Hill+Knowlton Strategies

HSBC Expat Explorer has been nominated for the prestigious Webby award, and is in the running against CNN Money, mint, wikinvest and wonga for the People’s Voice award, in the financial services category.

The Webby awards is recognised as the most celebrated accolade for innovative and accomplished websites. Being a nominee alone means that HSBC is in the top 3% from over 10,000 entries worldwide.

H+K towers and the team, who have been working on Expat Explorer since its inception, are super excited about the news. From its humble beginnings as basic PDF reports, last year, the research results were taken to a new level and became a highly interactive online tool for the expat community. The work has already won a good deal of awards but this is the most high profile to date.

For those who wish to support Expat Explorer for the People’s Voice Award, it couldn’t be easier. Simply visit the website, register your vote using your email, Twitter or Facebook account – it only takes a minute. The closing date is this Thursday (26^th April) so get voting.

The awards will be presented at the end of May in New York. If you fancy getting in the spirit of the Webbys beforehand, you can check out a compilation of the ceremony’s best 5-word acceptance speeches here.

Launching the world’s first snore absorption room; creating the world’s biggest shave; reinterpreting art with technology; revealing the best place in the UK to bring up a family… As 2011 draws to a close, we take a look back month by month at some H+K Strategies campaigns and work throughout the year.

January: City & Guilds Million Extra

You're hired: Karren Brady+ City & Guilds' Chris Jones

To start the new year, preparations to launch City & Guilds first ever Apprenticeship Summit went underway early on. The aim of the campaign was to help ensure one million Apprenticeship starts by summer 2013.

In January, we commissioned a report to identify the barriers employers face in hiring apprentices with the findings discussed by key political and business leaders at the Summit, hosted by Apprentice star Karren Brady.

Nearly 100 pieces of coverage resulted from this campaign as well as a request from Professor Alison Wolf to receive a copy of the full report after seeing the articles to include in her Government review of 14-19 education.

February: Intel Remastered

Shortlisted for various industry awards, our Technology team created an exciting art campaign- Intel Remastered to showcase the creative application of Intel technology. The project saw 13 modern artists reinterpret iconic masterpieces using digital technology and techniques.

Pushing the boundaries of art and creating one of the most talked about art events on the year, the stories and inspiration behind classics such as Picasso’s ‘Guernica’ and Da Vinci’s ‘The Last Supper’ were retold and presented to a digital-savvy audience.

Read the rest of this entry »

Following this afternoon’s Budget, H&K’s head of Financial & Professional Services, Ben Curson, provides his initial thoughts on what today’s announcements will mean for businesses, big and small.

Ben Curson - Head of Financial & Professional Services

“Making things happen…not making things up”. So said George Osborne in a business friendly budget delivered from Parliament today. Well, we’ll see about that in the fullness of time but it seemed clear to me on first listening that the Chancellor was pitching particularly to small business and entrepreneurs. He proposed a range of tax simplification measures, tax breaks and additional enterprise zones to encourage starting and growing businesses. Should this initiate a surge in enterprise and economic growth, the Chancellor will have every reason to trumpet his success as a man doing everything he can (with very little room for giveaways) to stimulate the economy.

Not everyone will be pleased of course, especially not the banks. One can’t help but feel they will be slightly irritated by the fact the bank levy will be increased despite an understanding that their tax treatment would remain stable in return for  increased lending to small business – 15% according to the Chancellor today and detailed on page 76 of the Budget docs.

George Osborne - "A Budget for making things, not making things up"

The other big business losers in tax terms are the oil companies, who will pay a lot more in tax in order to fund the cut in fuel duty – perhaps the ‘rabbit out of the hat’ moment in today’s announcement, and something that it seems the Opposition weren’t really expecting judging by Ed Milliband’s immediate response.

What else? Personally, I’m very pleased to see an open acknowledgment that Britain has been dropping down the league in terms of competitiveness (4^th to 12^th according to the Chancellor), and that the Government is doing something to address educating and upskilling the workforce. There appear to be specific steps to make Britain a more viable, cost effective place to do business in an increasingly global marketplace to attract business from overseas, which as Britain comes to terms with its place in the new world order is absolutely fundamental.

