Revelations

The revelations (if that’s what they are) today concerning the chaos within the Bank of England during the first moments of the Banking crisis in 2007 are perhaps a surprise to no one. To be fair what occurred was unprecedented and the pace of the unravelling crisis such that to we can sympathise with those charged with protecting the Nation from a full on meltdown.

However, personally, reading the detail, I can’t stop myself from imagining a board room full of clubby, old school tie types, used to going through the motions, suddenly and rudely shaken out of their stupor totally unsuited to making quick precise and impactful decisions. For goodness sake they call themselves “THE COURT” of Directors which can do nothing but enforce the image. This, I accept, is possibly, probably, a totally unfair description, and…,

The minutes of the meetings have been made public but I offer an alternative extract of the conversations imagined of course the participants made up.

Mr Tristan Rodgers-Newbouys “Chair can I express my heartfelt congratulations and have minuted my pride and privilege to being part of the Court Board that has dealt so successfully with the crisis brought about by Northern Rock”

The remaining Court Board “Here here”

Chairman “Um, yes, thank you, but that maybe a little premature”

Rodgers-Newbouys “How so Chair, did we not send money up there to settle the natives down”

Chairman “Yes, well it seems that it has not worked out quite as we expected, the customers and markets remain unconvinced”

Rodgers-Newbouys “There’s gratitude for you, bugger, I suppose we shall need to send them more cash”

Chairman “That is possibly not going to work either and there are other institutions coming under similar pressure Bradford and Bingley and possibly the Abbey, for example”

Rodgers-Newbouys “Bloddy Northerners wouldn’t happen in the City, will we have to fork out for them too”

Chairman “We might have to be a little more subtle than that and there is a possibility of it going Global signalling a meltdown of the financial markets”

Nigel Portly-Girth “Are the FCA fully aware and involved?”

Chairman “They are on holiday”

Rodgers-Newbouys “Full blown crisis then, old boy”

Chairman “Worst in 300 years”

Nigel Portly-Girth “Gad, hey ho, Chair can I just mention we have overrun by half an hour and I have a very good vintage whisky waiting for me at my Club can I suggest we adjourn until tomorrow, can’t get any worse anyway”

“Here here”

Putting it Simply

The RBS Chief said this week that “banks should stop producing products that you need a PHD in Maths to understand” It is a sentiment I wholeheartedly agree with, and, (call me a cynic) can’t really see changing in the near future.

I am sure he is just referring to Investment and Insurance Products! (the irritating exclamation mark is there for a purpose to be revealed later), however, banks specialise in making most all of their offers unreasonably complicated, compounded with each reiteration.

In essence banking has changed little since Adam was a boy, innovation in banking generally means a change to the pricing structure, the sad thing is this still does not always lead to any sort of competition, generally it is just repackaging. Occasionally, there is a maverick who strikes out to disrupt the market like egg for example, in cards and savings, but these are usually for a brief interlude and the status quo promptly returns.

It suits Bankers for banking to be seen as a “black art” something that only the few are privy to understanding, we “Mugguls” do not possess the hidden powers to begin to deal with such dark forces as money releases. This is just total Hogwash (not just thrown together this you know) customer needs have been shoehorned into an existing banking solutions when in reality needs relating money are far less complicated than they would have you believe.

Now back to the exclamation mark, the first thing to accept is that fundamentally banks do facilities not products. The Oxford English Dictionary defines to facilitate as – “make something easy or easier” where a product is defined as “an article or substance manufactured for sale”. To me this is just not a matter of syntax it is a philosophy. Customers do not buy banking products because they offer something in themselves, they buy them because they give them access to what they really want, a service provider not a manufacturer of goods. In some respects (I know I have said this before) managing your money gets in the way of stuff you really want to do. Realising this is a first step to providing simple, easy to use and relevant offers to busy customers with something better to do then constantly engage with their bank.

So, with simplification in mind this is my list of customer financial needs.

1. A secure means of  depositing readily available cash; by degrees better than stashing under the bed but at least as accessible.

2. A way of paying for things; not barter but something of measured/accepted value that I can exchange for things I desire.

3.  If I  don’t pay for things straight away and the cash I deposit is left unused for any length of time I would like some consideration in value for that.

