July 13, 2018
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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.
Savings finally hit five year highs
This week savers were given a boost as the typical rates on offer for notice accounts (where notice has to be given to withdraw cash) jumped to a five-year high. After reaching record lows in 2017, they are now back on track, with this month seeing the highest average rate since May 2013. The analysis also found that more than four-fifths (83%) of notice accounts currently on the market now pay over the base rate of 0.5%, compared with just over half (53%) a year ago. The bump in rates has been attributed to more competition from challenger banks fighting it out to grab savers’ attention: (From the Daily Mirror, 10 July, 2018)
Corporate culture matters for M&A success
M&A activity showing no sign of dampening: more than $2.5tn in mergers and acquisitions have already been announced this year and, if the pace continues, 2018 is likely to surpass 2015’s $5tn in M&A deals. Against this backdrop, it’s crucial for companies to recognise the importance of a strong cultural fit to ensure a successful process. Research on cultural norms has been used by numerous multinational corporations, and suggests that countries as diverse as Japan, Norway, Singapore and India all have tight cultures where a company will enforce its norms quite strictly. Elsewhere, the likes of Israel, the Netherlands, Greece and the US have loose cultures which are more tolerant of rule-breaking. Understanding these dynamics and cultural differences is the key to a successful M&A (From the Financial Times, 8 July, 2018)
Holidays trump mortgages for our time
New research shows consumers spend an average of five days on holiday research and six days on choosing the right car, but only 3.6 days on their mortgage – barely more than they devote to picking an outfit for a special occasion (2.9 days). Even more concerning, 26% said they pick the first available mortgage, which could be a costly mistake to make. The apparent reason for this apathy is a lack of product knowledge: one in three (36%) claim to know little to nothing about mortgages and spend less time comparing products as a result (From MoneyFacts, 12 July, 2018)
Where biometrics meets the plastic
MasterCard is in talks with British retail banks to introduce a ‘biometric payment card’. When this new card is performing a payment, a shopper places the end of their finger on the sensor to confirm their identity and allow the transaction to take place. The innovative approach is designed to meet new EU regulations which will require people to use two methods of authentication when carrying out payments (From the Sunday Telegraph, 6 July, 2018)
Fraud uncovered, from stolen cards to student mules
Monzo is taking the lead in fraud awareness by giving unprecedented access to its back office to reveal the most common financial scams and how it is battling them. It has found that students are selling their bank accounts for as little as £50 to £100, often as they are finishing university and heading abroad. These accounts are then used by fraudsters to evade the strict checking procedures when individuals try to open an account. The in-depth reveal also explores transaction attacks, blacking transfers and deposits and detecting data breaches: (From the Guardian, 7 July, 2018)
The real World Cup winner – England’s communication plan
We’ve had just about enough time to process that football isn’t coming home quite yet. We’ll leave the post-mortem of England’s tactics and selection to the professionals – but we do have a few things to say about the communications game played off the pitch by the England team.
England’s World Cup PR campaign was slick, thoughtful and (by FA standards) novel. We see three important things that corporate and financial communications can learn from it:
- A great spokesperson-in-chief: Gareth Southgate is a terrific communicator and a complete professional. The clear focus was for him to be pensive but not philosophical, which meant he was always calm and deliberate in what he was saying. He has a natural ability for media engagement, no doubt, but he will have had plenty of advice on what to say and how to say it, along with practice and rehearsals for press conferences as well as penalty shootouts. In contrast to his slapstick predecessors, Southgate didn’t put a foot wrong throughout the tournament, allowing him to go from caretaker manager to English folk hero.
- The right focus on image: The waistcoat and stripy tie combo was no accident. Nor was the team’s decision to gather in front of loyal fans (Southgate made sure they were all on their feet) to applaud them for their support after the Croatia game. The splash on the back pages of this scene will long stay in the mind, far more than what was said in interviews after the game. From media darts matches to inflatable unicorns, the easy-going image of Team England was carefully choreographed to great success – in contrast with the public missteps of previous publicity-shy or overly image-obsessed England squads.
- Authentic social media: Sport gives you a bit more latitude to be characterful than the corporate world. England have increasingly had a problem with connecting with a hyper-critical fan base back home. Nonetheless, some good-natured joshing between the players made them seem far less like remote celebrities, and far more like your mate who likes sending you hilarious memes. Irreverence isn’t for every brand, but it often goes down well.