What is the definition of optimism? An investment banker ironing five shirts on a Saturday night.
This is now a very clichéd and hackneyed joke, but was once busy doing the rounds at the height of the financial crisis in 2008, a time of countless layoffs in the financial sector, the complete collapse of financial household names, downturns in stock markets around the world and governments having to step in and bail out sinking banks.
The intricate reasons why there was such a total financial collapse are hotly debated to this present day, but most arguments – at some point – will usually touch upon a lack of transparency, a lack of ethics and sheer greed. Indeed, this has led to the stereotypical caricatures of greedy financial institutions that have done much to damage the public’s confidence in the financial industry as a whole.
It is not surprising that financial companies across the GCC are doing all they can to distance themselves from the failings that led to the financial crisis. They have their work cut out and are increasingly rewriting their communications strategies to ensure they control what is being said about them.
The fact is that the whole financial industry is now operating under an industrial-sized microscope. Every action, every deal is scrutinised, both externally and internally. You only have to do a quick online news search to see there are still seemingly countless alleged financial scandals going on across the world.
The use of social media has gone through the roof, with everyone now being an armchair commentator, criticising the industry and those within it. So financial companies are having to shout louder than ever before to prove to a still-cynical audience that they are untouched by the factors that led to the financial crisis.
Since 2008, companies have been working overtime to show their transparency. What may have been shrouded in secrecy before is now laid bare for anyone to see. Companies across the GCC and Middle East are increasingly investing in, and showcasing, their corporate governance structures, proving that they are operating in a manner expected of a blemish-free, well-managed company, which is run for the benefit of all, not just the interests of a few.
This trend will certainly continue over the next few years, with companies turning to experts to showcase their credentials to the world. In a similar way, companies will take a much more proactive stance when communicating their financial results.
One-to-one tailored interviews are now becoming standard, allowing journalists to understand the reasons behind the results, giving them a rich depth of understanding before they write their articles.
The humble press release, of course, still serves a purpose – but it is now increasingly seen as a starting point rather than a finished result. Companies are working hard to tailor their message, and we will increasingly see them reaching out to ensure their messages are heard in the way they want them to be heard.
Next year will also bring the increased promotion of personal loans and credit cards as consumer confidence improves, leading to people be more likely to spend. However, the promotion of “bigger ticket” loans, such as mortgage lending, is likely to be relegated to the fringes of financial marketing.
Rules requiring first-time buyers to put up 25 per cent of a property unit’s value out of their own pockets mean that fewer people in the expatriate community will qualify for a mortgage and invest in property this year.
Those that do want to pursue a mortgage may have to sell assets back in their home country to raise the 25 per cent capital that is needed, something many are unwilling to do, so for the time being at least, mortgage promotion will take a back-seat compared to personal loans and credit cards.
It is an interesting time for the GCC’s insurers. The region’s wealth makes it an important insurance market among the emerging economies. The GCC states are all strong energy producers, and that huge wealth is creating opportunities in the market and allowing governments to put together progressive infrastructures.
There are railway lines being built and borders will become more open. If you look at population growth trends, they are all very strong.
This growing population needs to be served by the still-fragmented insurance community, which will look at this opportunity with hunger, with individual players looking at every way possible to increase their market share.
So expect to see some merger and acquisition announcements. M&A activity will provide huge opportunities for players to increase their market share as they step-up their services to appeal to both corporate and individual clients and also addressing the hardening stance by insurance regulators on solvency and compliance issues.
It is certainly an exciting time to be working in the financial public relations industry, which is leading the overall news agenda more than ever before. Just look, for example, at the recent announcement that the Saudi stock exchange will be opening up to international investors – a major piece of news with multiple news hooks and opportunities for clients to share their views.
In addition, not only are individual financial sectors presenting some strong opportunities, the “feel-good” factor as a whole is high, with the number of public stock listings increasing in the region and some exciting opportunities in the pipeline. Of course, we cannot ignore the current volatility in the markets, but in recalling one of my first-ever pieces of financial PR insights – that a steady stock market is a dead market – it all adds to the need for PR practitioners to be at the top of their game more than ever before.
James Bishop is the head of financial and professional services in the UAE at Hill+Knowlton Strategies
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