4.  If I have a considerable lump sum that I don’t need straight away it would be good if I had somewhere to put it somewhere that pays me  a return that makes it worthwhile for me not to spend it on some tangible goods that may or may not add in value

5. I would like to buy a house now although I don’t have the amount of funds available to pay for it in full

6. A means of financing my current consumption from future funds.  I need these things now if I wait it will be too late.

7. A way protecting my assets from malicious intent or from unfortunate events.

8. A  way of understanding all my financial circumstances, obligations and consequences, easily, speedily, simply and in one place.

In a nutshell I need security access and a means to pay for stuff.  All we need now is some creative person to design the facilities that enable people to get on with their lives in the knowledge that their financial needs are taken care of, and can buy the products they need and desire.

 

 

Branching Out

Lloyd’s Bank have signalled a significant shift (hello again by the way, been a while) in the mainstream retail bank’s approach to branches.  Actually, they are just recognising what has been slapping them around their face now for several years; the need to understand the role the branch plays in the, techno savvy, digital and social media world that we all now live in.

The demise of the branch has not been an overnight phenomenon (nothing ever is)  I have been , for the last 15 years at least plugging generally available statistics that give a strong clue to what was happening, such as those that say on average customers visit their bank branch just 2 times per year. The significance of such research seems to have passed banks by or more likely arrogantly been ignored.

What concerns me now is the consequences of them coming late to the party and  the seat of the pants strategy that may result (the cliches just keep on coming!).  Already massive job losses at Lloyds, 300 branches to close over a relatively short period.  I wonder at the criteria that has been applied, is it based on the old world or will the remaining branches be part of a channel strategy that embraces and engages with digital.  My guess is that it is the former and that there will be more closures to come because of the lack of insight into what a modern physical presence strategy should look like.

With a bit of foresight there should have been a transition period taking both the bank, its’s staff and customers on a relatively pain free journey that brought with it  understanding to exploit the needs and opportunities as they evolve through the technical advances and changing customer circumstances.

Banks have always been slow to react, working in silos that have their own agendas, meaning a lack of coherence and integration.  It reminds me of the time when Midland Bank invested millions in new Cheque Processing Centres whilst at the same time participating and being strong advocates for, SWITCH  (the first UK Debt Card) the stated intention being to replace cheques, the conflict was stark.

The point I am making is; I wonder how many expensive projects have been commissioned that are now looking a bit sick because they have no place in the new world and at the cost of how many peoples jobs?  For example, the cost of making people redundant set against even the longterm savings of outsourcing functions abroad (not to mention customer service  issues which is another high horse altogether) .

The innovations in payment functionality has made the usefulness of the branch in enabling regular money transactions marginal.  A visit to the branch now is no longer a necessary inconvenience, the motivation is limited (even if the kids can luxuriate in a ball pool or your dog can get a drink).

What then the future and what of Virgin Money and Metro Bank?  The last two I must confess to having no clue as to how they are trying to change the customer experience to be relevant to todays market. In Virgins case  floating  seems to have been the number one objective as the impact on the banking proposition as a whole has been negligible, similarly Metro have, in my view, done nothing to create a revolution in the branch banking model (including how to make a profit).

The future for the branch has to be geared towards advise in the same way that the Apple store is.  Signature stores in large town centres manifestations of the brand, space rented out to associate companies, zones for different products, facilities and services make the bank branch a hub of commerce, a proper retail experience.  Complimentary and integrated with other communication and transaction channels providing an appropriate and relevant experience.

Ye Olde Pay Day Loan or the Road to the Marshelea

Ye Olde Pay Day Loan or the Road to the Marshelea.

Ye Olde Pay Day Loan or the Road to the Marshelea

I appreciate that this is a little indulgent, but what the heck! I have enjoyed writing it.  It does have a point  though and the analogies should be obvious.

It is the early 19th Century London; around the time Mr Dickens was penning his first novel, a typical reeking claustrophobic East London Street, the smells invigorated by the mid summer sun (though, only few sad rays are managing to infiltrate the snug fitting structures surrounding the narrow thoroughfare!) and the toing and froing of the transacting population. There stalked Scratch. Scratch the ever watchful, the predatory Scratch, his native essence adding to the insipid malaise seeping into the air.  Here he was purposefully anonymous seeking out an opportunity to feed on any open wound.

