Dotty over data

Transparency turns to trust.

Read on to learn why:

① Customers want to benefit from use of their data.

② Communication, personalisation and productisation should inform data use.

③ Avoiding failure is as valuable as achieving success.

④ Digital financial markets need an industry-owned platform.

⑤ SEO ‘hacks’ never work for long.

⑥ Return-to-work mandates have become a tug-of-war.

⑦ Some form of UK-EU rapprochement is inevitable.

📸 But first, flashback to October when I told you that a distinctive brand asset is invaluable and should be rejuvenated, never jettisoned. This week it became apparent that Jaguar didn’t get the memo - unlike the New York Times and The Verge, both of whom certainly read last week’s issue of IMTW.

What's new

Banks are sitting on a treasure trove of our personal data, the FT reports.

Source: The Financial Times, 22 November 2024

In short:

“While more conservative banks devote resources to ‘indirectly monetise’ their customers’ information by offering them better-suited offers and products, the boldest disrupters — fintechs such as Revolut, Klarna and PayPal, as well as the US bank Chase — are experimenting with selling anonymised data to advertisers.”
“Some fintech executives have stated that a more integrated use of customer data could shift their business model. […] Zilch, a UK fintech, has built its business model on this premise. The company, which is backed by eBay and Goldman Sachs and has about 4mn customers, makes money from targeted advertising based on its transaction data which it uses to subsidise the cost of credit for consumers with zero-interest loans.”
“Lloyds Banking Group sees the monetisation of its 26mn customers’ financial data as an area of growth. The retail bank launched a ‘customer insights’ team in 2022 that has grown to 40 employees. Lucy Stoddart, managing director of Lloyds’ global transaction solutions, said one example of this was analysing aggregated and anonymised customer data around shopping habits to provide insights to commercial real estate landlords and help them make better-informed strategic decisions.”

Why it matters

This week’s story takes us back to April when Revolut announced it planned to sell advertising space on its app to brands and could become a true media and advertising business in the future. I said to you then that it was hard to think of a more misguided strategic move from Revolut. My thinking on Revolut hasn’t changed but there’s more to consider here.

“Information about money has become almost as important as money itself” - former Citibank chief executive Walter Wriston in 1984

Financial services firms face a dilemma. They have access to personal data that could be leveraged not just to improve their top line but, I’d suggest more usefully, to build stronger relationships with their customers because this data can and should be used to develop a better product and offer better personalisation. The question then is how and when to seize the opportunity.

① The key to doing that lies in transparency - because customers are usually comfortable with their data being used as long as they understand how and why it is being used and - this part is critical - that they benefit from it in some way. After all, that’s the cornerstone of open banking.

What to do about it

Take action

② I’d like to think that, as a regular IMTW reader, you’re classier than Revolut, that your plan isn’t to use personal data to sell your customers’ eyeballs to advertisers. But, whether you are or not, here are some considerations for you:

Communication: Customers aren’t as precious about their personal data as you might believe. What they abhor is companies not being clear about how and why their data is being used. Explain how use of their data is going to benefit them.
Personalisation: Smart use of customer data isn’t just about addressing them correctly in correspondence. Take personalisation to the next level. Think about how what you know about your customers can influence how you market to them: the offers you send them, the topics you talk to them about.
Productisation: How can you make your product better (not worse, like Revolut) by using insights from customer data? Are your customers traveling a lot? Time to add some bespoke travel insurance to your account offering. Are they buying a lot of petrol? Time to bring that car insurance add-on to market.

Get help

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Top stories

The other articles that are worthy of your time.

FINANCE

Sergio Ermotti honoured as Banker of the Year

③ Avoiding failure is as valuable as achieving success.

