The Big Lie – the complete book online - 22 Banking

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Chapter 22

I laughed all the way
to the official receiver


Italy’s most renowned film director was persuaded to make a series of television commercials for the Banca di Roma in 1992. As he told it, “They censored the most entertaining idea. My little film started with two well-dressed robbers who go down into the bank vaults. They open a big safe, but there’s nothing inside, not a penny. Then a voice-over says, ‘There’s not a single lira left. We spent everything to pay Fellini’. The managers of the bank were aghast: ‘A bank without money? In times like these . . . I’m sorry, Maestro, but this isn’t good enough. You may be The Great Fellini, but we’ve invested 25 billion lira. Think of something serious, and don’t play around with our money”.

One winter day in 1994 an unlikely group of protesters took to the London streets. They wore sober business suits. One, carried aloft on the shoulders of the others, hung with a rope around his neck from a placard which read: “Small Business Crucified by Barclays Bank . . . as the Bank of England washes it’s [sic] hands”. Advertising artistry was in evidence: the placard displayed a logo, $A£E, which stood for Struggle Against Financial Exploitation, whose members maintained that Barclays had ruined their lives by “mistakes and malpractices”. Barclay’s Chairman, Andrew Buxton, said that $A£E represented a minority, but that he had “made efforts to sort out their problems”.

In the recession of the early 1990s Britain’s banks had squeezed their customers hard. Newspapers recounted harrowing tales of indifference, incompetence, and extortion. One customer was charged £66 for having an unauthorised overdraft of 72p for two weeks. Another was billed an hourly rate when he invited his bank manager to lunch. In 1991 a letter by an aggrieved small businessman to the Sunday Times stimulated the newspaper to launch a campaign which resulted in the Chancellor of the Exchequer, Norman Lamont, calling in the heads of the big four clearing banks for a dressing-down.

The major clearing banks, Barclays, NatWest, Midland and Lloyds-TSB, had created a cosy oligopoly offering parity services at parity prices, and with a generous dollop of arrogance. Despite public obeisance to customer focus, bankers’ ecclesiastical language revealed where their hearts lay. Loans were “granted”, yet one “applied” for a deposit account. It was tedious to switch one’s account – banks were inefficient at this – and they were all the same anyway. Customer retention was no problem; experience proved that a customer at 18 was theirs for life and so the banks focused their advertising on youth. They found it difficult to address this market except in the language of parody, such as a NatWest campaign which attempted to borrow street cred from the uncouth antics of the forehead-studded punk rocker characters from the cult television programme The Young Ones.

When a crazy easy credit spiral collapsed in 1992, British banks faced £6 billion in domestic bad debts on top of a previous provision of £9 billion for unwise Third World loans. They reacted by shedding thousands of jobs. There was also a rash of bad publicity about other financial institutions. Household names such as Guardian Insurance, Save & Prosper, and Commercial Union were accused of mis-selling pensions and overcharging, and were forced to offload their self-employed direct sales forces. A 1995 survey conducted by the Henley Centre for the re-insurance company Swiss Re reported that only 29 per cent of adults retained a respectful opinion of the staff of banks and building societies, independent financial advisers were endorsed by 12 per cent, while life insurance salespeople, at 7 per cent, ranked with the traditionally most despised profession, estate agents. Everywhere in Britain traditional trust in financial institutions was haemorrhaging away and the major banks were deeply unpopular.

One of the contributing factors was their advertising. By the 1980s financial services had replaced Lux and Wonderloaf as the big spenders. Banks had discovered marketing. Advertising for the Midland Bank, for example, was obsessed with establishing a confusing range of sub-brands with unlikely names, such as the Orchard Account. Consumers were infuriated, because while squeezing their customers with extra charges, the banks were lashing out vast sums on television advertising. This was exacerbated by the content of the commercials, which merely confirmed the banks’ complacency and drift from reality. They were squandering millions on a confabulated world. There was a listening bank, an action bank, a bank that liked to say yes . . . it didn’t wash. Unlike most corporations, which are remote from most people’s lives, banks are familiar. You go into them. Their customers could easily compare the corporate posture with the reality; they knew that their banks were deaf, listless, and negative. While the advertising strove to create meaningful distinctions within a homogeneous group of institutions, the gap between the image of the industry at large and everyday experience was unbridgeable. So the advertisements seemed unrealistic, condescending, absurd.