Scratch the furtive parasite tiptoeing agile through the throng, his gait irregular, never moving in a straight line, his head twisting this way and that, birdlike, wary of every sound, alert to every movement.

In the garb of the previous age (when it was purchased no doubt!) he wore black breetches, stockings and a tailcoat.  His head adorns a Tri Corn Hat underneath, a wig. His face is pinched thinly covered with skin almost translucent (excepting the mean lines) exposing the contours of his skull.  His nose oversized and slightly hooked, with vast ugly nostrils, a perpetually pursed thin mouth, a large forehead, sporting one single virulent eyebrow along its width, looming over deep set tiny agitating eyes.  An insect made man if ever there was one.

Ever attentive he is drawn to a disturbance a little way ahead, careful to conceal his attraction he circles his potential prey, finally crouching unobtrusively towards the fringes of the crowd drawn to witness the commotion.  The play unfolding in front of him (he will miss no detail, no nuance) has two actors an imposing red-faced man with full (and appropriate) pork chop side burns, fills a door frame he is warring a blood stained apron enormous forearms, folded, rest on an impressive girth.  He is apparently by trade a butcher.

The second part is taken by a slight earnest looking man, if by that you mean commonplace and seemingly decent, of about 30, he is rising awkwardly embarrassed to his feet, following his ruff ejection from the Butchers premises.

“ Sir,” he begins, the earnest man that is, in what is not an uneducated style of speaking “ I have been your loyal customer for as long as I have been married to my wife, who you have known since her youth and yet you deny me a weeks credit on a side of mutton and a half pound of sausages, I have said that I will pay you more than their value on my next payday.  My employer will vouch for my reputation and regular income”

The Butcher replies mocking “ Is my sign not impozin’, it stands tall enough, you a lawyers clerk an ‘all you must be able to discern the word, if not let me tell ya, it says “Butcher” and vat means I sells meat not charity, if its charity you want see the Commissioners, be off with ya, I’m tired of this show”

At the conclusion of his speech he squeezes back into the shop, the cheers (and to their credit a few jeers) from the now dispersing audience ringing in his ears.  Crestfallen the spurned man slinks away out of sight of everyone, well almost everyone!

The insect has located a carcass and it is not in the obdurate Butchers window, it is currently bowed, troubled, travelling purposelessly. Looking every bit like a lamed animal detached from the heard, out in the open, unaware of its vulnerability.

The Insect does not pounce straight away he follows, skipping, pirouetting seemingly looking everywhere but in the direction of his target, he settles for a moment in one place, then darts to begin his manic dance one again.  All the time, forming in his mind, a plan, he thinks the Butcher stupid for missing his chance he will not make the same mistake. Finally, having determined the appropriateness of the location, that is, away from the sight of any human eye, he lands.

He appears it seems from nowhere in front of his victim pausing to paste his own face with his hands, as if washing, making a noise with his lips as they pass over them. He rubs his hands together before raising one of them to stop his distracted quarry in his tracks.

“Hey!” it says brushing Scratches bony hand away from his shoulder twisting away from the unwanted attentions.

“Stay, young man don’t be so hasty”, insists Scratch formulating an approximation of a smile “ I saw your discomfort just now at the hands of that brute of a Butcher” he spits to one side, as he says the word.  “I want to help”

Even though repulsed by the appearance of such a creature, the object of the Butchers derision stands (all is now lost!).

Scratch continues, forming his words carefully and slowly so that the young man has to listen attentively to get their gist,  “ Much as I try to fight it, I find that I cannot ignore my philanthropic nature, it’s a curse, I know, but I cannot resist the urge to help a body in trouble”  (strange use of words “body “ perhaps he is really finding it difficult to hold back his baser urges!).

“Can I confirm with you that you find yourself a little short of money, only temporarily mind, and wish to draw down a trifle in advance of your comfortable salary due in a weeks time?”

