Being sociable

Leaders in finance and technology should embrace social media with gusto.

Read on to learn why:

① A large, devoted social media following is one of your most powerful weapons.

② Social media programmes demand permission, content and framework.

③ In our digital age, there’s still huge value in physical, experiential marketing.

④ Big banks all want in to fintech but are adopting different entrance strategies.

⑤ AI is now delivering tangible cost reductions for marketing functions.

⑥ HR desperately needs sound communications expertise but rarely has it.

⑦ Communications can save you or damn you.

📸 But first, flashback to last week when I suggested that neobanks’ lasting impact was in getting the established banks to improve their offerings. Right on cue, this week Lloyds launched free debit card use abroad and NatWest announced a euro travel account. Want to know what the oldies will be doing in five years’ time? Keep on eye on what Monzo is doing today.

What's new

The New York Times speculated this week whether Bill Ackman’s soaring profile on social media could help him grow Pershing Square, his financial empire.

Bill Ackman. Source: The New York Times, 4 June 2024

In short:

“Ackman rose to fame as an activist investor who profited by shaking up companies, a strategy that made lots of money — but also lost a lot. He now focuses more on a few concentrated bets. That approach has paid off, with a 26 percent return last year. Ackman’s firm also has a big advantage over rivals: Its publicly listed fund, which trades in Amsterdam and London, has permanent capital, where those who buy in can cash out only if someone buys their stake.”
“Pershing Square’s stock has also risen as Ackman has grown more outspoken on social media, especially after he criticised Harvard’s efforts to combat antisemitism following the Oct. 7 Hamas-led attacks on Israel. He has also publicly criticised diversity initiatives and President Biden. Wall Street has speculated that Ackman’s more outspoken social media presence is aimed at courting retail investors. If so, the strategy appears to be working: Amsterdam-traded shares in the fund are up 44 percent over the past seven months.”
“Will his followers flock to his future growth initiatives? Pershing Square is expected to open a closed-end fund in the U.S. this summer — which Bloomberg reports could reach $25 billion. Like the European fund, it would be open to retail investors. If those plans come to fruition, Pershing Square would manage at least $45 billion, catapulting it into the top 10 biggest U.S. hedge funds by assets.”

Why it matters

The best advice used to be to build your network (you’ve heard ‘your network is your net worth’, right?) and that holds true but the NYT’s reporting on Ackman matters because it illustrates how that principle has evolved in the age of social media. To steal from James Clear (again - see The Last Word below too),

“Who knows you is more important than who you know. Build a brand.”

① Many of us - particularly Brits, particularly those of us working in the more conservative realm of finance - feel a natural discomfort at the notion of a ‘personal brand’. Promoting ourselves in public feels a little grubby. But the evidence is overwhelming: a large, devoted social media following is now one of the most powerful weapons in any leader’s arsenal. Just ask Elon Musk - he famously has never spent a dime on advertising Tesla and goes without communications, PR or marketing teams. Instead he is so convinced of the power of a social media presence that he spent $44 billion buying Twitter.

Another adage you’ve heard me parrot before is that people buy people. And nowhere is that more evident than on social media. Of course, your brand needs a social media presence but the real magic happens when your leadership team is comfortable representing the company from their own accounts and with their own perspectives.

What to do about it

Take action

I’m going to repeat myself. Your marketing team doesn’t need to actually ‘do’ all your social media but it should certainly be your firm’s centre of excellence on the topic, enlisting and empowering your senior leaders to help.

② Do they have what they need? It comes down to three things:

Permission: Step 1 is saying it’s okay. Your social media policy needs to be clear and enabling. I am always surprised by how many firms still have blanket bans - because it’s so much easier to say ‘no’ than to explain ‘how to’. What a waste when every single one of your employees is a potential advocate. Authenticity is essential so your employees need to feel empowered but you shouldn’t aim to coordinate too much, let alone dictate how they should share.
Content: Ensure your Marketing team has made your messages succinct and crystal clear to your own employees. They need to understand what you stand for before they’ll want to share it with their networks so internal communications is important. Marketing should then be producing high-quality content that your employees will want to share - whether because it’s creative, funny or (my favoured approach) it is genuinely valuable.
Framework: Your staff should be led by example but also with a framework of support and training for those that need it. Their level of familiarity and therefore comfort will vary enormously. Some will need guidance with the basics, others will simply want to know what to share and where to find it.

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Top stories

The other articles that are worthy of your time.

FINANCE

LSE chief pushes for big screen outside HQ to champion market successes

③ In our digital age, there’s still huge value in physical, experiential marketing.

