How Banks Must Regain Trust (Hint: Not Via Advertising)

John Bell at Social Media Today has a timely post on what banks and financial institutions need to do to regain people’s trust. Here it is, reproduced in full…

The headlines this past week were scary. Brands like Lehman Brothers crumbling, Merrill Lynch being helped up like an old lady, and 12 banks “failing” this year. Despite all of this, we all understand we are in a “cycle” and Western capitalist society is not being extinguished. (how deep the trough of the cycle is remains a concern)

Retail banks cannot stop trying to attract and keep customers. Investment houses will change up the paper yet offer investments nontheless. But some serious trust has been lost. Managing our own personal finance is one of those things that the average American feels less and less confident about. Most of us have no choice but to surrender our trust to financial experts and institutions.

The Next Marketing Wave for Banks
Recent headlines reveal that we shouldn’t trust our financial insitutions. So, what is a bank to do to bounce back? The following are 5 steps that a retail bank (one serving regular consumers like you and me) should do to earn trust and loyalty:

1. Stop your traditional advertising with your old campaign now
Paul Farhi at the Washington Post has a great article about the falsely confident advertising of major financial institutions. AIG’s slogan is “The Strength to Be There.” Very few banks are even sensitive to building a brand with deep roots in the organization through customer service, credo and employee behavior. Ray Davis at Umpqua Bank knows what he is doing in this regard. Most banks think brand development and advertising are the same thing. Right now and for the next few weeks if no longer we are in what we call “crisis mode.” Everyone knows the banks are in trouble. They know their institutions are not as solid as the architecture is meant to make you feel. So, stop throwing good money after bad. Stop reinforcing the idea that bank leadership is out of touch with reality by delivering your same “plan for retirement” ads.

2. Make a commitment to educating your customers on personal finance
I need a course. I need a coach. I need someone who gives a #@%$ about whether I can hold my own financially over the long haul (therefore being a strong, fees-paying customer for years). All the research shows that customers feel inadequate when it comes to managing money. Banks should consider programs that help us get smart and make better decisions. It’s kind of like consumer driven healthcare. I accept that no one but me will manage my health or finance. Help me get smart so I do a better job of it. A major bank should partner with a major online university to offer personal finance courses.

3. Whoever said corporate blogging is dead is an idiot – start a blog for godsakes
Or a Twitter account. Or a mobile update system. Or all of this. The platforms are not nearly as important as putting employees in the position of communicating out to customers. What are they seeing in the markets? What are bank employees working on? Give me ideas for getting smart about my money. I need to know that there is a human being in there – preferably one who cares about customers like me. Who are the financial personalities that we get to know? The CEOs from Fannie Mae and Freddie Mac? Or the loudmouths in pundit media whose allegiance is somewhere other than to the well being of their audience. Time for authentic, regular joe relationships. I want to know the bank manager again. In terms of introducing personality through social media, just don’t think this video from Bank of America qualifies as a good move. While the guy has a great voice, I feel like I am watching an epsiode of The Office.
Other examples of banks & social media:
Wells Fargo’s blogs
Fidelity’s podcasts

4. Listen and react to your customers publicly
The ideas.salesforce platform is a strong concept. And it’s not just releavnt for Starbucks and Dell. What if a bank put that in place? Maybe my post would end up on ideas.suntrust.com instead of out here in the ether. Empower your customers to offer ideas to other customers.

5. Advertise all of the above and build a strong community around your bank built on trust
Stop advertising just rates or adirondack-chairs-on-porches-signifying-retirement. I mean, really, retirement is such a bogus idea. Most of us will work until we die and we know it. Seriously – use your advertising to raise awareness about your education programs, your unique employee and customer guides that will help us navigate through the complex world of personal finance. Your programs to help us manage finance wherever we are in the dreaded “cycle.”
Banks and financial institutions need to walk a different walk. No more marketing as usual. The bank that embraces a smart use of social media and digital marketing will start to get trust because “they earn it” – for real.

Survival Of The Most Experienced

In the wake of the recent turmoil in Moneyland, the financial institutions that have managed to survive (till now) are running print ads to tell people how long they have been around. Franklin Templeton is gloating about 165 years of experience, Wachovia Securities are talking about their 120 years in the business. Wachovia spokeswoman Mary Beth Navarro says, “The message is that we’re strong and stable and here to serve customers at a very volatile time”. Sure, so what are the others, who may not have so much of experience at hand doing? Capitol Federal Savings, a bank in the Midwest, ran a 10-second spot on Wednesday that said, “One bank has weathered the storm, standing strong and secure. Giving you security and safety when you need it the most.” Comerica Bank in Texas has run ads carrying a headline that reads “Commitment,” and tagline: “We’re in this together.” Read more here.

The Financial Crisis, As Newspapers Saw It

Mario Garcia is one of the world’s most experienced newpaper designers. And he writes a pretty good blog.  He looked at the recent upheavals in the financial markets as a designer would and posted and illustrative piece on the on the crisis and how newspapers around the world are reporting it. How, for instance The Washington Post thought that one picture did not tell the whole story, and therefore made an organized collage of several pictures, telling the story from as many perspectives as possible. The Guardian, for instance, used what Mario has termed as The Photo Attack – putting one solid image which the editor felt will tell the story in 10 seconds flat. There are more interesting examples that Mario cites, like the one in the Orlando Sentinel with “The over the logo teaser” and “The type attack over illustration” used by Newsday.

