The distance marketing of consumer financial services directive

The EU directive on the distance marketing of consumer financial services (the DMD) was adopted in September 2002 bringing financial services in line with other retail sectors. This paper begins with an analysis of the principal substantive provisions of the DMD before considering the obligations it places on member states to ensure its substantive provisions are enforceable in national law and that an adequate system of redress is available to consumers. The paper then summarises the path taken by the DMD through the European legislative machine and analyses how the DMD will facilitate the integration of a European single market in financial services while striking an essential balance between the rights of the consumer and the rights of financial services providers. In the final part, consideration is given to how the DMD will be implemented by member states. In particular, attention is directed to the overall impact the DMD is likely to have on the marketing of financial services in the UK and how HM Treasury and the Financial Services Authority aim to harmonise domestic law with the DMD.     

Technology and financial services: Marketing in times of U-commerce

This article revisits and uses the so-called U-Commerce framework to challenge financial services marketing decision makers to consider reformulating marketing objectives in an age of ubiquitous technological networks. It outlines the 4 U’s of U-Commerce – ubiquity, universality, unison and uniqueness, and revisits the original framework used to conceptualize U-Commerce. Then it identifies and describes four broad marketing objectives that financial services marketers can strive for, including amplification, attenuation, contextualization and transcension. Four broad marketing strategies can be used to achieve these objectives, namely nexus marketing, sync marketing, immersion marketing and transcension marketing. Examples specific to financial services marketing are used to illustrate and discuss these strategies.     

Consent to direct marketing in the financial services sector

The development of communications technology in recent years has led to an expansion in ‘cold calling’, particularly as a means of selling financial services. While encouraging new entrants into the market and thereby increasing consumer choice and competitive prices, this is often viewed as an infringement of personal privacy. This paper attempts to reconcile the complex legal framework that has been put in place to restrict the use of unsolicited direct marketing and to show how, through the use of a carefully drafted data protection notice, the direct marketing of financial services may be conducted lawfully.     

The distance marketing of financial services — A UK overview

This paper begins with an analysis of how the Distance Marketing of Consumer Financial Services Directive has been implemented in the UK under English law and its key provisions. The paper then progresses into the fields of the E-Commerce Regulations, the Privacy and Electronic Communications (EC Directive) Regulations 2003 and data protection issues. Overall, the paper provides an overview of the legislative framework that must be complied with in order, successfully and legally, to market financial services to consumers at a distance.     

The split capital investment trust saga: Lessons for financial services marketing

The split capital investment trust boom at the end of the 1990s demonstrated that product innovation and financial engineering can lead to the creation of dangerous products whose risks are not understood by investors. It also emphasised the need for careful marketing of investment products. This involves identifying the needs of investors, creating products to meet those needs, promoting and selling those products, and managing client relationships after the sale. Particular issues that should be addressed include the need to educate clients and adequate stress testing of new products.     

Risk preferences and the marketing of financial services: Segmentation by birth order

Traditional investment questionnaires may yield an incomplete measure of clients’ risk tolerance. Birth order has the potential to provide additional insight into the true nature of customers’ risk aversion, thereby assisting financial advisors to formulate the optimal investment portfolio for each client. We summarize research findings on birth order-related personality traits that have potential impact on the financial services industry. Marketing implications for investment firms are discussed in a framework that considers customers’ birth order differences in risk tolerance, patience, financial goals and conformity.     

The make-buy decision in marketing financial services for poverty alleviation

In this article, we suggest how poverty reduction can be achieved through alleviation measures that enable the poor to satisfy their needs by focusing on the needs of others. Instead of a direct focus on the consumption needs of the poor, we suggest an indirect approach to satisfying these needs, by providing the poor with credit and consulting services for entrepreneurial businesses that focus on the needs of buyers. Loans to the poor who lack collateral are increasingly based on group lending techniques that rely on joint liability to secure repayment, which have come to be known as microfinance. We suggest that in addition to credit, financial services for the poor must include strategic advice and assistance to select markets, and make the products (goods and services) for sale in their output markets with the financial services bought in their input markets. Financial services for the poor must include not only money to invest in a business but also consulting services to help the business succeed. The provision of consulting services will also facilitate monitoring and enforcement, increasing loan repayment. Depending on poverty levels, the extent of bundling credit and consulting services will vary with one or more organizations emerging to meet the needs of different segments. We suggest that poverty alleviation is achieved by the poor focusing on the needs of others in their output market, and outsourcing financial services to one or more suppliers in their input markets.     

A survey of key success factors in financial services marketing and brand management

What challenges and opportunities do financial services marketers face as they strive to improve marketing and brand performance, relevance, value and accountability within their organisations? To help answer this question, MCorp., a strategic brand and marketing consultancy, surveyed marketing executives from 67 financial services institutions across the USA in the autumn of 2004. The survey grouped responses into several categories, ranging from an understanding of how marketing and brand performance is tracked, to respondents' views on specific challenges to improve marketing and branding effectiveness. Across all categories, data drove two ‘big-picture’ conclusions which reveal key strategic issues facing financial services marketers today. First, there is a stated lack of brand and marketing performance information, and an absence of the systems and programmes to track it. Secondly, there is a perceived lack of top-down organisational understanding of the importance, value and meaning of brand within respondent organisations. Within the overall context of these conclusions, analysis led to a series of key findings, and drove specific recommendations for addressing the issues raised. While the illustrations given are based on data gathered from institutions in the USA, the author's experience suggests that the conclusions and attendant recommendations can serve as a basis for process and performance improvement in any financial services institution.