Source: The Financial Times, 6 June 2024

“The London Stock Exchange wants to erect a screen outside its Square Mile headquarters to showcase the market’s success stories and combat pessimism over its future. The plan is the latest by Julia Hoggett, LSE chief executive, to revive the fortunes of a market hit particularly hard by the global dearth of initial public offerings in recent years. […] Despite equities trading having almost entirely gone electronic, the ability to promote a company’s IPO in a physical form to the outside world remains part of the armoury of stock exchanges including Nasdaq and the New York Stock Exchange.”
“New York’s Nasdaq uses its seven-storey billboard in Times Square to show opening and closing ceremonies as well as to promote other milestone moments for clients. Similarly, the New York Stock Exchange, its downtown rival, hangs giant banners over the neoclassical facade of its 121-year-old building, while inside new listings are often invited to ring the market’s opening bell over its trading floor.
“Stock exchanges without suitable outside space have resorted to other forms of photo opportunity: new listings in Hong Kong get to bang an opening gong — the size of which typically depends on the importance of the IPO.”

TECHNOLOGY

Inside UK banks’ arms race against fintech start-ups

④ Big banks all want in to fintech but are adopting different entrance strategies.

Software licencing: “Bankers are paying close attention to Starling’s software-as-a-service unit, Engine, the first major push into the space by a UK lender and its route to international expansion. […] Engine faces a competitive scene. Cloud banking fintech Thought Machine, valued at $2.7bn (£2.1bn) in 2022, has landed deals with big players like Lloyds, Standard Chartered, JPMorgan and Morgan Stanley. Other rivals include Mambu and 10x Banking. The latter’s head, Antony Jenkins, who was CEO of Barclays from 2012 to 2015, said the next decade of banking was ‘all about how you can harness technology to meet your customers’ needs, particularly in areas like artificial intelligence’.”
Payments and FX: “Europe’s biggest lender HSBC also offers embedded banking products and announced a partnership with California-based payments fintech Tradeshift last August to develop financial services apps.
It now competes directly with Wise and Revolut through Zing, an international payments app it launched in January. These businesses tend to operate as ring-fenced entities. A senior banker at HSBC said this was standard practice when dealing with ‘risky’ entrances into new markets.”
Embedded finance: “Banking-as-a-service is a model allowing large corporate clients to offer financial services under their bank’s licence. […] The UK’s BaaS market offers an estimated revenue opportunity of around £5.5bn. Embedded finance could unlock four to seven per cent incremental revenue growth for retailers. Boxed’s CEO, Andrew Ellis, said it would become a ‘material part’ of Natwest’s financial services revenue pool, with products like BaaS a method of ‘future-proofing’ a bank’s business.”

MEDIA & MARKETING

Klarna delights in AI cutting 40% of its marketing spend

⑤ AI is now delivering tangible cost reductions for marketing functions.

“Klarna announced Tuesday that it had cut sales and marketing spending by 11% in the first quarter of 2024 while increasing the number of campaigns and updating its collateral marketing materials more frequently. It attributed 37% of that reduction to AI, the equivalent of $10 million in annual savings. Klarna also said it had decreased by 25% its spending on external marketing suppliers for tasks such as social media, translation and production.”
“Klarna's management team were clearly early adopters, [that’s the first theme]. The second important theme was these big spending cuts on marketing. Earlier this month a new Gartner survey of 400 US CMOs showed marketing budgets as a share of revenue have fallen to a low of 7.7% in 2024, a stark drop from the pre-pandemic average of 11%.”
“The third important theme was that, while agency costs declined, paid media did not. Sandstrom agreed - they still need media for distribution.”

WILDCARD

PwC asks for silence from departing staff in programme of UK job cuts

⑥ HR desperately needs communications expertise but rarely has it.

Source: The Financial Times, 7 June 2024

“PwC has launched a new voluntary severance programme across multiple UK offices in recent weeks, but has not made any official announcements internally about the move. Staff who have been offered a package to leave have been notified individually.”
“They have been told they must not tell other staff if they accept the offer and to follow a script provided by HR if they want to send leaving notes to colleagues. In guidance sent to affected employees, PwC said: ‘Should you decide to accept this voluntary offer, it is possible for you to send out a note to a defined group, however this must not refer to the voluntary severance offer or the circumstances of leaving (suggested wording for this note is given below but we recognise that you will naturally want to personalise this). Naturally, it must also not be derogatory to PwC or its employees/partners. It is down to business discretion as to when this message can be sent out and if the business wishes to review messages before they are sent out’.”
“The guidance continues: ‘The content of your comms should follow this approach . . . ‘Following recent discussions with my [relationship leader], I have taken the decision to leave PwC. It hasn’t been an easy decision for me to reach but now that I have, I am excited about what the future holds for me and the new opportunities on the horizon. I have really enjoyed my time at PwC and the opportunity to work with such talented colleagues.’”

The Artificial Intelligence Spotlight 🔦

Asana introduces ‘AI teammates’ designed to work alongside human employees

IdeaApe: Develop a brand that meets people's needs.

Nowadays: Corporate event planner that takes away the hassles of organising while factoring in your company’s unique tastes and needs.

Typedream: Build your websites without writing any code from just one AI prompt.

More AI 'bots

Off cuts

The stories that almost made this week’s newsletter.

The last word

⑦ James Clear on the value of good communications:

James Clear. Source: jamesclear.com, 8 June 2024

“It's remarkable how often the real problem is not what happened, but how it was communicated.”

Don’t settle for marketing.

Strive for InMarketing.

Wishing you a productive week,