Kiva Counterpart In India

Much has always been spoken about how Kiva loans are changing the lives of millions of lenders and borrowers. The working poor, with the help of microfinance services like Kiva are setting out to enhance their living conditions through different entrepreneurial ventures. Whether the money is used to start a small shop, or to buy a cow, microfinance is increasingly becoming as option to the poor as opposed to ruthless interest rates from local money lenders. And the latest country to get a new lease of microfinance is India. A similar site to Kiva, Rang De allows people to become “Social Investors”, choose borrowers and offer them loans starting from as low as Rs. 1000. Loans are disbursed within 30 days and a 3.5% interest can be earned at the end of the tenure. Unlike profit-oriented sites like Zopa, where the lender’s money is split across various borrowers to reduce risk and both lender and borrower are charged a fee each for servicing and transaction respectively, Rang De is a social initiative. So what are the chances of Rang De taking off as well as Kiva? Quite a few, we think, especially with the younger generation. In a country like India, where social disparity is at its peak, individuals could quite easily pool in a minimum of Rs.1000 to help out in what is primarily a social initiative. The fact that there is a return attached to it, is just an add-on.

McDonalds Updates

PSFK reports of a change over at McDees, it’s the interiors, not the food, apparently. London based design house SHH have banished the traditional plastic furniture in favor of a look that is straight out of a top draw design magazine. Read more.

Nokia Jumps Onto The Adnetwork Bandwagon

Earlier this year Nokia created a platform that brought together content creators and service providers to create an ad and content network that could rival the biggest names. The world’s biggest cellphone maker entered the market when it bought U.S. mobile advertising firm Enpocket last year.

New publishing members of the network include the International Herald Tribune Europe, Agence France-Presse France and RTL Mobile Germany, Nokia said. Existing members include Reuters and Cosmopolitan.

The mobile and advertising industries are currently working out how best to exploit a market that research firm Gartner estimates will be worth more than $12 billion by 2011.

Read more from Reuters here and on the Nokia site here.

Social Networking Trumps Porn

A new survey by Bill Trancer at Hitwise revealed that people are more interested in social networking sites than online pornography.

Mr Tancer, a self-confessed ‘data geek’ who analysed the search habits of more than 10 million web users, said that internet searches provide an up-to-date view of how society is changing.

A decade ago, porn-related searches accounted for 20 per cent of all internet searches made, he noted. They now account for about 10 per cent, said Mr Tancer, who also found that web users aged between 18 and 24 were searching for less porn.

“My theory is that young users spend so much time on social networks that they don’t have time to look at adult sites,” he said. Read more from Telegraph UK.

Empowering Others To Achieve The Extraordinary. The Method At Pixar.

Pixar cofounder and President Ed Catmull exemplifies the greatest form of leadership: empowering others to achieve the extraordinary.

Harvard Business Review in its October issue carries a story of Pixar in which they try to unravel the architecture of Pixar’s collective genius–a community where people at all levels support one another.

Managing by giving up power. Steve Prokesch, who writes the story discovers that Ed and his fellow executives give directors tremendous authority. Senior management sets budgetary and timeline boundaries for a production and then leave the director and his team alone.

The rule is that all opinions are only advice that the director of the movie in question can use as he or she sees fit. Catmull, chief creative officer John Lasseter, and executive vice president of production Jim Morris often attend these sessions but insist that their views be treated the same way and refuse to let directors turn them into decision-makers.

Even when a director runs into deep trouble, Ed and the other executives refrain from personally taking control of the creative process. Instead, they might add someone to the team whom they think might help the director out of his bind. If nothing works, they’ll change directors rather than fashion solutions themselves.

Fighting the formula. Success like the one that Pixar has actieved could make any other organization create a formula and stop it from trying to improve. Not here, though. Catmull is determined that Pixar will be different. Toward that end, he personally ensures that post mortems of productions are taken seriously. And he regularly reminds employees–especially young new hires–that Pixar has made plenty of mistakes in the past and still doesn’t have it all figured out.

Scroll down into the comments section. Ed Catmull chips in too. Link.

Mobile Wallet Tests A Success

Yes, people are lazy and would like it if things are made more convenient for them. If we didn’t know that already, mobile company O2 has recently uncovered this truth and brought it out in the open – again. Six months ago O2 began a trial of Near Field Communications (NFC), embedding an RFID chip into a Nokia 6131 and handing them out to 500 London-based customers. This O2 Wallet allowed users to use the phone as an Oyster Card (hence the London focus) and as a contactless payment card like the Barclaycard Visa Paywave, as well as a few other applications. The trial recently wrapped up and the feedback has been tallied, with the experiment proving a resounding success according to O2, with nine out of ten trialists saying they were happy using NFC technology on a mobile phone. Not before long, the technology will be spread beyond travel to other sectors too. So, how soon will people be moving around with wallets? Probably in less than a decade, we’d say. Coincidently, by the time the cheques are slated to go too.

Plastic Extinct Too?

Like cheques, plastic money could also be well on their way out. Shocked? So were we, till we found out that this statement came from a well-informed source -the Barclaycard CEO Antony Jenkins. Jenkins, who launched UK’s first ever credit card way back in 1966 talks about how contactless payment technology has tremendous capability, which will only be enhanced if the plastic around it is taken off. Barclaycard launched its combined contactless Oyster travel and debit card, OnePulse, in London last September. By the end of the year it will have issued over one million contactless cards, with thousands of retailers accepting them. But Barclaycard is already looking beyond cards and is reported to be investing a seven-figure sum in contactless payment technology. Last year the company teamed with phone network O2, Transport for London, Nokia, Visa and TranSys, the consortium which currently runs the Oyster card system, on a six month trial of NFC (Near Field Communications, more of which is in the next article) mobile payments. The pilot concluded earlier this month, with nine out of ten participants saying they were happy using NFC technology on a mobile phone and 78% saying they would be interested in using contactless services if available. Read more on this here.