I do believe simplifying and incentivizing business rather than just cutting spending is the way that Britain will recover from the financial crisis of the last few years. I was enormously reassured therefore, as you would expect in my position, that there was a clear intent for the “City of London to stay a leader in financial services”. For their part, the markets have seemed largely unmoved by the Chancellor’s proposals, though bank shares have dropped slightly as you’d expect from the bank levy announcement

While the devil is always in the detail and many of our clients will be analyzing the budget book in-depth on behalf of their own business and their clients’, it seems the Chancellor made a very pro-business speech. Whether the consumer will feel as positive as they become increasingly squeezed by rising inflation and commodity prices will remain to be seen, especially in the forthcoming elections in May. I suspect not.

Hello Again All. There’s a distinctly political theme to this week’s Financial & Professional Services Friday Five, in part because of world events at present. Thanks this week to Ed, Jonathan, Ross and Linzi:

Guess the budget…Actually don’t, because it’s impossible. But it’s a task we’re frequently asked to do along with most of the lobby. So far the Independent and Evening Standard have led the pack with two of the most intriguing proposals: ‘Osborne’s secret plan to raise tax – and scrap national insurance’ and ‘Airport tax to rise as Osborne looks for funds.’ Both proposals seem plausible and would have a major impact on all businesses.

Come on George, What's in it this year?

Are they in keeping with the ‘Budget for growth’ theme we covered last week though? The Indy argued the effective abolition of National Insurance would inevitably create winners and losers and implementing the changes would be bureaucratic and take time. It’s also thought that changes to the benefits system touted by Iain Duncan Smith have made the changes to NI more likely.

The Indy also points out this could be portrayed as a tax hike, but SMEs have long campaigned for fewer taxes to alleviate administrative costs and will probably welcome this measure with cautious optimism. The increase in airport duty will irritate the aviation industry though and they’ve already indicated this would affect growth. As ever, the devil will be in the detail though.

On a separate note, did anyone see Ed Miliband at PMQs this week? A marked improvement we think. Things may be heating up for Cameron and co.

Collective Action…The terrible events in Japan have seen the international community mobilise to send aid and rescue workers to the worst hit areas of the country. The international response has not been limited solely to the humanitarian crisis though. This week the G7 took collective action to help weaken the Japanese yen. This is the first time that G7 has cooperated in such a way since 2000, highlighting the extent of international sympathy for the country.

The earthquake has caused significant damage and disruption to Japan’s economy. Normally when the economic prospects of a country weaken, so does the currency. However, in anticipation of Japan’s insurance industry and international companies selling their foreign assets and sending funds home for reconstruction the value of the currency has been driven up. As an export driven economy, Japan needs its goods to remain internationally competitive and the G7 nations have agreed to sell yen to help lower the currency value.

The task of recovering from these events is of course huge, however the coordinated response appears to have had an immediate impact with the currency down from above Y79 against the US dollar to below Y81.

Will Hutton’s report make a difference?…Last week we brought you Lord Hutton’s final review of pension reform in the public sector. This week we have more public sector news for you from Will Hutton’s (confusing we know) report on ‘Fair Pay in the public sector’, published on Tuesday. Hutton was charged by the government with finding a way to make public-sector pay fairer by looking at the salaries of so-called “fat-cat” bosses. In an interview with the BBC Hutton stated the report was a view to finding “a new settlement between public sector bosses and the taxpayer”.

Will Hutton published his report on public sector 'fat cats' this week

The main body of the report focuses on the idea of performance linked pay. Essentially what this would mean is that highly paid public sector bosses would be subject to performance targets to ensure a high level of service is met in order to back up the cash the earn in a year. Failure to meet these targets would result in a chunk of their pay being taken away. Additionally, successfully meeting all set targets would mean being rewarded.

Again though, the devil will be in the detail and the challenge lies in its implementation.

The return of the UN?…As the crisis in Libya has unfolded it’s perhaps fair to say the international response has been somewhat slow. However, things are finally moving following the passing of a UN resolution allowing “all necessary measures” except an invasion – but including a no-fly zone. This seems to have halted the move by loyal forces to recapture the east of the country for now.

