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Home » Daily Briefing » Daily briefing - 26 April 2019

Daily briefing - 26 April 2019

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Banks, Facebook is making a major pitch for your business. For now, Facebook is just after your marketing business, and it's doing so in language that is a model of obfuscation and mistruth. Yes, a new survey of 18 to 34 year olds in the US, conducted for Facebook by Accenture, reports that this group want flexible finance, casual convenience and the human touch. (Quite why a survey was needed to find this is not clear, not least because Facebook often seems to know a lot about its users.) The survey also suggests that "When checking account consumers ages 18-34 were asked which online sources they have used to learn about retail banking products, the Facebook family of apps was selected most and chosen more than any other site, app or service," says the report. The takeaway from the report — aimed naturally at Facebook's customers, who are marketers — is that marketers can best reach their customers by exhibiting a human touch: "For just under half (46%) of 18-34 year old checking account consumers, the trustworthiness of a bank is the main criteria considered when choosing which to join. And with empathy and compassion seen as important signifiers of trustworthiness for this group, there's an opportunity for brands to build trust by exhibiting a more human touch — whether that's by aligning with causes important to them, offering personalized tips on how to manage money or providing people with the tools to increase their financial literacy." If there's any human touch at work here, it's Mark Zuckerberg's fingers tightening around your wallet. Note the language: exhibit a human touch, not express it. Use empathy and compassion as signifiers of trust. The promo could not more clearly confuse personalisation with the human touch. Banks, please hire people that can see through this double speak, or else welcome yourself to the robot age.

Ross McEwan is to step down from RBS after a six-year tenure. The share price has fallen almost a third since he took the reins and the bank has failed to shake the reputational damage that ensued when RBS briefly rose to the very pinnacle of world banking prior to the northern financial crisis. Despite the bank's insistence that it has moved on from those days, there's still fallout to come, in particular from the class action lawsuit being prepared against the RBS unit that was supposed to restructure small businesses in peril, but instead put many out of business. The FT reports: "The anger was underlined by shareholder comments at its sprawling Gogarburn headquarters near Edinburgh on Thursday, with one declaring: 'I can feel the anger, the frustration and the resentment that's been left over from around 2007 to 2008.' Clive Murray, a former customer of RBS's scandal-hit former small business restructuring unit, accused the bank of being 'conflicted, evil, greedy and dishonest'."

There's a general rule that when you find yourself in a pit, stop digging. Someone needs to tell this to Swedbank, which revealed this week that it is — drum roll — setting up a unit to tackle financial crime. We'll just leave that there by itself. "The bank also revealed on Thursday that it had hired law firm Clifford Chance to lead its internal investigation, helped by consultants FTI. That is in addition to a much-criticised and heavily redacted report from consultants Forensic Risk Alliance that focused only on 50 customers named by SVT in a programme in February that started the scandal. Swedbank's board has also retained Swedish lawyer Biorn Riese as an external adviser and local PR firm Kreab to help "in the work of restoring confidence in the bank". That's right, Swedbank is hiring a PR firm to try to renew public confidence in the bank.

How are these challenger banks going to make money, given that most of them are shying away from lending money? A clue comes from Monzo's new savings account which is offered in partnership with OakNorth. Although SME-focused, OakNorth currently offers a personal savings account known as an ISA, a UK-specific tax free savings account that can be used by individuals to, for example, build a personal penion. The OakNorth ISA can be accessed through the Monzo app. As the FT points out, Monzo is depending (in a sense) on customer apathy. The rate offered is 1.14 percent, less than on offer through for example Raisin, and less than the 1.44 percent that OakNorth offers itself. The 40 basis point difference will be split roughly equally between Monzo and OakNorth.

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