A raft of proposed regulation from the Financial Services Authority
ought to have marketers from all sectors of industry sympathising with
their financial services peers, but two other developments make it hard
to feel too sorry.
The first is a report by the Citizens' Advice Bureau that slams a number
of high street banks and credit card companies for their
less-than-honest communications approach to debt consolidation and
loans. Well-known financial brands are condemned for selling loans,
payment-protection plans and low-interest balance transfers that could
suck people with debts further into the financial mire.
The second is that customers' direct debit data is now available on a
single electronic platform, making it quicker and easier for customers
to move their bank accounts. A flurry of advertising, particularly from
the new and online financial brands, is inevitable. The recurring theme,
heavy on percentage figures is likely to be the amount that can be saved
by leaving the big high street banks.
The headline percentage is one of the chief ways in which a financial
service demonstrates the benefits of its brand or product. Past
performance, lower interest rate, higher interest rate, mortgages, loans
- there's little in the financial world that cannot be sold using a
selective percentage rate. And therein lies the problem.
The Financial Services Authority (FSA) is not an advertising-friendly
body. Other regulators can only look in wonder on its arcane small-print
requirements. One has to admire financial marketers and their agencies
for having the strength of character even to enter the maze.
Yet the FSA has another hurdle for financial advertisers to clear.
Central to its proposed rule changes is that communications must not
accentuate potential benefits without a fair (FSA emphasis) indication
of the risks.
The reams of small print that have for so long hog-tied financial brands
and advisers apparently no longer suffice. It means you can't
communicate a positive brand differentiator without pointing out
potential pitfalls, with equal weight.
The FSA will say its rules are there to protect the public. But the
public interest will not be served by a cacophony of confused messages
that do not inform, educate or entertain. The small print that must
currently be carried is largely ignored by customers, who are already
protected by the buffer of supplementary information they receive from
any financial product before they sign up, and by a cooling-off period
after they have.
Responsible marketing is required in the financial services market and,
for the most part, it is delivered. Regulation that renders financial
advertising even more impotent than it already is will help no one -
consumers, businesses or, ultimately, the FSA itself.