The unsociable FSA's Dr Pepper moment
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I originally produced this presentation for a webcast I hosted for BrightTalk in the UK. It offers a critical analysis of guidance issued by the UK financial services regulator - the FSA - about the application of social web tools for consumer communication within financial services. In essence, it claims the FSA has got the wrong end of the stick and that that's detrimental to consumer interests. This slidedeck is also posted at MRM's slideshare page at www.slideshare.net/MRMLondon.
The unsociable FSA's Dr Pepper moment
- 4. In June 2010, the UKs Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK
- 5. In June 2010, the UKs Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK Heres what the guidance suggests
- 6. Prevailing financial promotions regulation applies to platforms like Twitter and Facebook, and forums, blogs and iPhone applications.
- 7. It also said stuff thats difficult to disagree with like
- 8. It also said stuff thats difficult to disagree with like Use of social media should ensure clear, fair and not misleading communication with clients.
- 9. The trouble is, I ended up thinking
- 10. Whose financial services industry is it anyway?
- 11. Is it your advice or your clients?
- 12. Is it your advice or your clients? Is it your product or your customers?
- 13. Is it your advice or your clients? Is it your product or your customers? Is is about consumer engagement or an industry that can be regulated?
- 14. Because the way in which people like to communicate is changing.
- 15. And so I thought Id share my thoughts on
- 20. And like any good story it starts like this
- 22. our species just couldnt help gathering together (and still cant)
- 23. We couldnt help swapping stories, enjoying each others company and enjoying safety in numbers
- 24. Weve always liked to congregate together in order to exchange goods and services
- 25. Or congregate around shared values and beliefs
- 26. And, generally, have a good time
- 30. Language
- 31. Language
- 38. Technology
- 42. Technology
- 45. Nowbecause it relies on the transmission of a message via a medium
- 46. mass media content needs to be manufactured
- 47. Encoder So, at one end of the model, theres an individual or organisation that wants to transmit something
- 48. Encoder Message Which means they have to decide on the content of a message
- 49. Encoder Message Medium And select the media by which they intend to transmit that message
- 50. Encoder Message Medium Decoder In order to reach an individual at the other end of the process
- 51. Encoder Message Medium Decoder with access to the means to receive and understand the message
- 52. Encoder Message Medium Decoder So the rules of engagement are determined by those with the ability to gain access to the medium
- 53. Encoder Message Medium Decoder while consumers of content are subject to those rules
- 54. Encoder Message Medium Decoder Web 1.0 continued this pattern
- 55. Encoder Message Medium Decoder But Web 2.0 has entirely changed the potential of this role Web 1.0 continued this pattern
- 56. Free Thats because Web 2.0 has made the ability to publish content freely available
- 57. Free Technology Means of distribution Cash So cash is no longer a big barrier. The main Investment is time.
- 58. Free Technology Means of distribution The network for publishing and distribution is readily accessible
- 59. Free Technology Which just leaves you with the means required to publish content
- 60. And, these days, a mobile device is all that you need
- 61. Encoder Message Medium So the rules of engagement are determined by those with ability to gain access to the medium
- 62. Encoder Message Medium EncoderMessage So the rules of engagement are determined by those with ability to gain access to the medium And the rules of engagement are determined by those with ability to gain access to the medium
- 63. Provider Content Platform ProviderContent You end up with a model where so long as theyre prepared to invest the time individuals possess the same potential as organisations to publish content via platforms
- 65. (As in socialist everyone whos able to can participate equally in a common means of sharing and publication)
- 66. Which means the social web offers the equivalent of this
- 67. And this
- 68. And this
- 69. Because were able to real-ise offline interaction online via social platforms
- 70. Opting to participate in as few
- 71. Or as many
- 72. As we like
- 73. Which brings me neatly back around to the guidance for the use of social web platforms by the UKs Financial Services Authority (FSA)
- 74. By choosing to treat social web platforms and tools as a medium thats just like traditional mass media
- 75. The FSA is focusing its attention on the use of the social web as a means of pushing promotional messages
- 76. Rather than encouraging the use of the medium for a vastly more useful ambition:
