Neil Jones, Consultancy Partner for TCS
The rapid uptake of social media has changed the way that customers interact with one another as well as with businesses. Customers remain the end users, but platforms provided by social media mean that the customer’s role has evolved and expanded to include reviewer, idea generator and advisor.
Traditionally financial services companies have been slow to implement customer engagement strategies compared to other industries. This is in part because prior to recent regulations, banks have not had to worry about customer retention as changing banks was much more difficult – something that is fairly unique to the industry.
The generation that is most strongly associated with the uptake of social media is Generation Y, which already makes up 50 percent of mobile banking users. Generation Y expects social media to be part of the customer service strategy and in the not-so-distant future, financial advisors will need to interact very differently with their customers and implement significant changes in their digital strategies in order to succeed. For example, customers would often receive scripted, flat and uninterested responses from banks, but now the social customer expects fluid and personalised interaction.
With new providers making in-roads into the financial services territory – like P2P lending, digital payments and insurance telematics – and e-tailers that are already familiar with customer analytics looking to take market share, it is increasingly important for financial services companies and advisors to address the obstacles that are preventing them from implementing a successful digital strategy.
Different financial sectors are facing different challenges but a key obstacle for the banking sector is that traditionally, service delivery systems are siloed around product offerings; therefore banks’ understanding of their customers has been incomplete. The result of siloed ownership is that only 42 percent of enterprises view their organisational structure for social media activities as effective.
However, most banks now are doing some level of social listening and customer support through mainstream platforms such as Facebook and Twitter as well as adopting new methods of engaging customers. For example, Nationwide is using social media to allow customers to influence key decisions. Its customers can vote on what charities Nationwide donates to every month and the bank provides vouchers as a way of thanking its customers for their engagement. As a result, Nationwide has strengthened its customer relationship.
Another challenge that the financial industries have is managing data. Banks need to use data, both structured and unstructured, to build up a much more complete and useful picture of the customer. It is essential to understanding and defining a relevant and engaging social strategy. However, there is polarity in spending on Big Data, with a minority of companies spending massive amounts and a larger number spending very little. As a result, we are seeing a few industry pioneers leading the way. For example, Movenbank has been using a social wellness score in conjunction with the standard credit rating to determine credit worthiness. This is a good example of an organisation using social data that is available to them in an innovative and unique way. The data provides viable insights into a customer’s background, and is used to build a more complete picture of the individual.
The rapidly changing environment of the social media landscape has also proved to be challenging as there is no one size fits all solutions for financial companies. We are starting to see some successful examples of organisations creating and facilitating an innovative culture and using crowdsourcing enhance their products and offerings. For example, Barclaycard a product called Barclaycard Ring, which is a crowdsourced community pioneered credit card. The ‘crowd’ is made up of the users of the card and they can make decisions about the product itself and benefit directly from the profits of the organisation. This is a strong example of an organisation embracing the new roles that social media has provided the customer, allowing them to influence and make decisions.
In this digital age, financial services organisations consider a combination of social, mobile, cloud and big data to be key to implementing a social strategy. However, if used incorrectly, it can seem like technology looking for a purpose, rather than technology solving a problem. It is important that banks define what they want to achieve from social media before they start to introduce solutions.
There can be no doubt that the connected customer will continue to provide momentum for change so it is vital that financial advisors focus on becoming more engaging, agile, insight driven, innovative and collaborative in order to meet the developing needs of customers and partners, now and in the future.
Oil rises as vaccine and U.S. stimulus boost demand outlook
By Laila Kearney
NEW YORK (Reuters) – Oil prices were up on Monday on rising optimism about COVID-19 vaccinations, a U.S. economic stimulus package and growing factory activity in Europe despite coronavirus restrictions.
Signs that Chinese oil demand is slowing kept prices from moving higher.
Brent crude rose 51 cents, or 0.8%, at $64.93 a barrel by 11:29 a.m. EST (1629 GMT), and U.S. West Texas Intermediate (WTI) crude gained 28 cents, or 0.5%, to $61.78 a barrel.
Both contracts finished February 18% higher.
“The three major supportive factors are the prevalent vaccine rollouts, the optimism about economic growth and the view that the oil balance will get tighter as a result of the first two points,” PVM Oil Associates analyst Tamas Varga said.
Support also came from a $1.9 trillion coronavirus-related relief package passed by the U.S. House of Representatives on Saturday.
If approved by the Senate, the stimulus package would pay for vaccines and medical supplies, and send a new round of emergency financial aid to households and small businesses, which will have a direct impact on energy demand.
The approval of Johnson & Johnson’s COVID-19 shot also buoyed the economic outlook.
Manufacturing data from around the world was mixed.
China’s factory activity growth slipped to a nine-month low in February, sounding alarms over Chinese crude buying and pressuring oil prices.
“One negative is more and more talk about Chinese oil demand maybe faltering, that they bought all the oil that they’re going to need for a while,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There’s some talk that their strategic reserves are filled up and so some people are betting against the Chinese continuing to drive oil prices.”
German activity, on the other hand, hit its highest level in more than three years and Euro zone factory activity raced along, driven by rising demand.
OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to agreed reductions under a pact with allies, a Reuters survey found, ending a run of seven consecutive monthly increases.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, meet on Thursday and could discuss allowing as much as 1.5 million barrels per day of crude back into the market.
(Additional reporting by Bozorgmehr Sharafedin in London, Jessica Jaganathan and Florence Tan in Singapore; Editing by Jason Neely, Edmund Blair, Barbara Lewis, David Evans and Will Dunham)
EU auditors warn over 5 billion euro emergency Brexit spending
BRUSSELS (Reuters) – The European Union lacks tight oversight of 5 billion euros in emergency Brexit aid, the bloc’s auditors said on Monday, warning over governance risks regarding quick cash injections as Brussels prepares to disburse massive amounts of COVID-19-related stimulus.
The European Court of Auditors (ECA) said member states are due to get 4 billion euros, or most of the funding from the so-called Brexit Adjustment Reserve this year, without the usual requirement to agree with the bloc’s executive in advance what exactly they plan to spend it on.
“We therefore raise concerns that this proposed timing and structure creates a lack of certainty where member states may choose suboptimal or ineligible measures,” said Tony Murphy, a member of the ECA, an agency set up to ensure EU funds are spent properly.
Murphy said EU countries would only report on their completed spending in September 2023 and would need to pay back money that would not be deemed eligible.
“We would like to see changes,” to improve financial management and ensure the overall effectiveness of the Brexit emergency fund, Murphy said, though he said the ECA realised those most affected by Brexit needed the money swiftly.
Based on the size of trade ties with now-departed Britain and the share of fish catch in UK waters, Ireland is due to get a quarter of the Brexit emergency allocation, followed by the Netherlands, Germany and France.
As the EU moved from a protracted Brexit crisis to grappling with the coronavirus pandemic, last year it designed another unprecedented spending plan – economic stimulus worth 750 billion euros to pull member states out of a record recession.
While EU countries need to pre-agree with the Brussels-based European Commission their spending plans to receive recovery money, Murphy said trade-offs between swift and diligent spending were on the auditors’ minds.
“What we’d be striving at is a good balance between flexibility and appropriate control structures,” he said. “They are emergency measures, we can’t wait around for years for the plans to be drafted. It’s a matter of getting the balance right.”
(Reporting by Gabriela Baczynska; Editing by Hugh Lawson)
Egypt wants to register millions of gig workers for state insurance, aid
By Menna A. Farouk
CAIRO (Thomson Reuters Foundation) – Egypt will start registering millions of gig workers in order to offer them health insurance and emergency state aid during the coronavirus pandemic, which has taken a particularly heavy toll on the nation’s ad-hoc employees, officials said.
There are at least 14 million gig workers in Egypt, and while some workers and campaigners welcomed the government’s drive, others warned that many workers could be reluctant to sign up – fearing tax and social security payment demands.
The government said it plans to identify and support 2 million gig workers in the country of 100 million people by the end of this year, labour ministry spokesman Haitham Saad El-Din said on Saturday.
“It is part of a government plan to give assistance to this segment of the society which has been majorly affected by the pandemic,” he said, adding that officials were focusing first on identifying casual construction labourers.
Gig workers who have their employment status registered on their national identity cards under a new “irregular employment” category will be given free social security insurance and be eligible for state welfare programmes.
Egypt’s state-run insurance plan includes life insurance and disability cover, as well as covering healthcare costs.
The announcement is the latest in a series of government measures aimed at shielding vulnerable groups from the economic fallout of the pandemic.
Soon after the coronavirus outbreak began, it launched a programme that supports irregular workers with monthly aid, and Egyptian President Abdel Fattah el-Sisi called for financial support to be boosted when a second virus wave took hold.
State welfare spending surged 36% in the first half of the current fiscal year, Finance Minister Mohamed Maait said recently.
ON THE BOOKS
Some daily labourers hailed the registration drive as a positive step, saying it would help bring them into the formal economy and recognise their economic contribution.
“Millions of Egyptians have been affected by this pandemic but it’s really good that the government is not leaving us behind,” said Farouk Mahmoud, 35, a temporary worker from the city of Sohag.
Still, while the latest data puts the number of gig workers at 14 million, the real number may be much higher – making registering them a daunting administrative task, said Bassant Fahmi, a member of parliament’s economic affairs committee.
Some workers may also be wary about being on the books.
“Many of them may fear being asked afterwards to pay taxes or insurance. That could mean a lot of gig workers avoiding being identified by the government,” she told the Thomson Reuters Foundation.
But besides any misgivings about being under the government’s radar, many gig workers in Egypt are more concerned about the dearth of permanent job opportunities – especially for young people – and the health of the wider economy.
“It isn’t crucial for me to have a job on my ID,” said Abanoub Lotfi, a 26-year-old driver for ride-hailing service Uber, who has a degree in commerce.
“What really matters is that the government offers me a stable job that suits my academic background and helps me afford my needs and those of my family.”
(Reporting by Menna A. Farouk; Editing by Helen Popper; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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