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Back to bank-speak?

Back to bank-speak? 1

By Meg Roberts, creative director at language and behaviour consultancy Schwa.

Before the crisis, the financial world had been getting clearer. But has coronavirus undone the good work? That’s what Meg Roberts of Schwa asks

Let’s do a little time travelling back through the 2010s – remember them? A simpler time.
In 2018, UK fintech Monzo made their famed writing guidelines publicly available. Packed with advice on using the active voice and everyday words, it was a clear flag to the rest of financial world: complicated communication wasn’t a necessary evil of banking after all, just another industry bad habit. One that Monzo were breaking.

Before that, in 2016, the UK regulator – the FCA – launched their Smarter Consumer Communications paper, telling financial firms to aim for ‘simple, clear information and explanations’ when they talk to customers.

And before that, way back in 2015, Lemonade launched in the States. Designed with behavioural science in mind, the zingy new insurer brought some much-needed clarity to the industry, swapping age-old jargon like ‘contents’ for the pleasingly quotidian ‘your stuff’.

It might not have been an overnight switch, but banking was slowly shedding its over-complicated image. It was starting to seem like financial companies actually weren’t trying to trick us with small print and caveats.

But as the financial world scrabbles to right itself from coronavirus, are the bad habits coming back?

In difficult times, our communication suffers. It’s true of us as individuals – it’s why ‘happy birthday’ cards are much easier to write than ‘sorry for your loss’ ones. And it’s true of organisations – the harder the message, the more cooks we involve (and the more convoluted everything gets) – whether we’re writing about redundancies or interest rates.

Let’s take the UK government’s coronavirus loans an example There are two: the Bounce Back Loan (BBL) and, less catchily, the Coronavirus Business Interruption Loan Scheme (CBILS). When you take a look at the advice the British Business Bank – the Government institution responsible for the scheme – are doling out to lenders, it’s impenetrable. I ran the ‘key messages’ documents of either loan through a readability checker: they both score under 30, meaning they’re about as hard to read and understand as a PhD paper.

Complicated comms create complicated services

These documents are packed with terms like ‘straight line basis’, ‘borrowing proposal’ and ‘undertaking in difficulty’. (Confusingly, you can’t be an undertaking in difficulty to qualify for this government help). Beyond jargon, the language is passive, longwinded and dense. And these are the so-called key messages – not even the terms and conditions.

By foisting this meandering finance-speak onto lenders, the Government give them two options: pass it on to their customers, or slow the process down by trying to translate it into something that actually makes sense. After all, some borrowers might be finance-savvy, but a lot will be small businesses – hairdressers, builders, legal firms. The nuanced language of lending won’t be familiar to them.

So all in all, is it any surprise that these loans haven’t been plain sailing? They’ve faced criticism for being too slow, too rigid, with too many checks – and Tide has refused to keep doing them altogether. In short, they’re just too complicated for a scheme that was billed as a simple fix.

But finance has form for this

It’s not the first time that complicated communication has come hand-in-hand with a crisis. In Too Big To Fail, Andrew Ross Sorkin talks about AIG (run by Bob Willumstad) sending a note to ask for a bailout from the Federal Reserve (run by Tim Geithner) during the last financial crash:

Meg Roberts

Meg Roberts

‘About halfway down the page was the startling detail… ‘$1 trillion of exposures are concentrated with 12 major financial institutions.’ You didn’t have to be a Harvard MBA to instantly comprehend that figure: if AIG went under, it could take the entire financial system along with it. Geithner glanced at the document cursorily and put it away.’

The Federal Reserve did, of course, bail AIG out in the end – but if the main point hadn’t been buried in the middle of a page, could it have happened sooner? And could – whisper it – the crash have had a less catastrophic impact?

This trend for communicating poorly as times get tough is just as true of company crises as it is of industry ones. It’s why a study by S&P Global Market Intelligence in 2017 shows a direct correlation: the more ‘polysyllabic’ language a firm uses, the worse their stock performs. In one earnings call they analysed, the CEO of Seagate Technology confidently but incomprehensibly declared:

‘We’ve always viewed this business as attractive in terms of its core business of selling into OEMs as well as servicing cloud service providers, but architectures evolve to have the capability to optimize the devices either at the device level, at the subsystem level or the systems level.’

Straight after that earnings call, their stock plummeted by 17%.

Nothing tests your brand tone like a crisis

So if downturns and bad news make us waffly and confusing as communicators – with sometimes disastrous consequences – what do we do about it?

  1. Define your approach to crisis comms
    Whether you have communications principles or a brand tone of voice, they’re not fit for purpose if they don’t include pointers on giving bad news messages – pointers that you’ve agreed long before the crisis hits.
  2. Create a clarity czar
    HSBC and Monzo both have their own ‘head of language’ roles, with slightly different titles. This job is different from a comms lead or even brand team – their whole remit is keeping your organisation clear (including training other teams to write right).

But in short, you can see how circular it is. We communicate poorly in bad times, which breeds extra complexity, which in turn, breeds more poor communication – and on and on it goes. It’s up to you to break the cycle.

 

This is a Sponsored Feature.

Banking

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak 2

Before Covid, 23% of people prioritised helping younger generations out financially, that increased to a third as a result of the pandemic

A recent survey* conducted by Hodge has revealed that the Covid pandemic has led to more people wanting to help younger family members financially.

A third (31%)** of those questioned said that since the Covid outbreak giving a financial gift to children or grandchildren is more important to them, compared to 23% who said it was a priority before the pandemic.

The traditional “Bank of Mum and Dad” is still very much open for financial help, with parents being responsible for 72% of the gifts, but the study also revealed that financial gifts can come from all corners of the family – including children (14%) and siblings (14%).