What else does this tell us though? Arguably, the United Nations has had a few lean years following the fallout from the Iraq war and Resolution 1441. Now though, could today’s announcement signal a re-establishing of its role in world politics? Definitely one to watch

Robert Peston - "No enthusiasm" to write more on bankers' pay

Robert’s bored, but is the public?…Robert Peston blogged yesterday on the disclosure of the pay of high earning workers at RBS. However, it would appear he, along with some others in the media are getting a little bored of this subject. Peston wrote, “It is with no real enthusiasm that I write once again about bankers’ pay. If you feel you’ve read this story before, well I would understand”. Naturally, that provoked a fair few comments at the bottom of his post.

Clearly the issue is still emotive for many (witness Simon Jenkins’ article on Tuesday) but for now the spotlight has by and large moved elsewhere towards the Budget, the AV campaign, and ongoing global events. It looks as though some in the City (or #planetbanker as the Mirror’s Clinton Manning calls it) can grab a little breathing space, at least for now.

Hello All! Welcome to another edition of the Financial and Professional Services team’s Friday Fiver. Big thanks this week to Dave Chambers, Peter Roberts, Rachel Griffiths, Matt Battersby, Helen Searle and Clare Coffey.

This week we look at the new ASA rules for corporate websites; the fairness of the ECJ ruling and its impact on insurance; the shortcomings of the FSA’s Retail Conduct Risk Outlook; Mr Murdoch’s acquisition of the remaining stake in BSkyB; the impact of the rising cost of children and what Charlie Sheen could learn from Bob Diamond.

ASA Is Watching You

On 1st March the Advertising Standards Authority (ASA), the watchdog for the advertising industry assumed new powers to regulate “companies’ own marketing claims on their own websites and in other non-paid for space they control“, as the UK Code of Non-broadcast Advertising was rolled out to cover online properties. The industry reaction has been mixed and there has been a good deal of chatter online about the impact this will have for companies, but it appears that the ASA will take a fairly collaborative approach in enforcing these rules. Regardless though there are plenty of website owners and social media moderators wondering what this means for them, plenty of lawyers doing their best to interpret and not much clarity so far. Certainly there will be a few social media moderators watching what they retweet or share on their Facebook pages.

Is this good for the industry? Probably and certainly for advertisers (and their lawyers) targeting children and young people. Is this good for the internet? who knows – it’s certainly not the free and unregulated space that it was before. One would assume that the originators of the 4,500 complaints that the ASA has recorded since 2008 will be happier. Though from the perspective of a PR man that has heard many times the exasperated cry that ’the ad agency just doesn’t get what we do’ I’d be surprised if the first adjudications have anything to do with the work of a PR agency.

Looking for a cheap deal…?

Women drivers braced themselves for the full impact of equality this week with the European Court of Justice’s ruling that men and women must be treated the same by insurers when assessing risk.  According to the Association of British Insurers, women under the age of 25 could see their car insurance premiums rise by an eye-watering 25%, although men will pay slightly less than they do now.  As we all know, despite the tedious jokes, women are statistically far better drivers than men and therefore a safer bet for insurers. 

Show's Over Sheilas

But it’s not just the Sheilas who are upset.  The ruling has drawn extensive criticism from all from all quarters, from Conservative MPs to consumer groups, to the unlikely (or so you might think) ABI themselves.  Although their members might stand to gain from an overall increase in premiums paid to the industry, the potential disruption along with the marketing advantages of being able to offer competitively priced products, mean the ‘mistaken’ ruling is something they’ve been looking to avoid.

Also, the implications of the ruling are not just confined to car insurance.  Dr Ros Altman predicts that the eight out of ten annuities currently bought by men (less relevant if you are a woman and likely to live longer) are also likely to take a hit as a result of the ruling.

All in all, there appear to be very few winners from this ruling, and gender could be the thin end of the wedge. As Catherine Barton from Ernst & Young points out in the Telegraph, there are many other ‘discriminatory’ factors currently being used to measure that may come under more scrutiny.  So, the question is, when exactly does equality become unfair? 

Less risky conduct?

This week the Financial Services Authority issued its first ever Retail Conduct Risk Outlook. Previously incorporated into the FSA’s Financial Risk Outlook which accompanies its Business Plan, the separation of conduct risk from prudential risk anticipates the FSA’s separation into two new bodies in 2012.

