The unsociable FSA's Dr Pepper moment

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Created by Ian Thomas and originally the basis of a webcast for BrightTalk in the UK, 'The unsociable FSA's Dr Pepper moment' explains why the UK's Financial Services Authority’s (FSA) stance on the use of the social web by regulated businesses is counter-inuitive to its statutory objectives and principles. It explains why the application of social tools can help increase consumer confidence in the UK financial services industry and improve consumer protection.

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The unsociable FSA's Dr Pepper moment

  1. 4. In June 2010, the UK’s Financial Services Authority (FSA) issued guidance intended for regulated financial services businesses in the UK
  2. 5. 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…
  3. 6. Prevailing financial promotions regulation applies to platforms like Twitter and Facebook, and forums, blogs and iPhone applications.
  4. 7. It also said stuff that’s difficult to disagree with like…
  5. 8. 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.
  6. 9. The trouble is, I ended up thinking…
  7. 10. Whose financial services industry is it anyway?
  8. 11. Is it your advice or your clients?
  9. 12. Is it your advice or your clients? Is it your product or your customers?
  10. 13. 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?
  11. 14. Because the way in which people like to communicate is changing.
  12. 15. And so I thought I’d share my thoughts on…
  13. 20. And – like any good story – it starts like this…
  14. 22. … our species just couldn’t help gathering together (and still can’t)
  15. 23. We couldn’t help swapping stories, enjoying each other’s company and enjoying safety in numbers
  16. 24. We’ve always liked to congregate together in order to exchange goods and services
  17. 25. Or congregate around shared values and beliefs
  18. 26. And, generally, have a good time
  19. 30. Language
  20. 31. Language
  21. 32. Language Technology
  22. 33. Language Technology
  23. 34. Language Technology Means of distribution
  24. 35. Language Technology Means of distribution
  25. 36. Language Technology Means of distribution Cash
  26. 38. Technology
  27. 39. Technology Means of distribution
  28. 40. Technology Means of distribution Cash
  29. 42. Technology
  30. 43. Technology Means of distribution
  31. 44. Technology Means of distribution Cash
  32. 45. Now…because it relies on the transmission of a message via a medium…
  33. 46. … mass media content needs to be manufactured
  34. 47. So, at one end of the model, there’s an individual or organisation that wants to transmit something…
  35. 48. Which means they have to decide on the content of a message…
  36. 49. And select the media by which they intend to transmit that message…
  37. 50. In order to reach an individual at the other end of the process…
  38. 51. … with access to the means to receive and understand the message
  39. 52. So the rules of engagement are determined by those with the ability to gain access to the medium…
  40. 53. … while consumers of content are subject to those rules
  41. 54. Web 1.0 continued this pattern
  42. 55. But Web 2.0 has entirely changed the potential of this role Web 1.0 continued this pattern
  43. 56. That’s because Web 2.0 has made the ability to publish content freely available
  44. 57. Technology Means of distribution Cash So cash is no longer a big barrier. The main Investment is time.
  45. 58. Technology Means of distribution The network for publishing and distribution is readily accessible
  46. 59. Technology Which just leaves you with the means required to publish content…
  47. 60. And, these days, a mobile device is all that you need…
  48. 61. So the rules of engagement are determined by those with ability to gain access to the medium…
  49. 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…
  50. 63. 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
  51. 65. (As in socialist – everyone who’s able to can participate equally in a common means of sharing and publication)
  52. 66. Which means the social web offers the equivalent of this…
  53. 67. And this…
  54. 68. And this…
  55. 69. Because we’re able to real- ise offline interaction online via social platforms
  56. 70. Opting to participate in as few…
  57. 71. Or as many…
  58. 72. As we like
  59. 73. Which brings me neatly back around to the guidance for the use of social web platforms by the UK’s Financial Services Authority (FSA)
  60. 74. By choosing to treat social web platforms and tools as a medium that’s just like traditional mass media…
  61. 75. The FSA is focusing its attention on the use of the social web as a means of pushing promotional messages…
  62. 76. Rather than encouraging the use of the medium for a vastly more useful ambition:
  63. 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
  64. 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 However people want to
  65. 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 However people want to and not just how the FSA would prefer them to
  66. 80. The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as…
  67. 81. The FSA is seeking to regulate for the worst that can happen and not the best. Otherwise known as… The Dr Pepper moment
  68. 82. But the FSA needs to pay attention to its own statutory objectives, which are…
  69. 83. Market confidence: Maintaining confidence in the financial system
  70. 84. Market confidence: Maintaining confidence in the financial system Public awareness: Promoting public understanding of the financial system
  71. 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
  72. 86. And the FSA needs to heed its own principles of good regulation too…
  73. 87. Proportionality: The restrictions we impose on the industry must be proportionate to the benefits that are expected to result from those restrictions
  74. 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
  75. 89. Because by paying a disproportionate amount of attention to prevention of the Dr Pepper moment…
  76. 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
  77. 91. Like the way Starbucks customers help the coffee-shop brand enhance and design new products and services
  78. 92. Or Lego enables its customers to design the kind of products that they’d like to buy themselves
  79. 93. Or the way in which 37Signals enables greater transparency and service experience for clients thanks to tools like Basecamp
  80. 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…
  81. 95. And even effect improvements in facilities by encouraging owners of businesses to address issues about the quality of their service
  82. 96. Consumer participation makes for better regulation
  83. 97. And besides…
  84. 98. The use of social web platforms is only going in one direction
  85. 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.
  86. 100. So consumer habits are changing…
  87. 101. So consumer habits are changing… Consumption of content is changing…
  88. 102. So consumer habits are changing… Consumption of content is changing… And consumer expectations of businesses are changing
  89. 103. Which means the FSA cannot ignore its own principle of good regulation for innovation:
  90. 104. 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
  91. 105. … when the most significant participant in the marketplace always has been – and always will be – consumers
  92. 106. If the FSA continues to insist on regarding the social web primarily as a means of pushing promotional messages
  93. 107. The rules of engagement will be determined by consumers with the ability to gain access to the medium…
  94. 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…
  95. 109. And consumers will just find some other way of obtaining what they want instead
  96. 110. Now that’s what I call a Dr Pepper moment
  97. 112. 6: Financial promotions industry update No 05 (June 2010), Financial Services Authority 22, 23 and 66: Campfire image by Kara Brugman 24, 67 and 105: ‘ Al mercato di campo de' fior’ by Pyno Moscato 25: Vaulted roof interior by Tim Caynes 26 and 68: ‘Lamb & Flag’ by Julia Manzerova 29-36: ‘Manuscript’ by Liz Muffet 37-40: Hoe’s one cylinder printing press image, Wikipedia 41-44: TV aerial image by Víctor Nuño 60: iPhone image by William Hook 110: Dr Pepper can , Coca Cola Great Britain press centre Photography credits and sources

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