“Yes, exactly that” says our naïve dupe “ An unforeseen expense has completely thrown out my careful budgeting, my wife relies on my competency in this area and knows nothing of the difficulty and she must not know her constitution will not bear it, I am in a word desperate”

“Desperate eh!” says Scratch desperate himself to hide his glee! “Don’t despair (although, don’t doubt he will in due course), it is our fate to meet up, yours to have your rescuer witness your plight, mine to meet up with a worthy cause to indulge my generosity (mode point this!). Can ask how much you need, now don’t hold back my purse is deep? ” Yes, very deep indeed generally too deep for any of its contents ever to see the light of day.

“Half a crown, will see me right, Sir”

“Would another six pence on top make absolutely certain?” enquired the Philanthropic Insect

“ Sir that is more than generous and will ease my concerns”

“ No, no tis my destiny, I am but the conduit “ the humble Insect insisted “even though I am at the mercy of my liberal character, I must show some responsibility to you and your future, There are, therefore conditions, that I  must impose if I am to conduct myself with integrity”

Scratch, with due solemnity continues “However, if I am to assist you at all, I wish to know a little more about your situation.  Are you prepared to tell me your name and the amount of your weekly wage?”

Eager to show his trust Tom Finch says quickly “ Tom Finch and nearly 9 shillings and soon to rise on the anniversary of my employment”

“ Not at all bad Tom for a lawyers clerk you must be well thought of,  my name is Scratch”

“Now then is your rent paid up to date and have you any savings?”

Tom replied slightly less eagerly as he is gaining in confidence in the well-meaning Gent (Gent!!) “ In the two years of occupation of Penn Street I have been most prompt with payment. As for the second part of your enquiry I am afraid I can be less forthright, we have alas very little set aside and that has its hat and coat on too”

Scratch, rubbed his elbows together a very strange and alarming action, he is doing a similar thing now with his knees. Tom in such raptures with his Saviour hardly notices and if he did he would persuade himself that it was an endearing eccentricity.

The “Eccentric” having performed these tricks cocks his head to one side and closes his eyes in a feign gesture of consideration.  “ These are my terms, you must bring with you, to my business premises tomorrow, your rent book and evidence of your employ.  On sight of these the money is yours in an instant.  I will require payment a week from that date with addition of half as much again.  This you understand is not for my gain, although, a little is for my risk, no it is that I feel am obliged to teach you the lesson of prudence and the consequence if in recklessness it is ignored”

The business end of the conversation continues “Having been through this small inconvenience I am prepared, under these terms, to offer to help in the same way should, and I doubt it will, the same misfortune befall you again, but not infinitely,  mind, for your own good the arrangement will terminate after say four transactions.  One other thing  I require of you and in order to sate my incessant cravings to help, you must tell all of your friends, family and colleagues of the availability of the service I have to offer.  Please shake hands on it”

Tom offers his hand, greedily accepted by Scratch who shakes it enthusiastically.

Tom Finch expresses his thanks and says “On my honour”

Scratch hands over his calling card, Tom examines the address “ Aye, I know of this road it leads down to the Marshelea”

Scratch now abstracted says “ I believe it does, no mind”

They part, the earnest man striding now positive towards a destination, the Insect anxiously surveys the area he is uneasy at being in one location for this length of time, he is now flitting away restless, looking, looking the hunger to suck blood unabated, constantly tormenting him.

For those of you unaware the Marshalea was an infamous Debtors prison.  Tomorrow Tom will literally tread on the “Road to Ruin”.  Who would have thought nearly 200 years later people are still intent on travelling down the same path.

Diamond Geezer

I did this at the time of Bob Diamonds demise,  at the time I decided not to post it but looking at it again I think it is rather good so here it is now, less topical but still relevant I think.

 

I am a “Diamond Geezer” name of Bob

And I used to hold the Banks top job

But I am afraid this is no longer the case

I have been forced to resign in disgrace

 

How did we arrive at this pretty state?

What condemned me to this ignominious fate?

My star used to fly so high in the corridors power

Now dear friend it has all turned sour

 

It cannot be right that I am treated so cruel

Just for being caught breaking a minor rule

What the Hell is LIBOR, pray?