Conscious of recent conduct failures that have had a dire impact on consumers’ experience of financial services and products – Payment Protection Insurance (PPI) mis selling, unclear mortgage terms, and bank’s complaints handling to name a few, the RCRO is an attempt to mitigate and identify potential conduct failure in the future. However, reviewing the RCRO’s list of current issues, emerging risks and potential concerns it is striking how few of them are in any way new. Indeed, most of the risks identified are covered by work already underway as part of the Mortgage Market Review and Retail Distribution Review. Therefore it will be crucial that in identifying new conduct risks, the nascent Financial Conduct Authority must have the tools and powers to do more than shine a light on potential risks and be able to intervene early to avoid market failure. Failure to do otherwise will result in history repeating, albeit under the eye of an authority with a different name.

Rupert completes his Monopoly set….

Pass Go and collect £8bn!

Yesterday’s news that Rupert Murdoch will be allowed to purchase the remaining stakein BSkyB throws up a number of issues. There were two chief complaints made by other media outlets. One, that the deal impinges on the ‘plurality’ of media outlets in the UK by giving News Corporation a far larger stake against their rivals. As Andrew Neil argued, this increases their ability to cross-sell and to subsidise their loss-making newspapers, damaging the position of their broadsheet and tabloid rivals. And two, that the purchase of Sky News (albeit in a separate company of sorts) would mean a return to the ‘bad old days’ of the 1980’s when broadcast news was controlled by just two superpowers, the BBC and ITN.

On a day’s reflection, the first of these is likely to be a far bigger problem than the second, for which there is a strong counter-argument. Regardless of the influence Mr Murdoch will have over Sky News, it still represents a third news broadcaster and in that sense the picture is actually better than the ‘bad old days’ of just two television news outlets. It’s also worth noting that the deal is far from agreed yet – as The Times notes today, investors are queuing up to extract a high price from News Corp for their shares. And one final question as well – what does this mean for the BBC? News Corp has now become an entity twice the revenue size of the Beeb. Does that mean the constant pressure on Auntie to cost cut and justify the license fee will diminish?

Not tonight darling, we really can’t afford it…

Interesting that Aviva reckons this is fundamentally impacting parents’ decision on whether to have more children or not. The report found that 66 per cent of parents would put off having more children because of financial constraints.

It’s a fact backed up by ONS statistics, which show that the once typical average family size of 2.4 children, made famous in the 90s TV Show… is now in fact 1.7 children.

The gloomy picture was reinforced by recent Markit Household Finance Index showed that more than third of households are feeling worse off in the last month, backing up the financial concern that could be literally constricting families up and down the country. 

Why never fat cat actors?

Vanity Fair recently published their list of Hollywood top earners in 2010. Top of the list is James Cameron who earned $257m in 2010, mainly on the back of the phenomenal success of Avatar. Johnny Depp and Steven Spielberg were next in the list, earning $100m and $80m respectively.

These figures are so high they might make even the most hard nosed banker blush. So why were there no newspaper headlines slamming ‘greedy actors’ and ‘fat cat’ directors? Why do we accept high pay for some professions and not others? It might  be said that,  unlike bankers, actors have not harmed the world in any way but can we really say that about Jennifer Aniston who appears at number 25 in the list having made $24.5m in 2010? Anyone who believes that obviously hasn’t seen her new rom-com ‘classic’, ‘Just go with it’!

One actor’s pay has been making the headlines this week though as Charlie Sheen continued to self-destruct on US TV. Amongst the many revelations from these interviews came Sheen’s demand that his pay for appearing on ‘Two and a Half Men’ be increased to $3m per episode. This has caused some criticism in an America where many are still feeling the effects of the recent recession.

So could Charlie Sheen’s behaviour lead to more questioning of actors salaries and their benefit to society? If so, then perhaps they should look to Bob Diamond’s expert performance at the Treasury Select Committee in January for guidance on how to manage this scrutiny. Comparing some of his comments to those of Charlie Sheen this week, they could certainly do a lot worse!

Bob Diamond on banks apologising for the crisis:

“There was a period of remorse and apology for banks, that period needs to be over. We need banks to be able to take risk, working with the private sector in the UK.”

Charlie Sheen on not apologising for anything:

“I’m tired of pretending like I’m not special. I’m tired of pretending like I’m not bitchin’, a total freakin’ rock star from Mars.”

Bob Diamond on the perceived invincibility of banks:

“Banks should be allowed to fail…It’s not okay for taxpayers to have to bail out banks.”

