each other. Now, of course, this mustn’t be blind trust but it also must assume a baseline of trustworthiness otherwise the barriers that we put up to working together, and winning the trust of the consumer, will become insurmountable.

Technology can help build both financial and social capital and it can do it fast. Look no further than Bitcoin. Just this week this new currency broke the $10,000 mark for the first time. The learnings from Bitcoin are numerous. The technology is opensource and transparent. The currency solves several major transaction issues for users in major industries. The system relies on multiple entities working together, competing to create coins but collaborating to innovate around use cases. I’m sure there will be lots of debate over your main course about the outlook for cryptocurrencies but what opensource distributed ledger technology has been able to do is build significant amounts of trust in a very short amount of time and captured increasing amounts of financial capital.

In the UK, for many reasons from Brexit to increasing inequality, I believe we are at a turning point for our economy. Historically we have enjoyed a particularly strong base of trust. From social norms, to our class structure and enduring entities from the Bank of England, to our courts, to the local pub, that have served us very well. And banking has contributed significantly to this system.

The profession of banker was always traditionally seen as solid and dependable. Banks were full of people who were part of our communities, working from buildings on every high street, who were known and were trustworthy and trusted. Products and decisions were simpler, and more transparent.

This reputation for trust across financial services didn’t happen by accident – it was hard won over centuries. We gather here today in the Guildhall at the heart of the City of London Corporation. The corporation is the oldest continuous democratic commune in the world – having existed for over 2000 years. From the Roman’s, to William the Conqueror, to the Stuart’s, the City has survived as a bulwark for the advantages of democracy and free trade, thriving through the rule of law and lots of social ties fostered through Freemen, and Councils, Courts, Halls and organisations like the Financial Services Forum, and of course, the very many bars and pubs that we enjoy to this very day.

But despite this history, our reputation has severely compromised. However, I strongly believe that we can use our collective will, our capital, our ingenuity and technology to redress the balance.

Today the Prime Minister, the Newspaper editor, the CEO are rarely very trusted. Much of the collapse in our reputation is connected with this lack of trust in authority. These authority figures have been replaced by “people like me”. Witness the power of TrustPilot or Glassdoor.

Technology can help bridge the divide between all of us and our customers. The social web, chatbots, artificial intelligence and machine learning fused with real conversations facilitated through video for example allow cost-efficient interactions with a more human feel. Experiences like Cleo which uses AI to chats to me on Facebook about my money every morning, or ClearScore’s financial education chatbots used by more than a million people – these interactions are involving, warm and funny. This can help bring back the human whilst leveraging the efficiency and convenience of a technology enabled bank in your pocket which has often removed human warmth and connection from financial services.

There is no doubt that much of our mind space whether we work for established institutions or small start-ups is dominated by the idea of disruption and disrupters. At one level this is a good thing. The regulator wants more competition, there are still very many under-served consumers, large institutions struggle with new technology, data is opening up all the time, and in many cases markets needs to be made more efficient.

But at another level disruption seem oppositional and aggressive – it creates tension – thoughts of the winners and the losers – it creates sides. And whilst we need to compete fiercely in the market for the good of the customer, dedicating ourselves to delivering better services, at lower cost, more efficiently. We also, if we are to re-establish trust in our industry and rebuild our collective reputation, need to actively support each other and collaborate more.

When I see disrupters attacking banks for over-charging on a foreign exchange transaction, or scandal after scandal from the investment banks, or the government using the regulator through PPI to redistribute money back into an ailing economy, or major financial institutions being reluctant to embrace open banking I wonder whether we are not putting short term commercial gain above longer-term maintenance of the trust that is fundamental to our success. We may win the individual battles, but lose the collective war.

What we create when we attack each other, either through our messaging or our business models, is a confused and untrusting consumer. That consumer is increasingly frustrated with the services with which they are being provided without any real understanding of why they feel this way. All they are left with is a vague sense that they are being ripped off by a system that they don’t understand and is full of bad people doing bad things.

Now whilst there are those in our industry who do the wrong things, most people I know who work for financial services companies are talented, committed people, like you and me, trying to do good things for our customers whilst operating in this sea of mistrust and confusion. Certainly the 160 people who work for ClearScore are some of the most committed and trustworthy people I have the pleasure to know – your teams will be the same.

