The unsociable FSA's Dr Pepper moment

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2. 3. 4. In June 2010, the UKs Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK 5. In June 2010, the UKs Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK Heres what the guidance suggests 6. Prevailing financial promotions regulation applies to platforms like Twitter and Facebook, and forums, blogs and iPhone applications. 7. It also said stuff thats difficult to disagree with like 8. It also said stuff thats difficult to disagree with like Use of social media should ensure clear, fair and not misleading communication with clients. 9. The trouble is, I ended up thinking 10. Whose financial services industry is it anyway? 11. Is ityouradvice or your clients? 12. Is ityouradvice or your clients? Is ityourproduct or your customers? 13. Is ityouradvice or your clients? Is ityourproduct or your customers? Is is about consumerengagementor an industry that can be regulated? 14. Because the way in which peopleliketo communicate is changing. 15. And so I thought Id share my thoughts on 16. 17. 18. 19. 20. And like any good story it starts like this 21. 22. our species just couldnt help gathering together (and still cant) 23. We couldnt help swapping stories, enjoying each others company and enjoying safety in numbers 24. Weve always liked to congregate together in order to exchange goods and services 25. Or congregate around shared values and beliefs 26. And, generally, have a good time 27. 28. 29. 30. Language 31. Language 32. Language Technology 33. Language Technology 34. Language Technology Means of distribution 35. Language Technology Means of distribution 36. Language Technology Means of distribution Cash 37. 38. Technology 39. Technology Means of distribution 40. Technology Means of distribution Cash 41. 42. Technology 43. Technology Means of distribution 44. Technology Means of distribution Cash 45. Nowbecause it relies on the transmission of a message via a medium 46. mass media content needs to be manufactured 47. So, at one end of the model, theres an individual or organisation that wants to transmit something 48. Which means they have to decide on the content of a message 49. And select the media by which they intend to transmit that message 50. In order to reach an individual at the other end of the process 51. with access to the means to receive and understand the message 52. So the rules of engagement are determined by those with the ability to gain access to the medium 53. while consumers of content are subject to those rules 54. Web 1.0 continued this pattern 55. But Web 2.0 has entirely changed the potential of this role Web 1.0 continued this pattern 56. Thats because Web 2.0 has made the ability to publish content freely available 57. Technology Means of distribution Cash So cash is no longer a big barrier. The main Investment is time. 58. Technology Means of distribution The network forpublishing and distribution is readily accessible 59. Technology Which just leaves youwith the means required to publish content 60. And, these days, a mobile device is all that you need 61. So the rules of engagement are determined by those with ability to gain access to the medium 62. So the rules of engagement are determined by those with ability to gain access to the medium And the rules of engagement are determined by those with ability to gain access to the medium 63. You end up with a model where so long as theyre prepared to invest the time individuals possess the same potential as organisations to publish content via platforms 64. 65. (As insocialist everyone whos able to can participate equally in a common means of sharing and publication) 66. Which means the social web offers the equivalent of this 67. And this 68. And this 69. Because were able toreal- ise offline interaction online via social platforms 70. Opting to participate in as few 71. Or as many 72. As we like 73. Which brings me neatly back around to the guidance for the use of social web platforms by the UKs Financial Services Authority (FSA) 74. By choosing to treat social web platforms and tools as a medium thats just like traditional mass media 75. The FSA is focusing its attention on the use of the social web as a means of pushing promotional messages 76. Rather than encouraging the use of the medium for a vastly more useful ambition: 77. Rather than encouraging the use of the medium for a vastly more useful ambition: To encourage consumer engagement with financial services businesses and so take care of their personal financial wellbeing 78. Rather than encouraging the use of the medium for a vastly more useful ambition: To encourage consumer engagement with financial services businesses and so take care of their personal financial wellbeing Howeverpeoplewant to 79. Rather than encouraging the use of the medium for a vastly more useful ambition: To encourage consumer engagement with financial services businesses and so take care of their personal financial wellbeing Howeverpeoplewant to and not just how the FSA wouldpreferthem to 80. The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as 81. The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as The Dr Pepper moment 82. But the FSA needs to pay attention to its own statutory objectives, which are 83. Market confidence:Maintaining confidence in the financial system 84. Market confidence:Maintaining confidence in the financial system Public awareness:Promoting public understanding of the financial system 85. Market confidence:Maintaining confidence in the financial system Public awareness:Promoting public understanding of the financial system Consumer protection:Securing the appropriate degree of protection for consumers 86. And the FSA needs to heed its own principles of good regulation too 87. Proportionality:The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions 88. Proportionality:The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions Innovation:For example allowing scope, where appropriate, for different means of compliance so as not to unduly restrict market participants from launching new financial products and services 89. Because by paying a disproportionate amount of attention to prevention of the Dr Pepper moment 90. Because by paying a disproportionate amount of attention to prevention of the Dr Pepper moment The FSA may prevent consumers from helping build a better UK financial services industry 91. Like the way Starbucks customers help the coffee-shop brand enhance and design new products and services 92. Or Lego enables its customers to design the kind of products that theyd like to buy themselves 93. Or the way in which 37Signals enables greater transparency and service experience for clients thanks to tools like Basecamp 94. Or the way Trip Advisor enables travellers to share their opinion of destinations so people have richer sources of information on which to base choices 95. And even effect improvements in facilities by encouraging owners of businesses to address issues about the quality of their service 96. Consumer participation makes for better regulation 97. And besides 98. The use of social web platforms is only going in one direction 99. In 2000 27% of the UK population were online. In 2008 it was 76%. 86% of UK 18-24 year olds go online each day. And by 2013, 43.7 million UK consumers will be online. 100. So consumer habits are changing 101. So consumer habits are changing Consumption of content is changing 102. So consumer habits are changing Consumption of content is changing And consumer expectations of businesses are changing 103. Which means the FSA cannot ignore its own principle of good regulation for innovation: 104. Which means the FSA cannot ignore its own principle of good regulation for innovation: Allowing scope, where appropriate, fordifferent means of compliance so as notto unduly restrict market participantsfrom launching new financial productsand services 105. when the most significant participant in the marketplace always has been and always will be consumers 106. If the FSA continues to insist on regarding the social web primarily as a means of pushing promotional messages 107. The rules of engagement will be determined by consumers with the ability to gain access to the medium 108. while regulated businesses will feel powerless to confidently engage with them The rules of engagement will be determined by consumers with the ability to gain access to the medium 109. And consumers will just find some other way of obtaining what they want instead 110. Now thats what I call a Dr Pepper moment 111. 112. 6:Financial promotions industry update No 05(June 2010),Financial Services Authority 22, 23 and 66:Campfire image byKara Brugman 24, 67 and 105: Al mercato di campo de' fior byPyno Moscato 25:Vaulted roof interior byTim Caynes 26 and 68:Lamb & Flag byJulia Manzerova 29-36:Manuscript byLiz Muffet 37-40:Hoes one cylinder printing press image,Wikipedia 41-44:TV aerial image byVctor Nuo 60:iPhone image byWilliam Hook 110: Dr Pepper can , Coca Cola Great Britain press centre Photography credits and sources