- 77. Rather than encouraging the use of the medium for a vastly more useful ambition: To encourage consumer engagement with financial services businesses and so take care of their personal financial wellbeing
- 78. Rather than encouraging the use of the medium for a vastly more useful ambition: To encourage consumer engagement with financial services businesses and so take care of their personal financial wellbeing However people want to
- 79. Rather than encouraging the use of the medium for a vastly more useful ambition: To encourage consumer engagement with financial services businesses and so take care of their personal financial wellbeing However people want to and not just how the FSA would prefer them to
- 80. The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as
- 81. The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as The Dr Pepper moment
- 82. But the FSA needs to pay attention to its own statutory objectives, which are
- 83. Market confidence: Maintaining confidence in the financial system
- 84. Market confidence: Maintaining confidence in the financial system Public awareness: Promoting public understanding of the financial system
- 85. Market confidence: Maintaining confidence in the financial system Public awareness: Promoting public understanding of the financial system Consumer protection: Securing the appropriate degree of protection for consumers
- 86. And the FSA needs to heed its own principles of good regulation too
- 87. Proportionality: The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions
- 88. Proportionality: The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions Innovation: For example allowing scope, where appropriate, for different means of compliance so as not to unduly restrict market participants from launching new financial products and services
- 89. Because by paying a disproportionate amount of attention to prevention of the Dr Pepper moment
- 90. Because by paying a disproportionate amount of attention to prevention of the Dr Pepper moment The FSA may prevent consumers from helping build a better UK financial services industry
- 91. Like the way Starbucks customers help the coffee-shop brand enhance and design new products and services
- 92. Or Lego enables its customers to design the kind of products that theyd like to buy themselves
- 93. Or the way in which 37Signals enables greater transparency and service experience for clients thanks to tools like Basecamp
- 94. Or the way Trip Advisor enables travellers to share their opinion of destinations so people have richer sources of information on which to base choices
- 95. And even effect improvements in facilities by encouraging owners of businesses to address issues about the quality of their service
- 96. Consumer participation makes for better regulation
- 97. And besides
- 98. The use of social web platforms is only going in one direction
- 99. In 2000 27% of the UK population were online. In 2008 it was 76%. 86% of UK 18-24 year olds go online each day. And by 2013, 43.7 million UK consumers will be online.
- 100. So consumer habits are changing
- 101. So consumer habits are changing Consumption of content is changing
- 102. So consumer habits are changing Consumption of content is changing And consumer expectations of businesses are changing
- 103. Which means the FSA cannot ignore its own principle of good regulation for innovation:
- 104. Which means the FSA cannot ignore its own principle of good regulation for innovation: Allowing scope, where appropriate, for different means of compliance so as not to unduly restrict market participants from launching new financial products and services
- 105. when the most significant participant in the marketplace always has been and always will be consumers
- 106. If the FSA continues to insist on regarding the social web primarily as a means of pushing promotional messages
- 107. Decoder Medium EncoderMessage The rules of engagement will be determined by consumers with the ability to gain access to the medium
- 108. Decoder Medium EncoderMessage while regulated businesses will feel powerless to confidently engage with them The rules of engagement will be determined by consumers with the ability to gain access to the medium
- 109. Decoder Medium EncoderMessage And consumers will just find some other way of obtaining what they want instead
- 110. Now thats what I call a Dr Pepper moment
- 112. 6: Financial promotions industry update No 05 (June 2010), Financial Services Authority 22, 23 and 66: Campfire image by Kara Brugman 24, 67 and 105: Al mercatodi campo de' fior by Pyno Moscato 25: Vaulted roof interior by Tim Caynes 26 and 68: Lamb & Flag by Julia Manzerova 29-36: Manuscript by Liz Muffet 37-40: Hoes one cylinder printing press image, Wikipedia 41-44: TV aerial image by V鱈ctor Nu単o 60: iPhone image by William Hook 110:Dr Pepper can, Coca Cola Great Britain press centre Photography credits and sources