The unsociable FSA's Dr Pepper moment

In June 2010, the UK’s Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK

In June 2010, the UK’s Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK

Here’s what the guidance suggests…

Prevailing financial promotions regulation applies to platforms like Twitter and Facebook, and forums, blogs and iPhone applications.

It also said stuff that’s difficult to disagree with like…

It also said stuff that’s difficult to disagree with like…

Use of social media should ensure clear, fair and not misleading communication with clients.

The trouble is, I ended up thinking…

Whose financial services industry is it anyway?

Is it your advice or your clients?

Is it your advice or your clients?

Is it your product or your customers?

Is it your advice or your clients?

Is it your product or your customers?

Is is about consumer engagement or an industry that can be regulated?

Because the way in which people like to communicate is changing.

And so I thought I’d share my thoughts on…

And – like any good story – it starts like this…

…our species just couldn’t help gathering together (and still can’t)

We couldn’t help swapping stories, enjoying each other’s company and enjoying safety

in numbers

We’ve always liked to congregate together in order to exchange goods and services

Or congregate around shared values and beliefs

And, generally, have a good time

Language

Language

Language

Technology

Language

Technology

Language

Technology

Means of distribution

Language

Technology

Means of distribution

Language

Technology

Means of distribution

Cash

Technology

Technology

Means of distribution

Technology

Means of distribution

Cash

Technology

Technology

Means of distribution

Technology

Means of distribution

Cash

Now…because it relies on the transmission of a message via a medium…

…mass media content needs to be manufactured

So, at one end of the model, there’s an individual or organisation that wants to transmit something…

Which means they have to decide on the content of a message…

And select the media by which they intend to transmit that message…

In order to reach an individual at the other end of the process…

…with access to the means to receive and understand the

message

So the rules of engagement are determined by those with the ability to gain access to the

medium…

…while consumers

of content are subject to

those rules

Web 1.0 continued this pattern

But Web 2.0has entirely changed the

potential of this role

Web 1.0 continued this pattern

That’s because Web 2.0 has made the ability to publish content freely available

Technology

Means of distribution

CashSo cash is no longer abig barrier. The mainInvestment is time.

Technology

Means of distributionThe network for

publishing and distributionis readily accessible

TechnologyWhich just leaves you

with the means requiredto publish content…

And, these days, a mobile device is all that you need…

So the rules of engagement are determined by those with ability to gain access to the

medium…

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…

You end up with a model where – so long as they’re prepared to invest the time – individuals possess the same potential as organisations to publish content via platforms

(As in socialist – everyone who’s able to can participate equally in a common means of

sharing and publication)

Which means the social web offers the equivalent of this…

And this…

And this…

Because we’re able to real-ise offline interaction online via social platforms

Opting to participate in as few…

Or as many…

As we like

Which brings me neatly back around to the guidance for the use of social web platforms by the UK’s Financial Services Authority (FSA)

By choosing to treat social web platforms and tools as a medium that’s just like traditional mass media…

The FSA is focusing its attention on the use of the social web as a means of pushing promotional messages…

Rather than encouraging the use of the medium for a vastly more useful ambition:

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

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

However people want to

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

However people want to and not just how the FSA would prefer them to

The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as…

The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as…

The Dr Pepper moment

But the FSA needs to pay attention to its own statutory objectives, which are…

Market confidence: Maintaining confidence in the financial system

Market confidence: Maintaining confidence in the financial system

Public awareness: Promoting public understanding of the financial system

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

And the FSA needs to heed its own principles of good regulation too…

Proportionality: The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions

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

Because by paying a disproportionate amount of attention to prevention of the Dr Pepper moment…

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

Like the way Starbucks customers help the coffee-shop brand enhance and design new products and

services

Or Lego enables its customers to design the kind of products that they’d like

to buy themselves

Or the way in which 37Signals enables greater transparency and service

experience for clients thanks to tools like Basecamp

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…

And even effect improvements in facilities by

encouraging owners of businesses to address issues

about the quality of their service

Consumer participation makes for better regulation

And besides…

The use of social web platforms is only going in one direction

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.

So consumer habits are changing…

So consumer habits are changing…Consumption of content is changing…

So consumer habits are changing…Consumption of content is changing…And consumer expectations of businesses are changing

Which means the FSA cannot ignore its own principle of good regulation for innovation:

Which means the FSA cannot ignore its own principle of good regulation for innovation:

Allowing scope, where appropriate, for different means of compliance so as not to unduly restrict market participants from launching new financial products and services

…when the most significant participant in the marketplace always has been – and always will be – consumers

If the FSA continues to insist on regarding the social web primarily as a means of pushing promotional messages

The rules of engagement will be determined by consumers with the ability to gain access to the

medium…

…while regulated businesseswill 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…

And consumers will just findsome other way of obtaining

what they want instead

Now that’s what I call a Dr Pepper moment

6: Financial promotions industry update No 05 (June 2010), Financial Services Authority22, 23 and 66: Campfire image by Kara Brugman24, 67 and 105: ‘Al mercato di campo de' fior’ by Pyno Moscato25: Vaulted roof interior by Tim Caynes26 and 68: ‘Lamb & Flag’ by Julia Manzerova 29-36: ‘Manuscript’ by Liz Muffet37-40: Hoe’s one cylinder printing press image, Wikipedia41-44: TV aerial image by Víctor Nuño60: iPhone image by William Hook110: Dr Pepper can, Coca Cola Great Britain press centre

Photography credits and sources