My eye recently alighted upon the following headline in Marketing magazine: “Marketing ‘to blame’ for lack of trust in banks”. The article went on to say: “Senior banking executives have argued that marketing is to blame for the breakdown of consumer trust in financial services brands.”
Extraordinary. Bank officials in self-inculpation shock. I read on, avid for fresh enlightenment about the real roots of the 2008 global banking crisis. And was disappointed.
It turned out that the subs, in their eternal quest for the succinct and memorable, had been a little too sharp with their headline. The only bank marketer actually shouldering any of the responsibility was David Wheldon, now rejoicing in the title of head of brand, reputation and citizenship at Barclays Bank: and he, in any case, is a recent import from Vodafone. Furthermore, what Wheldon actually said was pretty anodyne:
“Marketing has let financial services down… The voice of customers has not been ever-present in decisions, and marketing must bring the voice of society to the table. A brand is what a brand does, and how you behave in the wider world forms whether you’re seen as a good citizen.”
Nevertheless, I think the subs unwittingly raised a very good question. To what extent has marketing been responsible for the banking crisis?
Not very much, I would suggest, when compared in the scales with systematic mis-selling and its parent, corrupt corporate culture.
The paradox about bank marketing is that, despite the vast budgets put at its disposal, no one takes very much notice of it. There are a variety of reasons for this: among them, overblown corporate claims unsusceptible to real analysis; phoney discounted interest rates showered upon the bewildered would-be customer like confetti; the perception that banks act as a cartel and are extremely unlikely to break ranks for the sake of a genuine marketing initiative; and customer inertia, which makes bank management as resistant to change as their customers.
But perhaps the most compelling reason why bank marketing is a study in failure is that the upper echelons of bank management don’t really believe in it themselves. Despite the eye-watering financial packages senior bank marketers command (when compared to industry benchmarks), only half-jokingly are they referred to as “heads of flower arrangement”; in effect they are of middling rank in the bank hierarchy. Top executives have rather more important things to worry about than the latest lick of corporate paint or flowers in the shop window. Things like the international money markets, their bonus structure, and, er, Libor.
Much more insightful on the breakdown of trust between the banks and the public than Wheldon et al speaking at the Marketing Society conference is Richard Ricci’s recent performance before a parliamentary committee. Ricci (image above, doing a passable imitation of a spiv at the races) has just been appointed head of Barclays’ investment operation. His predecessor was turfed out over the Libor scandal (for which the bank was fined £290m last June) and he has been entrusted the hapless task of cleansing the Augean stables after all the horses have bolted. Pressed hard on why he thought the banks had failed society, he admitted that they been allowed to put too much emphasis upon employee incentives to the exclusion of all other considerations:
At the top of the house, the industry, and I would say at times Barclays, was skewed maybe too much towards the financial performance and not enough towards the other areas. And so one of the pieces of work we’re doing is trying to get that balanced scorecard right around appraisals, around reward, to get all those interests aligned properly.
Greed, not marketing. Enough said.