Issue № 96 | London, Sunday 5 May 2024
📸 First, flashback to October 2022 when the UK’s Advertising Standards Authority banned HSBC’s climate ads. This week, the scrutiny of green claims shows no sign of abating as HSBC - again - faced a backlash. Is that what made the last five years so ‘intense’ for Noel Quinn?
👉🏻 Now, read on to learn why:
① If you get service wrong and you’ll likely lose a customer.
② Marketing should be tightly integrated with your customer service function.
③ The big City bonus is back.
④ Institutional capital markets players are embracing blockchain.
⑤ The foundations for a post-search online world are being laid now.
⑥ Humans need to be trained and empowered to manage AI tools.
⑦ Power comes from economic prosperity and technological sovereignty.
What's new
Bank of Ireland made a significant investment in its customer service this week, FinTech Futures reports.
In short:
“Bank of Ireland is investing €34 million into its telephony and customer relationship management systems in a bid to enhance its customer service operations.”
“The funds will furnish the bank’s 2,800 workforce with access to ‘quick single view of customer data’, and power the implementation of voice biometric technology to ‘improve customer authentication for better fraud protection and reduce call waiting times’.”
“The initiative seeks to strike improvements to the bank’s self-service functions, such as requesting a new card, changing account information, and ordering duplicate statements.”
Why it matters
News of this investment broke just a couple of days after it was revealed that the number of complaints received by the Financial Ombudsman Service had jumped by a fifth in the second half of 2023. Banking and credit complaints were the main drivers of the rise – with current accounts and credit cards making up more than 40 per cent of its cases. Both these stories matter because they remind us how - in financial services - service remains the single most important factor in ensuring customers are happy and would recommend your product.
① Get it right and you’ve earned yourself an advocate. Get it wrong and you’ll be looking to marketing to acquire a brand new customer to replace the one you just lost. But there’s not much point spending money acquiring new customers if you’re going to lose them to poor customer service shortly thereafter.
Customers don’t distinguish between an interaction with your marketing, your sales people, or your service team. These are all touchpoints with your brand and should be consistent in tone, messaging and quality.
What to do about it
Take action
First, review a couple of previous issues of IMTW to remind yourself why customer retention is better than customer acquisition and marketing is every single touchpoint your customer has with your brand.
② Now, if it’s not already the case, I suggest you take the time this week to ensure your marketing team is tightly integrated with your customer service function. That doesn’t mean Customer Service should report to your head of marketing but he or she certainly needs visibility on that team’s activities and an opportunity to influence, guide and train them if required.
Get help
InMarketing is a dynamic repository of ideas, insights and other support for senior leadership teams in finance or technology who want to drive growth.
Top stories
The other articles that are worthy of your time.
FINANCE
Goldman Sachs to scrap bonus cap for London-based staff
③ The big City bonus is back.
“Goldman Sachs is removing the cap on bonuses paid out to London-based staff in a move that could see the bank’s highest earners receive millions in extra pay. The move will bring the bank’s remuneration policy in line with its operations elsewhere in the world.”
“Several hundred staff will now be eligible for variable pay worth up to 25 times their base salary. Regulations on the bonus cap were imposed by the EU in 2014 after the financial crisis. It caps bonuses at 100 per cent of annual pay, or 200 per cent with shareholder approval.”
“The cap was removed last year as part of a broader post-Brexit push to reinvigorate the City of London amid growing concerns that the Square Mile is losing out to other international financial centres. Banks complained that the cap actually increased their costs by forcing them to offer higher levels of fixed pay.”
TECHNOLOGY
BlackRock doubles down on tokenisation
④ Institutional capital markets players are embracing blockchain.
“The world’s largest asset manager appears poised to move deeper into the tokenisation space after injecting capital into a tokenisation firm it has worked with before.”
“BlackRock led a $47 million funding round for Securitize, a company focused on bringing physical and traditional financial assets onto the blockchain, the firms said Wednesday.”
“Fintech companies and traditional finance giants have increasingly been testing out tokenisation, noting that blockchain rails can help reduce costs and improve transparency. BlackRock CEO Larry Fink has called tokenised securities ‘the next generation for markets’.”
MEDIA & MARKETING
Financial Times signs licensing deal with OpenAI
⑤ The foundations for a post-search online world are being laid now.
“The Financial Times has struck a deal with OpenAI to license its content and develop AI tools, the latest news organisation to work with the AI company.”