So, we must continue to execute the obvious functions of our industry well – manage capital, be prudent with risk, help our customers make good financial decisions, create fair and balanced products. But our mission must be to work together to build back the social capital in our industry and our economy.

Tomorrow when we are back at our desks, as we think about our business and brand strategies, or develop our propositions, talk with colleagues and customers, or invent our next new innovation; whether we work for the largest of banks, or the smallest of start-ups, whether we are the disrupted or the disrupters we should take a moment to think back to this evening, to this wonderful room, and the history it represents.  We should dream big about the application of technology to solve real customer problems. But above all everyone of us should dedicate ourselves to continuing to win back the trust of our nation through hard work and our ingenuity collaborating to build a better, more trusted, more trustworthy financial services industry. To achieve this would be a true contribution of which we all can be rightly proud.

Thank you.

Google to Alphabet: smart move but not radical at all

First published in Marketing Magazine 11th August 2015

The move from Google to Alphabet is far from radical; it’s well trodden as a business model by FMCG giants like P&G and Unilever, argues Justin Basini, co-founder and CEO at ClearScore.

With the creation of a holding company called Alphabet they are starting to look more like a Procter & Gamble or Unilever

The blog post announcing the rebranding of the Google into Alphabet this morning has taken everyone a bit by surprise. The markets have generally reacted positively with a 5% rise in the stock with the normal commentary both good and bad. We should admire Larry, Sergey and Eric that for once, in our world of obsessive management of investor expectations they have actually managed to steal a march on the millions of eyes watching Google.

Tradtional and well proven model

Many commentators have hailed this as a “radical” restructure adopting a model akin to Berkshire Hathaway. However, from a brand management perspective the move is treading a traditional and well proven model. With the creation of a holding company called Alphabet they are starting to look more like a Procter & Gamble or Unilever: that is a holding company with a wide portfolio of businesses and brand assets. The manifest benefits of this approach that has served the packaged good behemoths for over 100 years will deliver undoubted benefit to Google going forward.

Nobody likes companies that are too powerful, witness the fall of Tesco as it sought to become ubiquitous and got out of control

There are consumer benefits. Nobody likes companies that are too powerful. Witness the fall of Tesco as it sought to become ubiquitous and got out of control. Imagine if the brands we buy from P&G were not Ariel, Fairy, Pantene, Pampers, Gilette, Max Factor, Oral-B, Duracell, Lenor, Clearblue, Vicks but all of them called Procter & Gamble? We would start to freak out that one company could be so pervasive and dominant in our lives. As Google has broadened their offerings from search to email, to office apps, to mobile phones, to laptops, to household control, to cars; all of these being linked very clearly to the Google name creates the same concerns and worries. Moving to a house of brands under Alphabet will help manage some of these risks and drive growth.

Privacy concerns will manifest at Alphabet

The establishment of lots of different brands potentially may make it considerably harder for us to all understand where our data and information is going

Next, whilst taking the brand benefit, the establishment of a central infrastructure for Alphabet with central management and resources will allow assets to be shared across the different businesses. It is in this sharing that I think the most concerns may arise. Collection and manipulation of data, often playing close to privacy concerns, is hard-wired into Google and will therefore manifest itself at Alphabet. The establishment of lots of different brands potentially may make it considerably harder for us to all understand where our data and information is going. If I use Google search is this going to be shared with my separately branded self-driving car or my central home control unit?

Google has struggled with transparency

I’d also bet that Twitter will be an Alphabet company in the next 12 months

Brand trust is built through transparency and openness. Google has struggled with this in the past and many people don’t trust the brand. This potentially becomes much more complex in a holding company structure. For perspective, the consumer packaged goods companies have wrestled with this as well. They know a huge amount about their consumers across different brands and have experimented with cross promotion by using this understanding at a holding brand level, exploring whether consumers want a direct relationship with the P&G or Unilever brand. Results have been very patchy – people tend to be more suspicious and wary, rather than welcoming. In our hearts we like products and brands that do one thing well, rather than interacting with huge mega-corporations that know rather too much about our habits for comfort.