The Barclays campaign of 1986, based on Terry Gilliams’s cult film Brazil and shot by the Bladerunner director Ridley Scott, was hailed by the advertising fraternity as breaking new ground for banks. Its bleak Kafka-esque portrayal of the hostile bureaucracy encountered in “other banks” simply identified and reinforced the problem for consumers. In 1994 the Midland was still reminding consumers of their dissatisfaction in a newspaper campaign presenting a simplistic questionnaire with a choice of two statements to tick: “1. I’m totally fed up with my bank, but it’s too much hassle to move. I don’t want to fill out all those long, complicated forms. 2. I find long, complicated forms very stimulating”. The advertiser’s solution was a “user-friendly transfer pack”, i.e. a form to fill out.

Belatedly, the banks began to realise that people were what their business was about, rather than a distraction from it. They moved from masticating the problem in their advertising towards trying to personalise themselves or their happy customers. The model was the advertising for the Woolwich Building Society, a small player which had consistently featured a perky young female employee chirping the line, “I’m with the Woolwich” with a genuine, warm smile. Barclays relied on fairy tales to present its bank managers as providers of mortgages and other services. In one mid-1990s television commercial a knight was having trouble keeping a huge troll away from his castle. He ran to his bank manager, who was clad in a medieval jerkin and wielding a quill pen. This figure took a sword to the troll and the knight won his castle. The obligatory final gag suggested more travail might yet be in store. “We can’t do anything about the neighbours”, shrugged the chummy Barclays voice-over with the arrival of a new threat: his parents, towering over the castle, revealed that the troll still rattling the castle gates was just a baby. The image of Barclays Bank was also hugely influenced by the persona of the mugging comedian Rowan Atkinson, playing the pompous and hapless fool in the high-profile advertising of Barclaycard throughout the 1990s.

To build up a reputation as a comprehensive financial services retailer, NatWest introduced members of staff and its specialist advisers. A series of television vignettes set out to demonstrate how these people were just like the rest of us, only more likeable: a fat man coyly suggested we probably could not imagine him playing squash; another chap sitting in an office confessed his father was just a tradesman. For what it’s worth, the readers of TV Quick magazine, many of whom this campaign would have been designed to please, voted this the second worst advertising on television.

In 1994 the Midland Bank introduced one of its employees, “Britain’s least-known pension adviser”, under the headline “I am Mike Lindup and I’m real. Not a photographic model”. After revealing some ingratiating personal details, Mike smooth-talked his audience, “But don’t worry, I don’t want to sell you a pension or anything. Not now, anyway. I believe you have to get to know each other before you start to talk about pensions, which are very personal things”. He promised to see us again soon in subsequent advertisements. True to his word, Mike reappeared frequently, though revealing himself as an accident-prone clown. A following advertisement showed him entangled in a tennis net, with the headline “I am Mike Lindup and I’d like to talk to you about safety nets”. In another he was in bed, with a thermometer in his mouth, though still wearing a suit. “I am Mike Lindup and I’m a little indisposed, but if you call (0800 etc.) one of my colleagues will be in touch”. After only a brief acquaintance, our new chum inexplicably disappeared from our lives forever.

Starting in 1995 the Co-operative Bank promoted a policy of ethical investment as its USP, using a series of commercials delivered by weird, threatening close-ups of flat-voiced people photographed through a distorting lens. These unsettling images were intended to represent its concerned customers, interspersed with photographs of dying fish, sewage, and other consequences of indiscriminate commercial investment. They clearly positioned the Co-operative Bank on the leading edge of eccentricity.

Apart from Scottish Widows, with its appealing young woman shrouded in black, the insurance companies, particularly, suffered from lack of brand distinction. Prudential won advertising awards for its simple “I want to be” campaign portraying generic aspirations (e.g. a photograph of a penguin captioned “I want to fly somewhere warm for the winter”, plus a logo). Yet, according to the 1995 Henley survey of pension providers, this prominent campaign achieved only a 10 per cent correct brand attribution. “There isn’t much difference between brands”, the report concluded: “they all begin with Scottish and end with Life. Whenever a Scottish Amicable advertisement was shown, the recall for Scottish Widows shot up”.