The survey also found that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely to receive

The most popular reason for gifting money to family is for special occasions such as a quarter of gifts were given for weddings and birthdays but 11% of people have received money to help with big purchases such as cars and houses. In addition, 19% of people have received help with day to day finances, with around 14% of those receiving a gift have done so to pay off debt.

Emma Graham, Business Development Director at Hodge, said of the research: “Our study showed that, as a nation, we all want to help our family out when it comes to money. And whilst we all think of the Bank of Mum and Dad or Gran and Grandad as a traditional source, we were surprised to see that 14% of brothers and sisters are also helping out.”

The findings come from a recent intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.

As part of the study, people were also asked about paying back the gift, with 40% of beneficiaries expecting to pay their parents back, but this dropped to 28% if the gift came from grandparents.

From the gift donor’s perspective, 26% expect the gift to be paid back, however just 15% of grandparents expected the money back.

Hodge has produced a set of guides on how families can navigate the tricky subject of giving financial gifts within a family, as well as the considerations and steps that be families should think about taking before a gift is given, such as is it a loan or a gift and thinking about contingencies if the family member’s circumstances change. The guides can be found here: https://hodgebank.co.uk/news/

Emma continued: “It’s clear that families feel strongly about offering financial support to each other if they are able and this has increased since the Covid pandemic. Before Covid, 23% of people prioritised helping their families out financially in the next five years. Since the Covid-19 outbreak that has increased to a third of people saying helping a family member financially had become more important.

“So, it is clear that the Covid-19 lockdown and subsequent predicted economic downturn, has led to more families looking to share wealth to help younger children or grandchildren during this difficult time. Many people may look to Later Life mortgages, where many products have reduced their rates and have flexible lending criteria, to help out a loved during these difficult times.”

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Banking

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery 3

·         Analysis of the performance of over 1,000 UK small and medium-sized businesses by Allica Bank provides roadmap for SMEs 

·         Regular training, an openness to innovation, and a clear vision all contribute heavily to an SMEs’ chances of success  

·         Allica Bank has launched a programme of free workshops to expand on the findings and support business owners 

Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.  

The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful COVID recovery. The six top-line rules emphasised by the data were: 

Rule 1: SMEs should regularly train staff 

Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.  

Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy. 

Rule 2: SMEs need to focus on innovation and technology 

Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities. 

Rule 3: Small business must have a formal, long-term vision  

Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision. 

Rule 4: SMEs should broaden their customer reach and find new markets 

Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success. 

Rule 5: SMEs need to develop reinvestment plans 

22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%). 

Rule 6: SMEs should engage with local business organisations and networks  

Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs). 

Chris Weller, Chief Commercial Officer, Allica Bank, said: 

“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.  

“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.  

“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.  

“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”

The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.

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Banking

New research finds that financial wellbeing should be at the heart of banks digital experiences as the UK enters recession

New research finds that financial wellbeing should be at the heart of banks digital experiences as the UK enters recession 4

MullenLowe Profero have today launched a new report focusing on two communities who will be hardest hit by the recession: 18-25 year olds and small businesses. These communities need financial wellbeing support at the core of an increasingly digital relationship. MullenLowe Profero partnered with Censuswide to survey 1,004 18-25-year-olds and 504 small businesses.

Concern around financial shocks is harming individual’s wellbeing

The survey finds the ability to absorb financial shocks being the critical worry affecting wellbeing and 40% of 18-25-year-olds are sometimes afraid to look at their bank account.

They are seeking financial education to relieve worries

With over two-thirds of respondents demanding financial education in order to find peace of mind and 40% of 18-25-year-olds state that thinking about their money has a negative impact on their wellbeing the report highlights the audience are open to more active support from banks. 60% of the audience feel banks should help them have the capacity to absorb a financial shock.

When our bank is in our pocket reminding us of our anxieties, is there now a duty of care to support our wellbeing?

The survey finds that the digital experience is now the number one reason for choosing a bank for 18-25 year olds.

With this shift in digital preference, people are expecting banks to play a bigger role in wellbeing. 58% of those worried about their money want banks to help them take control.

More than half of 18-25 year olds agree that a bank’s role is now to:

  • provide education on money management
  • help them keep on top of financial goals
  • help them save enough money to cope with the ups and downs of life

People are feeling closer to local communities, but there is a gap in how brands should engage communities in a digital world

Half of 18-25 year olds agree that in the last few months the importance of their local community to them has increased. 40% agree they’ve engaged more with their local community in recent months. There’s a tension between how to engage a community as 60% agree they prefer a bank with better digital tools over a bank that offers more local branches. However, 60% feel banks need a branch presence to support local communities.

The importance of Global Wellbeing rises

Over half of 18-25 year olds agree that the events of the last few months have made them seek out brands that do better for the world. The research findings show that what they want most is to be recognised for their positive behaviours. 56% of the audience highlighted that they would find rewards and benefits for purchasing ethically and sustainably most useful.

Banks digital experience today lack empathy

In this time of reset, the survey found a third of customers and small businesses are considering changing banks in the next year as a result of the impact of the pandemic. The report concludes that brands that will win will champion financial wellbeing in the digital experience through empathy and emotional intelligence.

For the full report, get in touch with MullenLowe Profero at [email protected]

Howard Pull, Head of Digital Transformation Strategy at MullenLowe Profero, said: “Our findings are a wake up call for digital innovation in banking relationships.  With digital experience being the number one choice for selecting a bank, there’s a huge opportunity for banks to support individual wellbeing at scale by understanding and responding to our goals and anxieties to build better money habits.”

Methodology

The research was conducted by Censuswide, with 1,004 18-25-year-old current account holders and 504 small businesses with business bank accounts and annual revenues up to £2m between 23.06.2020 and 29.06.2020. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

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