There was almost unanimous agreement at the FS Forum in St Paul De Vence over the challenges facing the Financial Services Industry. They were described in four words: trust, reputation, transparency and engagement. There was also serious acknowledgement that the consumer has a vital role in helping the major brands from the industry to meet these challenges. There was a sense too amongst some of the delegates that in the words of Simon Clift the recent CMO of Unilever they felt “behind the consumer” and that this is a very uncomfortable place for a brand or organisation to be.

Changing Consumer Landscape

This is to be expected as the consumer landscape is changing fast. It is common knowledge that the advent of Web 2.0 has given consumers the confidence and the ability to take more control of the relationship they have with brands. It has given rise to the term “empowered consumers”, a new breed of customer who have a strong belief not just in their own voice but also in their own creativity, ideas and self-expression. It is no longer about what your brand does to the consumer but what consumers are doing to and with your brand.

Impact on Financial Services Industry

This trend manifests itself in the Financial Services Sector in a number of ways. The first is that the empowered consumer of today sees openness as key to building trust and accountability with the brands they engage with. This is critical for banking brands where events from the last two years have seen trust and fairness eroded. This has been picked up by the FSA’s ‘fairness’ objectives where banks are now being tasked to provide fair products and deal with customers in a fair way. Secondly there is a drive to streamline consumer interactions and make customers lives easier by combining products. The social web will have a big impact on financial services marketing, sales and business communication processes with demand from consumers for new service designs and interfaces. This will enable consumers to draw upon a wider base of advice from places such as twitter, opinion aggregators and financial forums and will lead to real time customer service becoming a top differentiator. And finally customers are moving away from conventional advice channels (IFAs, banks) and moving more towards peer advice because social media has made this possible in ways that were not there before.

New Rules of Consumer Engagement

All of this calls for a new set of rules for consumer engagement and requires the industry to look outside its own category to the world of FMCG and Technology to find better ways of involving consumers in the research and innovation process. And they won’t have to look too far or too hard as the idea of co-creation – doing things with people not at people – has been embraced by big companies for a while. Co-creation takes consumer involvement to another level by bringing brands and consumers together on the same level and involves consumers at the beginning of the process rather than at midway or at the end. This can take place in on-line communities or offline in workshops or both. It is through our co-creation communities for young people namely Headbox and for women aged 25-50, namely Mindbubble, that we have been using to co-create a range of new products. The most exciting example has been our co-creation of Axe/Lynx’s 2010 variant in terms of both the product and also the fragrance – something that has never been done before – which was launched globally earlier this year.

Some important guiding principles

As with all new approaches though there are some significant lessons that we have learned along the way. The first is that when you are bringing leading edge consumers together with brands it is vital to have a coherent and well structured process that gets the best out of your combined creativity so that it delivers better outputs. The second is that within this structure it is important to have a mix of online and offline methodologies because they produce more ideas of better quality and are able to involve consumers more quickly in what you do. It is why we have inverted the traditional research approach, starting the process by gathering quality insight from thousands of consumers rather than just a few. Our proprietary tool Pulsar has allowed us to listen and to observe to what consumers are saying in real time on the web as well as measure the influence these conversations are having. Being able to combine qualitative and quantitative research in this way means we are able to help brands respond much more quickly to the speed, volume and quality of consumer interactions that are taking place with their brand, product or service.  And finally the role of the consumer is critical; treating them as active participants in this process and giving them as much responsibility with direct involvement throughout the entire process. If the Finance Industry wants to stay ahead of their consumers and the fast changing landscape they occupy then they would be wise to adopt the principles and philosophy of co-creation.