Stand alone

Differentiating yourself in a competitive, regulated market has never been more important. Or harder.

📸 First, flashback to last week when we examined the troubles at Goldman Sachs. Yesterday in the FT, William Cohan published his ideas on what David Solomon and his team should do about it (spoiler: it involves buying BNY Mellon.)

👉🏻 Now, read on to learn why:

① Differentiation remains the most powerful thing your marketing can achieve.

② You should be thinking in terms of client needs, not your features.

③ After leading the world in open banking, the UK is now being left behind.

④ The hurdle for new financial firms is rarely technical and often regulatory.

⑤ LinkedIn is, far and away, the best social medium for B2B marketing.

⑥ Brits should value good management as much as Americans and Germans do.

⑦ Consistency is key if you care about culture.

What's new

The FCA announced this week that it is targeting bloggers and tech groups, after a surge in misleading product promotions, the FT reports.

Source: The Financial Times, 3 February 2023

In short:

“The Financial Conduct Authority said on Friday that it had required companies to amend or remove 8,252 promotions in 2022 — 14 times more than the year before — and published over 1,800 alerts to prevent consumers losing money to scams."
“Noting an increase in bloggers and influencers on sites such as Instagram, Facebook and YouTube promoting investment products to younger people, the watchdog said ‘more needs to be done by tech companies to protect consumers’. The watchdog warned that unauthorised ‘fin-fluencers’ — influencers who publicise content on financial matters — also needed to think carefully before promoting products, and to be clear about their obligations when advertising through their social media channels to avoid breaking the law.”
“The FCA has no powers to force sites to be taken down. Instead, it has to ask the platform hosting harmful content to remove it.”

Why it matters

Although this story raises some vexing questions about the UK’s financial regulator lack of bite (Why doesn’t it have the power to compel social media to remove illegal ads? Why does it have to resort to ‘asking’ those who break the rules to reconsider?), it matters to us today because it highlights the challenges financial services firms face in promoting themselves.

① At a time then the majority of adults believe that regulated advice is for the wealthy and active fund managers are finding it ever harder to justify their fees, financial services marketers should be more focused than ever on differentiating themselves by conveying their unique value.

The FCA’s actions this week remind us that relying on tactics which are commonplace in other sectors is out of bounds to the financial sector. Influencer marketing is fraught with danger and making any claim - particularly one related to performance or returns - that can’t be substantiated with facts is going to end in tears.

What to do about it

Take action

② How do you differentiate in such a competitive and highly regulated market? I have three suggestions for you:

Move from need not feature: It’s easy to get stuck thinking in terms of what you offer clients (investment performance, global coverage, online services) but the savvy marketer starts from the client’s perspective: what is it that they need to achieve and how else could they achieve it?
Think broadly: Although you might expect investment performance to be what most clients need, that’s not how they would necessarily express it. They need peace of mind, they need to be in a position to help their children get on the property ladder, they need to banish worry about ill-health later in life. Do clients need a best-in-class mobile app? I don’t think so, but some do need the flexibility to manage their money any time, any place. Do clients need active fund management? Perhaps what they really need is a feeling of protection during times of extreme market volatility.
Double down on unmet needs: Once you understand client needs, you’re able to differentiate yourself by identifying the needs that your competitors are not addressing and figuring out exactly who is not being catered to. It’s then a matter of doubling down on those unmet needs, being unashamedly the company that caters to those people.

True differentiation lies in being the only business meeting specific needs of a specific segment of clients.

Get help

Visit InMarketing, my resource library for leaders in finance or technology who want to innovate, interact and influence.
Join the InMarketing community, either on Twitter or on Substack (you’ll need to download the Substack app and head to the chat tab). Either way, you can ask questions of me and fellow senior marketing practitioners.

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Top stories

The other articles that are worthy of your time.

FINANCE

Crosswell hands in open banking report

③ After leading the world in open banking, the UK is now being left behind.

Charlotte Crosswell. Source: LinkedIn, 4 February 2023

“As she signs off as trustee of the Open Banking Implementation Entity, Charlotte Crosswell has hit out at the lack of long-term vision to move beyond the current environment to a ‘Smart Data’ economy.”
“In her end of implementation roadmap summery report, Crosswell notes that while Open Banking has demonstrated its effectiveness, it is still only used by three in 20 digitally active UK adults and that Account Information Services users has stalled.”
“Writes Crosswell: ‘One of the impediments to progress has been the absence of clear cross-department vison for developing the UK into a Smart Data economy, where people and businesses have rights to access their data, wherever it may be held, and benefit from a wide range of new choices and innovations’.”

