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

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

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

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

Encoder Message Medium Decoder
In order to reach an individual
at the other end of the process…

Encoder Message Medium Decoder
…with access to the means to receive
and understand the message

Encoder Message Medium Decoder
So the rules of engagement are
determined by those with the ability to
gain access to the medium…

Encoder Message Medium Decoder
…while
consumers
of content are
subject to
those rules

Encoder Message Medium Decoder
Web 1.0 continued this pattern

Encoder Message Medium Decoder
But Web 2.0
has entirely
changed the
potential of this
role
Web 1.0 continued this pattern

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

Free
Technology
Means of distribution
Cash
So cash is no longer a
big barrier. The main
Investment is time.

Free
Technology
Means of distribution
The network for
publishing and distribution
is readily accessible

Free
Technology
Which just leaves you
with the means required
to publish content…

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

Encoder Message Medium
So the rules of engagement are
determined by those with ability
to gain access to the medium…

Encoder Message Medium EncoderMessage
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…

Provider Content Platform ProviderContent
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

Decoder Medium EncoderMessage
The rules of engagement will be
determined by consumers with the
ability to gain access to the medium…

Decoder Medium EncoderMessage
…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…

Decoder Medium EncoderMessage
And consumers will just find
some 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 Authority
22, 23 and 66: Campfire image by Kara Brugman
24, 67 and 105: ‘Al mercatodi 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