Towards the end of the 1990s, the institutions began turning the screw of emotional blackmail. A 1997 Midland Bank press ad shows a photograph of a toy car in a suburban back garden with the headline: “This is not an ad about mortgages. It’s about children, apple trees and memories”. A 1998 Pearl Insurance television commercial featured a young Dad who had to borrow £1 from his son to pay for his fish and chips treat. The kid chastised his father, “You never think about when you’re going to need money”. Few advertisements in the financial services sector bother to involve Mum, although it’s often the woman who has the most influence in the family’s key financial decisions. Standard Life found a way of doing it in 1998 by lifting from a highly regarded Safeway campaign the technique of putting wisecracking adult wisdom into infants’ mouths. These heart-warming pitches, showing an everyday couple, joined the obligations of parental and financial responsibility. The Scottish Widows campaign of the same year showed an executive leaving his office building for the last time. Carrying his presentation golf clubs, he descended a staircase to meet a dark, cowled figure. The Grim Reaper? No, it was the Scottish Widow herself, ready to escort our hero not into the next world, but towards a happy retirement. Representations of business life were universally simplistic, suggesting that the high street banks had little understanding of business realities and offered only cosmetic solutions, frequently presenting businessmen as innocent chumps. “Then I just had to get the van” summarised the business plan of a loan-bingeing electrician (setting up in business during a housing slump) in a NatWest television campaign.

By the end of the century, NatWest was instructing people how to live their lives. Over the slogan “You only live once” the bank tempted consumers to extend their personal debt in 1998 press advertisements showing blue plaques on London houses bearing inscriptions such as: “Sarah Ellingworth lived here 1968-1998. But never bought that Poggenpohl kitchen she always hankered after”. In 1999, its television campaign encouraged people to leave their jobs. An animated commercial in the simplistic style of a safety manual showed figures escaping from offices: clambering into the air conditioning duct, mounting filing cabinets to reach the window, as aircraft slides unfurled from office windows and ejector seats sent managers off on parachutes. While the voice-over advanced the argument that NatWest helped 67,000 people to set up their own businesses in the past year, the monolithic building they were defecting from in this piece of whimsy shrieked “banking”, and in particular that City landmark, the NatWest tower.

It the banks had acquired personalities, they were schizoid. Amusing embroidery such as this was reserved for consumer messages. When the institutions had something really important to say about themselves, they abandoned their user-friendly advertising personae and spoke like the same old stuffy bankers, in advertisements covering a whole page with copy, and no silly pictures, with po-faced headlines: “Important information for members on the Halifax/Leeds merger”.

Yet, starting in the mid-1980s, the face of retail banking had begun to change forever. One bank invested in technology and high standards of customer service and also got the advertising formula right – after a disastrous start. Midland, saddled with high costs and low-yielding assets, began looking at ways of attracting more affluent and upmarket customers. The result, in 1987, was “Project Raincloud”, a twenty-four-hour banking system available 365 days of the year, with no branches but staffed by real people on the end of the phone who would perform all of the functions of a traditional bank, apart from business banking. The decision was taken not to identify the new bank with its provenance. Ostensibly this was to avoid eroding the Midland’s existing customer base, but more importantly it gave the fledgling a fresh start, unencumbered by the tattered reputation of its parent. An advertising agency with a reputation for controversial work, Howell Henry Chaldecott Lury, was appointed to launch the new concept and in 1989 the first television commercial appeared. It was a kind of time warp simulation which broke into the middle of an Audi commercial on ITV (with the permission of Audi and the Independent Television Commission). It showed office staff apparently celebrating the twenty-fifth anniversary of an organisation called First Direct, with no indication of what it was. According to agency principal Rupert Howell, “It was a sort of War of the Worlds thing”, intended to make people sit up and ask “what was that all about?” Four hundred people rang the TV stations to ask precisely that. This jape was followed by a television campaign costing £2.5 million in which actress Charlotte Rampling spoke gnomically about a radical new form of banking, advising viewers to turn off if they were not interested. Howell claimed that First Direct was flooded with calls, about 10,000 over the three months. If the bank had recruited all of these it would have been at a cost of about £600 each. In any event, it was not achieving its target of attracting 100,000 new customers in the first fifteen months.

The First Direct executive responsible for the launch explained what happened next:


You can’t expect customers to buy a product if they don’t know what it’s all about, so we had to concentrate on building the brand. We made 74 10-second TV commercials explaining the concept of a twenty-four-hour bank without any branches and used really unusual visuals: Wellington boots, laundry baskets, buckets and fish – virtually anything not connected with financial services.