Charlie Sheen on the perceived invincibility of Charlie Sheen:

“Dying is for fools, amateurs.”

Bob Diamond on bonuses:

“I would like to be able to isolate bonuses. I am a businessman trying to run a business. I have to balance what our owners want, what our customers want… I am aware of the emotion around bonuses and we will show as much restraint as we can…we are responsible citizens of the world and the United Kingdom.”

Charlie Sheen on pay:

“Blame the studio for giving me this much dough knowing who they were giving it to.”

More from Bob Diamond on bonuses:

“We have to balance the responsibility we have and the recognition of the environment we operate in”

More from Charlie Sheen on… well….. we’re not really sure

“I am on a drug. It’s called Charlie Sheen. It’s not available because if you try it, you will die. Your face will melt off and your children will weep over your exploded body.”

*Some great research from our client Aviva, but in the interests of transparency we should state that this is not our work

The power of Four in traditional business...

Investment bank UBS turned the spotlight onto supermarkets this week with a report claiming food inflation is higher in the UK than anywhere else in the OECD. The report inferred this was the result of the ‘Big Four’ supermarkets (Tesco, Asda, Sainsbury’s & Morrisons) using their market dominance to inflate prices above the actual increases stemming from food inflation.

By contrast, in other European markets where the food market is more segmented, prices haven’t risen as fast – strong stuff, which led to a swift response from trade body the British Retail Consortium, as well as a wealth of media comment.

This issue got me thinking though, for it’s not only in the supermarket sector where four big players hold sway in the UK. Accountancy is dominated by a Big Four (Deloitte, PwC, KPMG & Ernst & Young) and so is mobile telecoms (Vodafone, O2, Orange and T-Mobile, now joined commercially as ‘Everything Everywhere’).

High street banking was similarly controlled by Four (Barclays, HSBC, Lloyd’s and RBS) until Santander went on its recent spending spree. Four then, seems a very powerful number in the business world, even if the positive impact of it on consumers remains up for debate.

But what about the power of Four on the internet?

As my Issues & Crisis colleague Duncan Gallagher pointed out yesterday, the evidence for the power of Four on the internet seems scant to non-existent. Instead, it increasingly seems to be the power of One.

...versus the power of One on the internet

Look at the big internet success stories – Google, Amazon, eBay, Facebook, Twitter. Yes, some of them have competitors but they have much smaller market shares and/or offer a more limited suite of products.

Governments historically tend to get quite nervous about monopolies developing in traditional offline sectors and so do consumers. Curiously though, there doesn’t appear to be a similar feeling about these dominant online brands yet. Nor have there been sustained questions about whether the power of the digital One is good for consumers.

Will this change?

Maybe, although who exactly would initiate a monopoly ruling on a transnational, digital company is unclear. There is one other question though.

Last week we blogged about a possible bubble forming amongst social media and online companies as investors queued up and valuations soared. So here goes – if you were an investor considering a stake in one of these companies, how much risk would you attribute to a potential monopoly investigation and would that affect your decision to take the plunge?

Hello All! Welcome to another edition of the Financial and Professional Services team’s Friday Fiver. Big thanks this week to Linzi Goldthorpe, Karen Butcher, Chris Pratt and Jonathan Henderson.

Joanna gears up again…Monday saw the Bar Council and Law Society launch their campaign against government cuts to legal aid. The lobbyist group Sound off for Justice, which is championed by actress and rights activist Joanna Lumley, aims to put pressure on the government to reconsider the cuts which were unveiled in November of last year.

Guess who's back for round two?

Currently the UK provides free legal advice for those people fighting civil cases that don’t have sufficient funds to cover legal costs. The Ministry of Justice plans to cut the £2.1bn legal aid bill by £350m within four years, reducing the number of people of people able to seek help by up to 500,000.

So far the propositions have been dubbed ‘brutal’ and ‘devasting’ by the legal community who are calling for the plans to be scrapped. Enter Joanna to weave her magic again…

Bribery is still bribery…Some of us attended the British American Business’s Law Forum UK Bribery Act event this week. Given the new date for the guidelines on the Act are yet to be confirmed the seminar focussed on what businesses need to  be thinking about before implementation comes into force.