Alphabet is an engineering company, not an ad business

The last reason why this strategic change shouldn’t surprise is that it is a natural fulfilment of the vision that Sergey Brin and Larry Page outlined 11 years ago when they founded the Google. They have always wanted Google to be an engineering company in the broadest sense. Google is now an information and advertising business. The move to establishing Alphabet allows them to build different competencies and leverage different structures to solve a broader set of problems. Given the astonishing rise of Google and the undoubted benefit that it has brought to the world and all of us in such a short space of time this could be really exciting.

I predict that the move to Alphabet will be successful and create value for shareholders, and hopefully the world. I’d also bet that Twitter will be an Alphabet company in the next 12 months!

Rebranding lessons of hibu / yell.com

Over the last couple of weeks yell.com has been rebranding as hibu. This is the latest example, in a very undistinguished line, of such rebranding failures.

When the best a CEO can muster about his companies' latest rebranding is this quote below you know the company is in deep, deep trouble. 

'don't read anything into it….It doesn't have any pure meaning behind it. It needed to be short, easy to pronounce and to sound edgy and innovative. It doesn't mean a lot by itself, but if you turn the clock back, neither did Apple and Google or Yahoo!' 

Mike Pocock is the CEO of hibu which in the latest example of rebranding has became the new name for Yell.com. Yell.com has been through at least a couple of major rebrands as it struggles to make any sense of it's Yellow Pages listing business model in the internet age. They recently acquired Moonfruit.com as a way of trying to help SMEs and their internet presence. hibu or as the company might have us write: hibü is the latest work from Landor – that purveyor of snake oil to companies with more shareholder money than sense. I am sure that the Landor team are seething as they read the quotes from the CEO on their beautiful retina displays. 

The rebranding of hibu illustrates some of the key mistakes that are made far too often as a company makes the decision to rebrand and change name: 

1. The new name doesn't mean anything to anyone:

This is most likely to have been dressed up as a benefit by the inventors of the brand hibu. It isn't. Given the companies massive financial issues they are not going to be able to afford a huge marketing budget to vest this meaningless word with brand associations. They may think that it is a positive move dropping all references and equity built up in Yell.com or indeed Yellow Pages but to eschew these assets is foolhardy. The fact that they have gone for the immediate rebrand, rather than a phased approach, again make the journey to establishing the new brand very hard. The rebrand has very little logic – this taken from the hibu website exemplifies the problem: 

To meet the ever changing needs of our merchants and our consumers, we are transforming our business to be more digitally led. We are making it possible for our consumers to connect with our merchants how they want, whenever they want. We are developing innovative new products and a dynamic new brand signals that we are a digital business of the future. When people connect, communities thrive, and we are a vital connection in an ever changing world. That's why we have changed from Yell to hibu.

Now I may be missing something but this paragraph makes no sense as a logic for the rebranding. There is no reason why the move of the business into digital has delivered the name hibu, argubly Yell.com is a more digitally led name. 

2. A brand optimised for the internet age and search?

I bet this was a big part of the pitch for rebranding. I'm sure Landor will have rolled out a 28 year old 'internet and search expert' to bamboozle the board with promises about how this name because of it's construction and newness was going to deliver exceptional power in ranking on Google. This is of course generally an absolute load of old tosh but is so common to hear now – it's the reason for the rash of names with a double "o" in them for example. There was an idea floating around that Google somehow favoured certain combination of letters because they were less competitive to rank on hence Ooyala and the like. The secret to ranking on Google is to deliver high quality content and make your pages search friendly – if anything non descriptive names make it harder to rank not easier. 

3. Lack of engagement from the top down?

From the comments from top management in the press they don't seem that committed to the rebranding and this makes me suspect that the organisation hasn't been engaged in the hibu rebranding process. This is the most common mistake that is made when trying to change a culture, a name, or a business model. It's the people within the organisation that should feel vested in the new name and making it's promises come alive. However most engagement processes start with the brand book or internal roll out campaign once all the decisions have been made. Rebranding and brand renaming needs to come from within and this requires engagement in the process from the very beginning. 

4. A brand name just trying too hard… 

Like Consignia or Monday, hibu is a name that is just trying too hard. I know that's a very difficult thing to substantiate but there is something in these names that come from a process that is vested in focusgrouping and whiteboarding – they lack authenticity. They are artificial creations rather than really coming from a place of organisational difference. Apple as a brand name works for that organisation (or it used to) because it encapsulates the "think different" logic that was Steve Jobs' brilliance. Google works because it somehow embodies the geekiness of that organisation based on algorithms, advanced maths and technology. hibu is just trying to be cool and doesn't embody any of the attributes of that organisation.