TECHNOLOGY

Elon Musk pushes forward with Twitter payments vision

④ The hurdle for new financial firms is rarely technical and often regulatory.

Source: The Financial Times, 30 January 2023

“Twitter has begun applying for regulatory licences across the US and designing the software required to introduce payments across the social media platform. […] Musk has said he wants Twitter to offer fintech services such as peer-to-peer transactions, savings accounts and debit cards, as part of a master plan to launch an ‘everything app’ that incorporates messaging, payments and commerce. In 1999, Musk co-founded X, one of the first online banks, which later became part of payments giant PayPal.”
“Musk has said he wants the system to be fiat, first and foremost, but built so that crypto functionality could potentially be added at a later point. In an early pitch deck to investors, Musk said he aimed for Twitter to bring in about $1.3bn in payments revenues by 2028. […] Hundreds of thousands of Twitter users share links to third-party payments options either in their tweets or on their account.”
“Twitter will face high levels of regulatory scrutiny. The move into payments comes after Musk has culled more than half of the platform’s employees, which has raised fears that its compliance staffing is insufficient. Businesses involved in money transfers, currency exchange or cashing cheques are required to alert unusual activity to authorities.”

MEDIA & MARKETING

Bankers should be active on LinkedIn

⑤ LinkedIn is, far and away, the best social medium for B2B marketing.

“Many financial institutions continue to lump LinkedIn in with social media networks like Facebook, Instagram and TikTok. LinkedIn is far and away different from the rest. But misperceptions have prompted some financial institutions to prohibit associates from accessing LinkedIn on their office computers.”
“Yet LinkedIn has proven to be a major contributor to bottom-line results:
- 78% of businesses that engage in social selling outperform those that don’t.
- Sales professionals who use social selling earn up to 50% more new business than those who don’t.
- 61% of organizations engaged in social selling report revenue growth.”
“I know a banker who ends every pipeline meeting with ‘10 minutes of LinkedIn.’ His team reviews successes and challenges, best practices, and other ideas to help the team win. This brief LinkedIn discussion is helping those bankers excel — their ratio of connection requests to connection acceptance is 80% and they get appointments with 50% of those connections.”

WILDCARD

For Britain to grow faster it needs better managers

⑥ Brits should value good management as much as Americans and Germans do.

“Well-managed firms tend to score highly on a host of metrics. They are likely to be more productive and profitable, to export more and to see their output grow more quickly. They also provide their employees with a better work-life balance. […] The correlation between a high management score and productivity is so strong that management seems to account for more of the difference between the most and least productive firms within countries than factors like research and development spending or use of IT. More than half of the productivity gap between Britain and America can be attributed to poor management.”
“One of the best predictors of good management is that a firm is exposed to strong competition in its product market. It was a lack of this competition that led to the poor management of businesses during Britain’s post-war industrial decline. By reducing the amount of competition British firms face, therefore, Brexit-induced restrictions risk impeding improvements to how well they are run. The better news is that Britain has maintained a fairly relaxed attitude to foreign ownership in recent years.”
“As well as laughing at their managers, then, Britons should also acknowledge their importance. Characters who incrementally reduce a factory’s waste, raise employee retention and chivvy their teams to achieve greater productivity would make for less entertaining TV than David Brent. But to get out of its growth rut, Britain needs more of them.”

Off cuts

The stories that almost made this week’s newsletter.

The last word

⑦ Leda Glyptis, chief client officer at 10x Banking - whose new book Bankers Like Us launched this week - on culture change:

Leda Glyptis. Source: FS Partnership, 31 January 2023

“If we’re talking about cultural change, we must approach it thinking that everything matters. Nothing is too small. Consistency is key.”

Don’t settle for marketing.

Strive for InMarketing: innovate, interact, influence.

Wishing you a productive week,

P.S. Apple TV+’s Shrinking premiered this week and it’s rather wonderful. I think this Harrison Ford guy could be a big star some day.