If it cannot be manipulated in this way

 

It wasn’t me who made the transaction

It was rouge group within, a despicable faction

The culture I created does not tolerate this sort

The end justifies the means but most of all don’t get caught!

 

So no longer can I rely on my modest remuneration

Performance related against objectives of my own creation

The gravy train has ground to irrevocable halt

But there is no way I going to admit that it was my own greedy fault

 

All you need is love (not)!

I read an advert recently created for Metro (Retro) Bank, the strap line read “At last a bank you can love” Love, really, is that at all necessary or even desirable? Time to examine the Oxford English’s definition: Love (noun) 1. A strong feeling of affection 2. like or enjoy something very much. Noble aspirations you would think , for me though, that requires a level of emotional investment (and time) from the customer that is counter to what I believe a bank should be.

Certainly, I would want my customers to trust me as a bank and have respect too (they could expect the same in return from me) and be advocates, but I would also want them to say that the bank was unobtrusive, uncomplicated, quick and convenient, not words  readily associated with a loving relationship more a dependable friend .  For me a bank should offer peace of mind allowing customers to get on with those things that matter in life, for instance, finding love.

I want my customers to enjoy a different relationship with their money, where they say “it is sorted, requires little time from me and no longer a worry ” I would like them to say “in touch and in control” (registered)  that by the way is the strap line of my new  generation digital bank to be launched later this year.

Why is sorry the hardest word?

I have been reading some of the copy and watching extracts from Lance Armstrong’s interview with Oprah Winfrey and, although he emitted the word sorry he comes across as being somewhat short of contrite his apology rendered disingenuous as a result.  We should have expected nothing more as it seems that high profile individuals (and for that matter Corporations) placed in positions where an unconditional admission of guilt is required almost always fall well short of saying “sorry” and meaning it.

 

There are plenty of recent examples: Bob Diamond, the Maxwell’s, George Entwistle, Fred Godwin et al.  My guess is that it is an ego thing stopping them from admitting they could ever be wrong or making immaterial (to them) consequences on others or even caring what anyone else thinks.   In practically every case the circumstances where the apology is made has been imposed, involuntary and involves some sort of personal consequence. The magnitude of cynicism is gobsmacking and it’s hard to see what it achieves beyond confirming peoples negative preconceptions.  

 

Apologising in some circles is seen as a weakness. this particularly extends in the business world. I remember as a callow youth working in the complaints area of a Bank (of course) and being instructed that I could regret but never say sorry and although this was Ions ago this attitude still exists.  Corporations very rarely admit fault I understand the worry about PR or maybe the legal consequences but these should not outweigh being seen as a genuine and trustworthy organisation.  

 

I have been fortunate enough to work for two organisations First Direct and Egg who when they did anything wrong admitted it.  Egg at launch over achieved to such an extent that applications pilled up and caused horrendous delays, we wrote to everyone admitted we got it terribly wrong and apologised.  At First Direct one Easter a TV campaign went so well that it caused unprecedented delays in answering calls.  The CEO at the time Kevin Newman firstly withdrew the Ad (a statement of his commitment to the customer in itself) and then made everyone get on the phone including Executives and Managers to offer their apologies to existing customers for the poor service they had received.

 

In both instances and in similar incidents the reputation of the Company was enhanced because the expression of regret was genuine and the consequent actions manifest of that.  When things go wrong a strong resolution often results in the complainant becoming a strong brand advocate.   Humility as brand trait will result in loyalty and advocacy, individuals can with humility genuinely be sorry ask for forgiveness and get it.  Being sorry and meaning it shows strength and will more often than not begin the recovery process.  The attitude of Lance Armstrong and the like, I am afraid, generates the opposite, weakness and the damage prolonged.

 

 

Husbands beware the Christmas Tree

As it is nearing Christmas I thought I might continue with my guides to a successful holiday.  You may recall, in particular, my guide to husbands buying presents for their wives “Husbands help is at hand”.

 

This time I want to create awareness of the implications for husbands should they have the misfortune to be tasked to buy the Christmas tree on their own.