Given their latest results are flatlining I think rebranding yell.com is very unlikely to be the knight in shining armour coming along to rescue and somehow give meaning to the company. Yell.com was a smart way of attempting to link the past with the future – it had a logic and could have had a personality. hibu doesn't mean anything to anyone and because of this it is facing an uphill struggle. 

What do you think of this rebranding and renaming? Do you like the name hibu? Leave a comment below and get involved. 

Justin

BUSINESS VISION – LEARNING FROM SUCCESSES & FAILURES (Screencast)

Business Vision: I was recently asked by a major corporation to prepare a talk on "Business vision" and how to create them. I told two stories one of Citigroup a massive bank and it's flawed vision and one about a much smaller clothing business Patagonia and it's inspirational leader. 

This screencast is a 20 minute version of the hour presentation buts gives you the key points of the stories. 

The key points illustrated by these compelling stories of success and failure around setting a business vision are: 

  • Business Vision requires leadership that listens and learns but can also lead from the front
  • Business Vision requires head and heart to be compelling
  • Business Vision needs to be creative but also pragmatic to be effective 

Here is a great article from inc.com about creating business vision that is well worth reading. 

What do you think of business vision?

What do you think about business and brand visions? Do they inspire you to feel great about the business you work in or run and it's business vision? Leave a comment!

If you want to see the full presentation including the videos then visit the presentation on Prezi.com.

You can also see me speaking here.

Want me to speak at your business or team event? I regularly speak about trust, business vision, brands, marketing or a wide range of topics tailored to your event – please get in touch.

Thanks

Justin

At last! My book Why Should Anyone Buy From YOU? available on Kindle

trust kindle

I am delighted to say that at long last my book – Why Should Anyone Buy From YOU? is available as a Kindle edition.

Now you can read all about how trust works, what you can do to create, nurture and capture it on your favourite e-reader. For more information on Why Should Anyone Buy from YOU? including videos, praise and free chapter click here.

WHAT ARE BANKS FOR?

This article was published first in the Financial Services Forum’s Argent Magazine – Autumn 2011.


What are Banks for, if not to feather their own nests?

If we truly want to address the trust issues in financial services, I believe we need to ask some deeper, more fundamental questions about the nature of trust and what we’re here to do, individually and collectively.

 

The first step, especially following the turbulence of the past few years, is to recognise how complex an entity trust is – easy to feel but difficult to understand. The brand and industry trackers show trust going up, down and sideways – there’s little consistency. In reality, while we haven’t seen people pulling their money en mass from banks or more switching from one brand to another, it feels as if the standing of financial services brands is at a low point.

 

To understand what’s going on means recognising the distinctive layers in the concept of trust:

 

Functional trust underscores how well an industry or product group works to deliver a functional benefit. Here, banking actually continues to score highly and trust levels have actually increased – even more so since the government proved it would stand behind the banks. We all trust that a bank will work to deliver core commodity functions reliably.

 

Affective trust is where financial services companies have a real problem. Very few people have affective trust in financial services brands and virtually no-one trusts the top bankers who serve as figureheads for our industry. They’re seen as defensive and self-serving. All the TV and newspaper advertising behind the message “We’re ordinary people working for you”, doesn’t move the needle, despite what a brand tracker might say. These messages are perceived to be superficial, actually creating more mistrust and frustration with our industry.

 

It’s galling for a consumer to hear these advertising messages while also hearing a CEO defend massive bonus payments or threaten to leave the country when taxes are discussed. People integrate these messages. In our hyper-connected and hyper-transparent age, consumers assess brands and business on a range of competing dimensions to get very near the truth.

 

The trust in business, and the banking industry especially, that people used to have and that gave a legitimacy to our commercial activities has been decreasing alarmingly in the West. Business leaders are now seen as “doing the right thing” by only 20% of the population.

 

And there’s now clear evidence that commanding deep trust is a hard business issue, not a soft, intangible matter to be addressed through superficial communications alone.  It’s already directly impacting balance sheets and business models – just look at the cost of compensating for this lack of trust through vastly increased capital requirements or the ring-fencing of retail operations suggested by the Vickers report. All because we as an industry are seen not to be worthy of trust.