The focus was very much on laying minds at rest following the confusion around the Act’s implementation. Two messages were clearly played out through the seminar:

1. Facilitation payments always have and always will be a crime. The Bribery Act isn’t changing that.

Care is still needed when choosing a hotel for business guests

2. The reaction to the Act’s hospitality element has been blown well out of proportion. Sensible and proportionate expenditure remains lawful but flying a potential new business partner halfway around the world with their family and putting them in a deluxe hotel is not.

Confusion remains on events such as the Olympics though – the clock is ticking on this one, so watch this space.

Confused about petrol…This week we received an email from price comparison site confused.com about their partnership with The Sun for their new ‘Do Your Duty’ campaign. It seems to have won a lot of support from readers of the paper and has been well shared on Confused.com’s website. This week’s inflation figures can only have heightened support for it as well.

The campaign looks like a no-brainer for Confused.com then doesn’t it? We do wonder though if it doesn’t look somewhat self-serving for organisations if they choose an issue that isn’t well-aligned with their business. We’ve been running a successful campaign for Hymans Robertson on pension reform recently. But then being pension consultants they can lead that debate and offer well-respected opinions – the risk of falling short in the credibility stakes is low.

Well done to confused.com for showing the nerve to embrace an issue though. Not all organisations are willing to do so, but we hope they build on this position and develop their credentials as an organisation that represents consumers interests in keeping prices low, including insurance prices.

Goodbye Western investment returns…Barely a day goes past without reports of the fundamental shift in global wealth and productivity from the developed to the developing world.

This week the London Business School weighed in. Their new report indicated that the equity risk premium (the additional return generated by investing rather than taking a risk-free option such as cash) is set to fall in developed markets. They believe that investors can expect a future return of around 3 to 3.5% from equities in the developed world, the lowest rate in 110 years, down on the historic average of 4.5%.

The report comes as Barclays Capital predicted foreign investors can however expect annual returns of 10.5% from developing economies. The findings are likely to have significant repercussions for where western pension funds invest their money as younger generations search for returns further afield than the western blue chips that have traditionally been a staple of pension portfolios.

Money Saving ‘Expert’…Martin Lewis and his website have been a big success in recent years, by offering a new approach to personal finance. Lewis has binned the jargon and offers simple rules of thumb on saving and investing. Now however, there are questions being asked about his credentials following a slip-up on ITV’s Daybreak show this week.

An expert yes, but a qualified one?

The whole issue of financial advice is under the spotlight at the moment thanks to something called the ‘Retail Distribution Review’. This proposes to change the way financial advisers earn their keep – from taking commission on selling products, to billing clients (people like us) for their time. As the ever excellent Anthony Hilton pointed out recently though, this could put advisers out of the financial reach of most people.

That means the majority will have to turn to Mr Lewis and others like him for their money advice. The first test on the horizon in this brave new world? Explaining to 7m workers why their pay checks are suddenly 4% lighter following the start of auto-enrolment in 2012. Good luck guys…

It’s Friday and it’s been a long, hard week. But in case you missed anything in the world of finance, here’s the second edition of the Financial & Professional Services team’s Friday Fiver. Big thanks to our contributors this week Ed Jones, Karen Butcher and Nick Woods:

One of these is becoming increasingly expensive

1. Inflation is still stubbornly high…Inflation in the economy is a bit like salt in the human body – a bit of it is good for you, but too much and you can quickly run into a lot of trouble.  The latest official figures on inflation (which came out on Wednesday) confirmed that the economy is still oversalted. Inflation rose either 3.7% or 4.8% year-on-year for December depending on which measure you choose to use.

Why does this matter? Well, for one thing consumers are feeling the pinch in their pockets – wages are rising nowhere near as fast so desposable income is falling. From a larger point of view, the Bank of England is supposed to try and keep inflation under 2% – unfortunately, they’ve failed to do this for quite a while now. That failure is leading some in the City to question the Bank’s credibility on tackling inflation. Watch this space on this one… Read the rest of this entry »

It appears that Britain’s financial regulator, the Financial Services Authority, has had enough of bankers discussing merger and acquisition activities with the media. In a paper that they’ve distributed this afternoon they claim that they have:

“identified several articles in the media that contained specific and precise information about corporate transactions before they were formally announced by issuers”

The paper then carries on to say that “media reports were preceded by telephone conversations between insiders on a transaction and journalists”

In other words bankers have been discussing M&A activity with the media, in all probability in an attempt to alter the terms of that activity. Following a year in which we’ve seen high profile deals such as Cadbury/Kraft light the blue touch paper in Whitehall, you can perhaps understand the FSA’s desire to try and get a firmer grip on what it calls “the suspected practice of core insiders strategically leaking inside information”.