This sounds a bit muddled, and it was. The television commercials, and the mystifying series of small ads which kept appearing on the front pages of national newspapers in 1990, gave no hint of what kind of services were offered by First Direct. Apart from the eclectic objects mentioned, there was no copy, only a phone number to call.


We bombarded people with images – 70 different ads in all, and made icons out of extraordinary images. The ads were powerful and the point was to reflect the difference of the brand, but I think it might have helped if at the beginning it had been explained that First Direct was a bank, because some of it just passed people by.


Some of her colleagues at the bank were mystified as well:


I didn’t realise there had been a communications breakdown within the company until the day we demonstrated the advertising campaign to the management team. People didn’t understand how we could advertise financial services without showing cheque books and credit cards. No one understood the purpose of the commercials. They were concentrating on the product without appreciating that a brand has to be built before customers come in. We changed the strategy. Instead of concentrating on building the brand, we came off television and pushed the product through the press . . . but it took longer to build the brand and get the customers than I had envisaged.


It is a testimony to the strength of the First Direct business concept that it managed to survive this muddled brandspeak claptrap. The bank changed agencies. What eventually pulled in the customers was a no-nonsense direct marketing campaign and a straightforward series of explanatory newspaper advertisements with old-fashioned coupons prepared by the Chiat/Day advertising agency. Logical argument replaced the “branding” bamboozle. Lengthy copy developed themes such as “Shrewd: branches cost money. If you hardly ever visit your branch, you’re wasting money”. Product advantages were emphasised: higher interest rates on savings, lower charges, automatic bill payment service, subsidised telephone calls, open all the time. First Direct was soon attracting its target of 10,000 customers each month. And backing it up with performance. A survey carried out by NOP found that 89 per cent of its customers were actually recommending First Direct to their friends, without being asked. Other banks flocked behind: NatWest, the Co-op, and others cloned direct banking services which flagrantly copied the austere, informative First Direct advertising style.

But, after a wrong-footed launch First Direct had regained its balance and opened up a long lead on its rivals in technology and service. Its reputation was secure enough to legitimise in consumer’s eyes an extremely aggressive 1996 press and TV campaign, “Name one good thing about your bank”. The reactive campaigns of competitors such as Barclays failed to mount a serious challenge: “If your current bank infuriates you, it only takes a second to change to Barclays. Well usually”. Over a pen signing a “funny” long name: A. Ziborrowabanoskavid.

In 1995 the same thing happened in the life insurance industry when a red phone on wheels hurtled over a hill on television screens. This was the launch of Direct Line life insurance, which challenged the consumer to cut out the middleman and pick up the phone to find a better deal. While advertising professionals turned up their noses at this primitive presentation, life insurance brokerages swiftly became virtually obsolete.


All banks had recognised the poor image of the industry throughout the 1980s and 1990s; they and their advertising agencies had access to the same depressing results of large-scale consumer attitudinal research. But the corporate culture was in denial. In each bank it was always the other banks which were uncaring and inefficient. Their attempts to discriminate between advertising trumpery and service, between corporate culture and reality, cost them dearly. By the end of the century there was real competition in banking. Apart from the direct banking services, other retailers with a big customer base and stainless reputations muscled in. Marks & Spencer started selling pensions and life insurance over the phone in 1995. Virgin Direct broke into financial services, too, when it introduced a low-margin PEP product. Sainsbury’s launched a banking service in 1997, and can afford to treat it as a loss-leader to attract customers into its shops. Free banking is the norm and profit margins have been squeezed.

In 2000 Barclays created another PR disaster. In the wake of a Parliamentary investigation which reported that British banks were massively overcharging their customers Barclays made a series of poorly timed announcements: it imposed an unpopular surcharge on cash machine withdrawals, reported fat profits, quadrupled the salary of its chairman, and then closed 171 unprofitable branch offices, mostly in rural areas. At the same time it launched a breast-beating campaign on press and television, featuring Welsh film star Sir Anthony Hopkins to extol the virtues of big organisations. This insensitivity redounded on both the bank and the actor; another Parliamentary committee was convened to investigate bank branch closures, while aroused Welshmen called for Anthony Hopkins’s recently achieved knighthood to be revoked.

With the single exception of First Direct, which was belatedly able to harmonise its professed values and its performance, as a category, advertising for banks over the past few decades, condescending and
out-of-touch with their customers, would seem to have been largely counterproductive. Like airlines, which are permitted to withdraw from television and press commitments whenever there is a major air crash, financial institutions would be advised not to advertise at all at times of disaster.


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