 

The major hurdle is interpreting your wife’s specifications these will be along the lines of:

“It should be not too tall but neither too small”

“It can be too wide and also too narrow”

“The trunk may not be too thick or too slim”

“It should not lean but it can also be too straight”

“It can be too green but not green enough”

“The pine needles need to be just right”

etc.,

 

Unfortunately, nothing that is tangible, you are, I am afraid on a hiding to nothing.  You will not get it right so might as well save yourself time by just picking the most convenient example in the sure knowledge that you will be returning it that same day.

 

This time you will be in the company of your wife “I should never have trusted you in the first place”.  She will then proceed to pick a tree that in your eyes is for all intense and purposes is exactly the same as your choice.    I hope this helps, it is not you it is just part of the tradition!

 

 

NFC (No Flippin’ Chance?)

“Whey hey!” the gestation of any business begins with an exclamation mark at the end of one expression of exhilaration or another;  “Eureka! Fred we can start”.   It can come in a moment of inspiration, after years of deliberation or anything in between.  Intuition, intellect, research, need, desperation, redundancy, bitterness, luck, falling over, ego, being hit on the head, prayer, all can play a part. 

 

Very rarely is it purely, for the founder, founders just or even anything at all to do with the pursuit of riches (good job as equally rarely does it result in same being realised, poverty is the more likely result).  In any case if this were the motivation in my experience the likelihood of failure increases ten fold. 

 

No, the real trick is making it relevant; is what you have created appropriate to the state of your market at the time you launch it and does it meet a consumer need?   Get either of these wrong and your can expect to fail. 

 

An example (and this is what I want to talk about) of this is NFC (Near Field Chips) enabling what is called proximity payments using your mobile phone to pay for stuff at the point of sale.   The technology has been around for 10 years or more and for at least that time Analysts have been predicting take-off.  There have also been numerous trials but the reality is that during this period this innovation in payments has been greeted with a wave (there is a pun in there somewhere!) of apathy. 

 

Why? Lets start with the market.  In order for NFC to work it requires devices at the POS to be enabled to accept payment made from a smart phone.  Retailers then, have to go to the expense of upgrading their equipment.  To embark of this exercise they need an economic reason to do so, either it saves them money or generates more sales.  Most Retailers have a cynical view of any new payment process promoted by the Payment Service Providers, born out of the perception of being screwed once too often by them.  Meaning that the case has to be watertight before they will take the plunge (continuing, you will note, with the wave analogy!)  

 

From the Retailers perspective (given their exacting standards) has the case been made, will it save them costs? Maybe a little tenuous but nevertheless queue times maybe quicker, less handling of cash, reduction in staff, I would suggest not compelling enough.  Is there an element of “be there or be square”?  NFC is everywhere else we could look bad if we don’t.  No, no one else has seen the benefit either. 

 

What about generating more revenue, hum, again, smartphone users are not currently searching around for retailers that accept mobile proximity payments, even if they knew what they were.  In addition, it is doubtful that the phone they are using has the facility that makes it available to them.

 

That moves us off the market relevance to customer need.  What benefit will the customer experience?  This is a bit “chicken and egg”, if there is nowhere to use it, because of the lack of adoption in Retailers and not all smartphones support it, what’s the point? In any case where there are POS proximity readers, customers can use “contactless cards” where the benefits of speed and convenience can also be realised. Actually, it is quicker than Mobile NFC, as contactless cards are not authorised for transactions below £15 (£20 in future) where as, a payment through the smartphone is authorised and on the majority of occasions will require the cardholder to input a PIN.   

 

I am speaking specifically about payment here, and the situation as it has existed in the last 10 years, in the future, Mobile NFC will enable loyalty and vouchers to be fulfilled and other promotions, Qr codes maybe more widely used and, of course, once the technology is robust, the advent of mobile wallets (storing card details on your mobile allowing the consumer to elect to use any of their payment options via the mobile phone). 

 

These developments appear to be changing the market context and possibly creating a customer need.   Still, yet to be proven, there are many who once were strong advocates for NFC who are becoming less bullish.

 

There may have been a Eureka moment but my guess is that the perpetrator of this exclamation in this case, is felling, after all these years of waiting for it to take off slightly embarrassed at is initial rush of enthusiasm at his idea to change the world, and his faith is being tested.   Timing is everything and there are very few overnight successes.