Their solution however appears pretty draconian – in a nutshell, firms will now have to route any phonecalls from the media straight to their PR team. Non-PRs meanwhile will have to refuse to talk to media unless a member of their PR team is present (either in person, on the phone or copied into emails).

As the FSA puts it, this directive will relate to handling any “inside information” which they state includes “corporate transactions, trading updates and regular financial information”. In other words, pretty much any financial data that a company holds.

Strong stuff, but the real question is, will it actually work? Already, the announcement has provoked a mixture of sarcasm and derision from journalists on Twitter – witness the Telegraph’s Louise Armitstead and Breakingviews’ Peter Thal Larsen:

As my colleague Jonathan has just pointed out, one thing this likely will  mean though is that City PR agencies increasingly find themselves ‘gatekeeping’ on the FSA’s behalf…

Northern Trust Group, one of the oldest financial institutions in the US has a 120 year history in banking and wealth management. Its recent decision to join the twitter community makes it one of a growing number of US banks and financial service companies using the micro blogging service.  In the UK, the financial media, including publications as diverse as Fund Strategy, Mortgage Solutions and Financial News are making full use of twitter’s ability spread news and content in real-time but the financial service industry which they serve, for the most part, has been slow to join and dip its toes in the twitter pond.

To put this situation in context, according to a recent Chicago Tribune article, as of late 2009, more than 710 financial institutions in 38 countries were using twitter, a tiny fraction of the companies out there. Even in the US where twitter is becoming a relatively mainstream tool for companies to communicate, take-up is limited.

This initial reluctance to experiment raises a number of questions, in particular, is twitter an appropriate medium for financial service companies to engage with their audiences and how could the industry use the tool to best effect?  

One possible explanation for its absence from the twitterverse is the level of regulation faced by financial service companies. It is true that relative to many sectors, financial services companies are more limited in what they can say about their products and it is difficult to explain risk, charges or terms and conditions in a 140 character twitter message. In a recent paper on product promotion the Financial Services Authority urged financial services companies to adopt best practice when communicating through social networks and in particular warned that promotional activity will be subject to scrutiny.

To my mind, this misses the point about how financial service companies can use twitter. It is not a forum for broadcasting promotions or pushing products, instead it is an opportunity to engage with customers and other audiences, listen to what they have to say about a company or product and to help and inform them if possible. The Twittermavern blog offers a number of sensible guidelines for companies thinking about using twitter. They are as follows:

• Don’t push your message
• Focus on conversations by inviting, engaging, cheering and helping the customer
• Listen for the relevant conversations and then try to be helpful
• Employees should speak with their own voice and personality
• Most of all, be responsive

These principles are reflected in the practice of some of the more successful companies using twitter. From the world of retail banking, Bank of America is using twitter to address customer service issues and has appointed a team to proactively search for customers experiencing problems. Tara, Sarabjit and Georgann (the current twitter team) give the bank a face and personality and the account has grown to more than 7,500 followers.

Twitter is also an outlet through which companies can highlight their expertise or interests. Fixed income manager PIMCO for example uses its twitter feed to circulate the views of its fund managers as well as more detailed commentaries to those with an interest in bond markets. Its follower base has grown to over 4,000 people since it started in December 2009. None of the messages are overtly promotional, nor do they seek to sell a specific product but the depth of PIMCO’s knowledge and its willingness to share its views with existing as well as potential clients helps it stand out in a busy market place.

The number of financial services companies on twitter is still relatively small but there are a growing number of examples of companies, each with different products and audiences, using twitter effectively. What is clear from the examples listed is that each of the companies has dedicated a significant resource to the task and has clearly thought out a strategy on how they will use account. I expect that despite the slow start, the number of UK financial service companies using twitter will grow significantly over the next twelve months and it will be interesting to see who emerges as the most innovative voice in the coming months.

Jonathan has an extensive list of UK and international financial service media, journalists and companies using twitter. It can be found via his profile at – http://twitter.com/j_g_henderson