The rise of Personal Finance Management services

Last year I was lucky enough have a senior role as the Head of Digital for a financial organisation. This got me back into the Financial Services arena, where I could leverage the experience I’d gained from several years of agency-side delivery in this sector.

Diving into this industry again after several years out of it, I was struck by the changes that had taken place. For example: The reputation of banks was lower than it had been nearly 10 years ago (primarily due to the financial crash, but also because of the rise of customer complains brought on by better communication methods such as the Internet and Social Media) and people were eventually breaking away from the traditional and clumsy segmentation models of life stage and age.

However one thing in particular grabbed my attention more than most, the potential for banks not to own the financial interface with the customer anymore and that a service layer could be placed between the user and financial services provider. In other words, the market was far more likely to use personal finance management tools now than ever before.

But why are online personal finance management services now being considered? Especially when banks have spent so much money and time creating their own direct banking channels?

1. Users want independence
Having a product agnostic platform puts the user back in control. Look at the gradual dominance of the aggregator in financial comparison; from credit cards through to car insurance, online now provides a way of comparing and contrasting multiple products in a single place. This independence from a specific financial services provider gives the user a place they can trust and not have cross-sell and up-sell offers from the same company tirelessly pushed to them at every opportunity.

2. Users need better interfaces
All online banking and services sites are playing catch-up with each other, but all so very slowly. Thanks to lengthy development timescales, the need to comply with in-house governance and the very nature of financial brands to be less agile and more risk averse... you then get products that work, but are rarely shining examples of fantastic functionality, user experience and design.

3. Users have more choice
The financial services landscape has changed. These days users not only have the ability to switch providers for their insurance and banking needs, this switching is becoming a legal requirement that all FS providers must support. Add to this the fact that so many financial companies have now all diversified into as many different markets as possible (usually by white-labelling everyone else’s services) and the choice amongst products is bewildering and still growing...

When you then compare these facts with the ability of smaller, digital-first and more innovative personal finance manager sites, you can start to see why some banks and building societies are getting worried. The rest, well they’ll have a nasty shock when they eventually wake up.

Budget airlines have falling online reputations

It comes as no real suprise to read that the budget airlines of Easyjet and Ryanair have declining reputations online, given PR own-goals such as ranting on blog that dare criticise their booking process.

The bi-annual Kaizo Advocacy Index (KAI), which is designed to provide a view on leading brands' online reputation and recommendations have the following recent report:

Kaizo Advocacy Index Winter 2009

View more presentations from guest542bc4.

For how long can some companies in the commoditised markets such as air travel continue to have arrogance?

Online Reputation Market worth £60 million

In their latest report 'The Online Reputation and Buzz Monitoring Buyer's Guide 2008', E-Consutlancy believe that the market for monitoring reputations online will be worth £60 million in 2008. This market, made up of companies such as Brandwatch and Cymphony, is therefore set to grow by 30% by the end of the year.

Companies are realising that monitoring and measuring their reputation across their delivery and customer interaction channels provides the opportunity to understand what users are actually saying. Furthermore, by feeding this information back through the organisation they can potentially improve products & services (and hopefully not just to prep the lawyers for another round of 'cease & decist' letter sending).

We've had clients of our company Ideal Interface take a look at these online monitoring solutions and start using them, so it comes as no suprise that the market is growing. But what's in-store for 2009 and beyond?

This was a question I asked Gile Palmer at Brandwatch recently. His reply was:

I think 2009 could be an interesting year for technologies like Brandwatch - for starters they will get better at the core job - alerting people when interesting/worrying things appear online as well as giving a more medium term / long term view.

There's no doubt that the Online reputation monitoring is heating up. WPP has recently moved to buy TNS, who have their Cymphony social media tracking service, for a reported £1.1 billion. This has led some industry observers (including myself) to assume that larger players are looking to enter this growing market.

Interesting times ahead then....

Social Media Monitoring & Analysis

Having recently read the Aberdeen Group research paper on Social Media Monitoring and Analysis, I was asked by a client about its usefulness (before they read it themselves).

Now Aberdeen Group papers are usually written in a fairly dry manner, with terminology that can initally baffle the inexperienced (e.g. their use of the term "laggards"), this one is no different. However once you have read a few you get used to it (almost).

The paper does contain some very useful information about social media measurement as well as observations and insight picked up from those they have surveyed in the entertainment, PR, retial and other market sectors.

A service like this (e.g. Magpie's Brandwatch) is useful for managing your company's online reputation and if the report says:

"61% of Best-in-Class companies currently deploy social media monitoring and
analysis solutions"

....perhaps you should consider if yours needs to do the same?

Corporations and Blog Storms

Sunshine after a rainstorm is refreshing and welcome. It shows that even though you have to stay in hide away from the grey clounds and damp atmosphere, eventually they pass and brighter times come around again.....

The same used to be the case for companies who had 'bad news days'. They would sit out the bad news and spring back when the public had forgotten (or something more important had taken the focus).... Well, that was until social media made a playground out of bad news and online activists were given the tools to constantly wear away at the walls of a company's reputation.

“With consumers increasingly using social media to share feedback on their
care experiences, it has become increasingly difficult for businesses to ignore
or hide from bad experiences,”
Lynda Kate Smith, vice president, Care Business, Nuance Enterprise Division

However, this activity gets worse when this activism goes viral. Then, rather than this being a constant 'negative buzz', your company is subjected to a barrage of barracking.

This recent posting on the Social Media Influence blog by Bernhard Warner of Custom Communications shows the history and impact of a company (he doesn't name for obvious reasons): http://www.socialmediainfluence.com/2008/05/case-study-the.html

Online reputation management

A quick 'Hat Tip' to Andy Beal for his 'reputation management for dummies' column
http://www.marketingpilgrim.com/2006/03/online-reputation-monitoring-beginners.html

Do Reputation Management Services Work?
Well, BusinessWeek mentions that this new industry promises to help counter negative search results on the Web. Hiring one of these fixers may make nasty comments go away:
http://www.businessweek.com/smallbiz/content/apr2008/sb20080430_356835.htm

I've already seen TNS's Cymphony product (previously mentioned here) and am due to see Magpie's Brandwatch tool (previously mentioned here), both of which are useful for monitoring the buzz about product and brand, which obviously feeds a company's reputation.

So... is there a way of integrating these online reputation tools into other graphing services to come up with a way of understanding and visualising the Corporate Social Graph?

Web2.0 and your business reputation

A recent video clip posting from web consultant and fellow Linked In Business Strategist Lars Hilse usefully explains how companies can optimise their business reputation:



He's made some very important points about how modern social media methods (e.g. blogs) allow a disgruntled customer to tell not just 3 friends but 3000 people (highlighted in Pete Blackshaw's new Book) . He has also put forward a few comments on how to address this.

What I'm also glad to see if his use of portable video content for blogging. This paints a rich picture in a matter of minutes and gets a lot of information across. Great work so far Lars, lets hope we see some more of these.