Looking back at the world of finance in the last seven years, it is hard to see a way to stop crises occurring again. Despite years of arguments over who was to blame, pointing the finger has achieved nothing. The press, financial businesses and governments all over the world have been looking to secure a single entity that brought banks to its knees. Countries went into bankruptcy, and tens of thousands of people suffered unemployment. Perhaps some institutions are busy arguing over whether we are recovering or in recession to distract us from the storm’s path of financial devastation.
Whatever occurred, it hurt. Thousands lost their jobs and their pensions. Thousands more lost their homes. Millions are in debt. These facts will remain forever and are thoroughly recorded in history. They can’t be ignored. Arguing where we are now, and where we are heading cannot undo that damage or change what has been done. But can we learn from these mistakes? That depends on who you believe has made the mistakes to be learned from.
It all comes back to finger pointing and blame shifting. This doesn’t achieve much of course. Policies change, regulations are rewritten, and history still repeats itself. Some didn’t survive the latest wave of financial disasters. The retail sector lost a lot, and perhaps that has changed the face of the high street forever. Is the bank that loaned too much to blame, or the people that didn’t pay it back on time? Or have the retailers failed to notice how popular online shopping has become?
There are many factors to failure. No one thing can cause devastation without a raft of other events or failures to support it. If the bank failed because people couldn’t pay the loans back, why has nobody asked the question why? Not why did they lend to people who were high risk, but why are there high-risk customers in the first place? Is it greed and desire to live well like the wealthy, or has the cost of living risen to the point where we need to borrow for the basics?
There are so many factors to account for the problems that arose. Poor business sense, poor paying jobs, poor education, poor management and many others are included. It would be naive to say only one thing caused the cascade. Minimising risk in the future may be possible, but it won’t be easy. It would take open and honest communication, better education for our customers and some more enduring business decisions.
Customers of loans, credit and mortgages can be questioned and analysed to the nth degree, but still turn into loss risks. It could be time for those who borrow to be smarter about doing it. Instead of the banks taking responsibility, those that borrow must question their limits. Customers should examine their expectations and spending habits more deeply. Schools and colleges do little to help the situation. Basic budgeting at the age of 14 will bear no resemblance to any life experience that individual has. The education can then become meaningless as it is not used in real life.
Money management does not come easily to the vast majority of people who use credit cards daily. This may be to do with a lack of expectation or education, or it may be culturally acceptable to live in debt. There are, in fact, too many factors to list here that may or may not be involved. Fortunately, the internet revolution offers many the schooling that has so far been lacking. Anyone can find a website about budgeting, reducing debt and living within your means. Times are shifting. Wealth maverick is hoping to provide financial advice and resources online along with the hundreds of other online blogs, pages and apps. The ‘buy what you want when you want it’ mentality may soon be coming to an end as people realise the dangers of debt.
This in turn will push business managers to find innovative new methods to increase demand in their products again. Materialism isn’t going to disappear, but maybe some will cap what they have in their lives. Of course, there are some products and services that have become ‘essential’ items to everyday life. Luxuries from the 80s like cell phones, computers and prepared foods are now necessities for our day to day living and lifestyles. While fitness was for the few, now the vast majority of us are using gyms, fitness classes, apps and diet programmes. Times change, and so do attitudes.
Is there money to be made from these new attitudes? This is an interesting question, as so much information, both good and bad, is available for free now. That is not to suggest that businesses only profit from the naive and under educated in the population. But it may be that keeping up with the opinions and depth of information people are exposed to could be too challenging for some businesses. If it can be found free, why would anyone pay for it? Even the apps business only charges pennies per sale. This has changed businesses into volume sales machines. You must go where the most like-minded people will be.
It hasn’t been easy to remain profitable in the last few years. Many businesses couldn’t continue trading at all. Marketing has changed so dramatically during that time, one can’t help wondering if there hasn’t been a more cohesive link. Has the increased time and traffic online contributed more substantially to the dramatic changes in the finance industry? Are those that expect much for free and can find it online, the ones to blame? There will always be questions, and many opinionated answers. A marketer’s role is to look forward, but only once they truly understand the present and, perhaps, the past.
Finding new channels, and the best quality customers will continue to increase in difficulty when it comes to financial products. Few outside the industry trust it. Nobody within the industry would dare utter their feelings either way. The only certainty and comfort in this matter is that no-one wants it to happen again.