 

Against that background, most “normal” people are asking: What are financial services and especially our banks here to do, if it’s not just to feather their own nests? This assumption of self-serving goes to the heart of our business – and we will continue to suffer as regulators become more aggressive, spurred on by an increasingly frustrated and angry public.

 

However, those brands that truly commit to both social and commercial good, that contribute to social capital through their activities and that mobilise their workforce locally and authentically to take this message out – for them, these are the most exciting of trust-building times. Authentic, real, connected trust has always been at the heart of the profitable customer-financial services relationship. That’s why it receives so much attention, and why building it continues to be the right thing to do.

 

Read more about creating a sustainably trusted and trustworthy business and brand in Why Should Anyone Buy From YOU? (FT-Prentice Hall) by Justin Basini. It’s Available on Amazon and in all good bookshops.

Marketing Week: “The three bitter pills you need to take to restore brand trust”

Richard Madden, Chief Strategy Officer at Kitcatt Nohr Digitas wrote his column in Marketing Week (20th October 2011) on restoring trust in business inspired by my book Why Should Anyone Buy from You?

You can read the article by clicking below

PDF Richard Madden in Marketing Week writing about my book and brand trust

and

Online here:  Marketing Week column Richard Madden

Thanks

Justin

HUMBLE IN THE FACE OF YOUR CUSTOMER

Excerpts from my interview with Nigel Gilbert – CMO of Virgin Media and former CMO Lloyds Banking Group

“All institutions, but especially financial services ignore a lack of trust at their peril. One of the positive outcomes that I hope from the recent difficult period is a diminishment of the arrogance that businesses have often treated their customers and clients with in the past. Arrogance is a deeply untrustworthy and unattractive trait. You should always be humble in the face of your customer. They have a choice and you shouldn’t simply assume their loyalty. ”

“They must look into their own hearts and really see what they are doing. There is often a dichotomy between what companies say they are about and what they actually do – their actions and their words are different. Organisations need to be more forensic about their activities, the impact of their actions and how they are perceived.”

For the complete guide on how to create trust in your businesses and brands get your copy of Why Should Anyone Buy from You? BUY NOW

STICK TO YOUR STORY

There is huge power in having control over your brand’s narrative and its evolution. To watch Steve Jobs delivering an Apple presentation about their latest product is to witness a brand completely in control of the development and evolution of their narrative.

Don’t fall into the short-sighted trap of focusing on one campaign at a time, especially when the pressure is to acquire new customers or drive volume. Any new communication must be seen within the context of past and future promises.

The best brands:

  • Understand and build on previous messages.
  • Commit to and reinforce key benefits.
  • Bring to life their mission, motivations and the culture through their actual achievements.

These are the characteristics that help brands move forward and develop consistent space in people’s minds.

For the complete guide on how to create trust in your businesses and brands get your copy of Why Should Anyone Buy from You? BUY NOW

 

LEADERSHIP: FROM SHAREHOLDERS TO STAKEHOLDERS (CMO Conference)

Last week I gave a talk at the 3rd Chief Marketing Officer (CMO) Conference in Zurich entitled:

Leadership in Marketing: from shareholder value to stakeholder value.

You can see the presentation at my slideshare site.

The presentation can be summarised through the following themes.

Marketing has been fantastic at creating consumption which has been the engine of the increase in material standards of living in the West. But that consumption in its current forms is becoming a drag on well-being not a way to increase happiness and well-being, it is also massively unsustainable as populations grow and more aspire to a consumer lifestyle. This together with the increasing sophistication of marketing, cynicism of the media and lack of understanding of why business exists means that trust has been eroded. Marketing is at some level culpable for the over-consumption that is an acute threat and more generally consumption which is a chronic threat. Leadership in marketing will be seeing these issues and responding to their challenges in a way that can restore trust and legitimacy for brands, business and marketing.

Some of these themes have been recently covered in an article that I contributed to in Marketing Week and also much of this thinking comes from the other blog I founded: www.conservation-economy.org.

Phew, there it is (now you don’t need to look at the presentation!)

Please if you have comments or thoughts please share them.

Thanks for reading,

Justin

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Justin

Mail me: justin@basini.com
My website & the RE:Thinking Marketing & Brands blog:http://www.basini.com/
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