“ChatGPT users will see summaries, quotes, and links to FT articles. Any prompt that returns information from the FT will be attributed to the publication. In return, OpenAI will work with the news organization to develop new AI products. The FT already uses OpenAI products, saying it is a customer of ChatGPT Enterprise. Last month, the FT released a generative AI search function on beta powered by Anthropic’s Claude large language model. Ask FT lets subscribers find information across the publication’s articles.”
“OpenAI has made several deals with news organizations to license content to train AI models. Axel Springer, which publishes Business Insider, Politico, and the European publications Bild and Welt, signed a similar agreement with OpenAI to pull data from its articles. The Associated Press also allows OpenAI to train its models on their data. However, OpenAI reportedly offers between $1 million and $5 million to license content from publications, significantly less than what other companies like Apple are offering.”
WILDCARD
AI’s trust problem
⑥ Humans need to be trained and empowered to manage AI tools.
There are 12 leading concerns about AI:
Disinformation: “We have to accept that the harsh reality that disinformation will be hard to eliminate. Human vigilance and education in digital hygiene will be essential.”
Safety and security: “Awareness and preparedness will be key and for the most critical and life-and-death applications it will be important to keep humans in the loop ensuring that decisions are never fully automated.”
The black box problem: “Each application area will need to develop initiatives geared towards building transparency, which will help ease the adoption process.”
Ethical concerns: “Keeping humans, including those assembled as governance or oversight boards and teams of external watchdogs, in the loop will be essential.”
Bias: “Biases will be inevitable. It will be essential to apply human judgment and vigilance along with swift remedial action before they do damage.”
Instability: “AI systems can be sensitive to small changes, which are inevitable in the real world beyond the training dataset. The presence of alert humans to do a manual correction or over-ride will be critical in these situations.”
Hallucinations in LLMs: “Never trust or put into public use any product of a generative AI model — especially in high-stakes scenarios, such as legal documentation — without trained professionals checking it thoroughly.”
Unknown unknowns: “Unquestioningly applying AI, which itself has blind spots, is a recipe for disaster; it’s critical to ensure the human hand in guiding decisions with an awareness of the application context.”
Potential job losses and social inequalities: “The shadow of job losses and increased social inequalities hangs over the adoption of AI.”
Environmental impact: “Human judgment is needed to assess whether the benefits of, say, incorporating AI enhancements to products with good enough alternatives is worth the environmental costs.”
Industry concentration: “Concentration of power in a few firms erode trust because consumers feel locked-in, they worry about overpaying, and have privacy concerns.”
State overreach: “The concern about state overreach may lead to rejecting AI’s use even when it can be societally beneficial if used with safeguards. Testing the willingness to accept the tradeoffs will be critical to ensuring that citizens are comfortable with states using AI.”
The Artificial Intelligence Spotlight 🔦
Beautiful: Generative AI presentation software for the workplace.
Just Words: Boost user growth with continuous copy testing.
Transistor: Generate incredibly accurate transcripts for your podcast episodes.
Off cuts
The stories that almost made this week’s newsletter.
FINANCE
🔻 UBS division reportedly facing severe cost-cutting measures
📉 Santander UK profit drops and mortgage lending shrinks amid price war
🪙 Northern Trust survey: 17% of asset managers consider adding digital assets
🚓 EU Parliament to institute additional AML laws
✂️ Barclays starts cutting hundreds of jobs including in investment bank
TECHNOLOGY
💷 HSBC to invest in wealth, transaction banking technology
🦾 Blockchain researchers use AI to spot Bitcoin money laundering
🤯 Is headless banking the next evolution of BaaS?
⛓️ Fintech has hit a wall. Blockchain will break through it
👮🏻♂️ When is an asset a security (MiFID) versus a crypto (MiCA)?
MEDIA & MARKETING
🤖 AI transformation: How to prepare your marketing team
🧰 Do CMOs really understand how their teams use martech?
🍪 Cookie-free advertising: Three targeting options for modern marketers
📲 LinkedIn: Launches gaming and is the Twitter rival no one is talking about
📚 How to optimise your marketing and sales with product literature
The last word
⑦ Emmanuel Macron on the root of power:
“The challenge for Europe is economic and technological. There can be no great power without economic prosperity, nor without energy and technological sovereignty.”
Don’t settle for marketing.
Strive for InMarketing.
Wishing you a productive week,
P.S. Tomorrow is a bank holiday here in the UK, but I feel I’ve already had mine.