Interesting goings-on in the UK, as HSBC suffers the full force of Facebook and changes its graduate overdraft fee policy in what one
Times journalist dubs a "humiliating U-turn"....
Here's a very quick summary of what happened. In the UK, most banks understand that when students leave university, they're generally a bit hard up and need as much financial help as possible. To this end, they don't charge them interest for a year or so after they've graduated.
This approach works because the grads feel like the bank is doing them a favour, which generates loyalty, and the banks are happy as they see it as a loss leader, a way to secure that graduate's income flow for life (we Brits are a bovine, indolent lot so once you've got us, you'll very likely keep us).
But then at the beginning of August HSBC started charging interest of 9.9% on graduate overdrafts of up to £1500. Cue a load of fairly belligerent, anti-HSBC activity on Facebook, which, according to Wes Streeting, NUS vice-president, helped "mobilise students". The screengrab below will give you a rough idea of what I'm on about, and there's a lot more if you dig a little deeper.
Anyway, a few weeks and endless Facebook protestations/clamourings later and HSBC has scrapped the fees, refunded any interest paid and is standing slightly red-cheeked, its tail firmly between its legs.
So the moral of the tale for card marketers is, don't underestimate the consumer these days. Because social networking sites like Facebook are really empowering that damn consumer.
Btw, what struck me as most worrying for HSBC UK is the words of its general manager, Joe Garner, who, in the same
Times article, said: "We would love to go on Facebook and we have been having a discussion around that, but it's uncharted territory.”
Oh come on, Facebook isn't rocket science, it's just a group of people hanging out online and the only things you need to survive in it, and get people back onside, is honesty and the ability, from time to time, to hold up your hands and say, OK, we've messed up. That's it.
But HSBC didn't, they went through the usual channels, and while the students are satisifed with their U-turn, they didn't get to meet HSBC face to face, so-to-speak, in their own environment — in the bearpit. If HSBC had gone in, they would have commanded a lot more respect and lost a lot less customers than the number they will almost certainly lose in the weeks and months ahead.