Sergio Ermotti. Source: Finews, 19 November 2024

“While in Switzerland the public debate surrounding UBS is mainly about its size, the upcoming job cuts and the possible tighter restrictions on equity, in Germany its boss has received a prestigious award.
“UBS CEO Sergio Ermotti was named European Banker of the Year at the Euro Finance Week in Frankfurt. His integration achievements were praised as one of his outstanding qualities.”
“RTL/NTV business correspondent Ulrich Reitz also justified the choice. Sergio Ermotti had taken over and integrated the ailing competitor Credit Suisse quickly and seamlessly, what prevented a banking crisis.”

TECHNOLOGY

Goldman readies plan to spin off digital-assets platform

④ Digital financial markets need an industry-owned platform for issuance, trading and settlement.

Source: American Banker, 18 November 2024

“Goldman Sachs is speaking with potential partners as it plans to spin off its digital-assets platform into a new company for large financial firms to create, trade and settle financial instruments via blockchain technology. Plans for the new company are in the early stages, but the long-term goal is to execute the spinoff within the next 12 to 18 months.”
“Electronic trading platform Tradeweb Markets said that it would work with Goldman to bring new commercial use cases to the digital-assets platform, becoming its first strategic partner. Goldman's plans come as large financial institutions and governments try to use the technology underpinning cryptocurrencies to issue, trade and settle traditional assets such as cash or bonds faster and more efficiently.”
“Wall Street's blockchain efforts have been ongoing for around a decade, and while some applications are now live, few have reached significant scale. In part that's because companies are reluctant to get involved in systems created by their competitors. JPMorgan Chase & Co. began a similar effort similar to Goldman's in 2022 called Onyx. It recently renamed the platform as Kinexys, saying it's ‘poised to accelerate the adoption of blockchain technology and tokenisation into mainstream financial services’."

MEDIA & MARKETING

Google is further cracking down on sites publishing ‘parasite SEO’ content

⑤ SEO ‘hacks’ never work for long.

“Google is tightening its rules against ‘parasite SEO’ content, or articles and pages that often have little to do with the site’s focus but that exploit the website’s Google ranking.”
“An example of parasite SEO content is a news blog that publishes online shopping coupon codes in a hidden part of its website or an educational site publishing unrelated affiliate marketing content. In March, Google announced it would crack down on this kind of ‘site reputation abuse,’ and now it’s making it clear that it doesn’t matter if the publisher created the content themselves or outsourced it — it’s a search policy violation regardless.”
“Site reputation abuse takes many forms, and more than a few publishers have had to explain to the public why there’s spammy garbage on their otherwise reputable sites; a common defence has been that they themselves didn’t produce it.”

WILDCARD

Staff at a British bank are quitting their ‘grey corporate hellscape’

⑥ Return-to-work mandates have become a tug-of-war between employees resisting the shift and bosses insisting it’s the cure-all for collaboration, productivity, and office culture.

Raman Bhatia, CEO, Starling Bank. Source: Fortune, 20 November 2024

“Starling Bank touts itself as Britain’s first-ever online-only bank. But the company’s U-turn on its hybrid work policy, ordering staffers back to offices, and without having enough space to accommodate them, has prompted a wave of resignations.”
“The London-based bank is ordering its hybrid workers, who spend only a handful of days in the office each month at best, to come in at least 10 working days each month. The only problem? Starling Bank’s offices in London, Cardiff, and Southampton don’t have enough space for the mandate to work. With over 3,000 workers, Starling has just about 900 desks in all its locations.”
“The mandate, which seemed to aim to force people out of work-from-home setups, received instant backlash. A few staff members have reportedly already resigned, while others are griping about CEO Raman Bhatia’s move on work Slack channels.”

Off cuts

The stories that almost made this week’s newsletter.

The last word

⑦ Janan Ganesh on how Britain squandered the best hand in the world:

Janesh Ganesh. Source: The Financial Times, 20 November 2024

“Britain is an inescapably European country, in its per capita income, in its sovereign borrowing power, in its lack of natural resources and, above all, in its expectations of the state.”

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Wishing you a productive week,

P.S. When you’re next in Brussels, I recommend Au Grand Forestier. An elegant local brasserie with reliable food and genuinely friendly service.