Bank crisis: the feeling’s (not) mutual

Image of a Britannia buidling society hot air balloon from

A lot of hot air? Britannia started ‘building a fairer society’, but they’ve ended up damaging the Co-Op bank’s reputation.


Back in the heady days before the banking crisis, building societies were falling over themselves to demutualise and turn themselves into PLCs.

To be fair, there may have been a degree of self-interest involved, as members of mutuals fell over themselves to turn the somewhat abstract benefits of their ‘ownership’ of the old organisation into the very concrete benefits of owning shares in the newcos.

Eventually, the field was reduced to just two: Britannia Building Society and Nationwide.

Under the leadership of Neville Richardson, Britannia made a massive play of its mutual status. Its advertising loudly proclaimed that it was ‘building a fairer society’. Because it was a mutual, savers and borrowers got a better deal.

And then the crisis bit with a vengeance. Britannia seems to have been caught in a very bad place indeed. it merged with the Co-Op bank in very quick time indeed. Mr Richardson was chosen as the ideal man to lead the new organisation, which was of course, still a mutual. (“Good with money” was the Co-Op bank’s strapline at the time.)

Alas, it turns out not to have been true. Among other factors, the liabilities that Britannia had saddled itself with have now brought the Co-Op bank to the table for more funds. £1.5 billion more funds. They’ve called it a ‘bail-in’ but it’s still going to give creditors a serious headache. It’s one of the reasons why the Treasury told the Co-Op bank it could forget all about the deal to buy the ‘spare’ Lloyds TSB branches that they were being forced to sell – which in turn has stymied the Co-Op’s efforts to become a genuine competitor to the big banks.

But it isn’t all bad news for the Co-Op. Oddly enough, the Co-Op bank doesn’t seem likely to be burnt by the bail-in. Normally, the shareholders have to lose the farm before anyone starts telling creditors that they have to take a ‘haircut’. That’s one of the reasons why bonds are conventionally seen as a less risky investment than equity.

That isn’t the case here.

Nor has Mr Richardson lost much, apart from perhaps a little sleep. He left with a payoff reported at £4.6 million and a job as a non-executive director at M&S Bank. He resigned from that role in high dudgeon yesterday.

The only loser (apart from the creditors) is the mutual movement itself, which has seen one of its prime movers disappear altogether, and another lose much of its lustre.

Thank heavens for Nationwide. At least they never set themselves the task of ‘building a fairer society’. They’re happy to tell us they’re ‘on your side’. It’s a less motivating, but perhaps more realistic aim. 

And at least we have one reliable non-PLC choice when it comes to finding a big player to look after our money.





Why Facebook is pinging annoying

Old phones from

Old telephones were specially designed to irritate everyone in the whole house. Is this kind of user experience really a good idea for Facebook?

Some of you may have noticed that, a short while back, Facebook added a new ‘ping’ sound to notify you when you receive a post. It sounds like this

The chord the notes play is Fmaj7, and it’s made up of the notes F, A, C, and E, and spells the word ‘FACE’. Apparently, this is a happy accident. It’s actually based on the ring-tone of an old-fashioned (ie analogue) telephone.

Here’s what Everett Katigbak, an early brand designer for Facebook, had to say about it on Quora

“The intervals are 2 major thirds, F-A, and C-E. The major third trill is what is used on old school telephones. There were several iterations on this, but the first instance where the chord was used, was as the video calling inbound ringtone. It is the base arpeggio in two pulses: F-A-C-E, F-A-C-E. We went with the two pulses because this resembles a majority of international ring variations.

It also contains a minor 3rd interval, A-C. Descending, this interval is the same used in the common doorbell (ding-dong), which conceptually reminded me of when a friend would show up at your house. It is also the quintessential “DIINNNNEERRR” or “LAASSSIIIEEE” call out, which again, is a very nostalgic pattern.”

Irritating people is never a good idea

Musicology aside, I think what Everett is missing is the fact that old-school telephones were really annoying. There was only ever one in the house, and it was in the downstairs hall. That meant no one was ever near it when it rang, because the hall was cold, draughty and uncomfortable. So the ring had to be loud enough to be heard throughout the house, and irritating enough to make the person at the top of the house tramp down the stairs and pick up the phone before shouting to whoever the call was for.

Now, why ever should Facebook need an irritating ringtone?

It used to be that Facebook held everyone’s attention all the time. (I remember a colleague of mine being told off by her boss because she’d received an average of 700 email notifications of Facebook comments every month for the last 12 months.) It was seriously sticky back in those days.

It certainly didn’t need a ringtone to irritate people into paying it attention.

But now, apparently, it does. And there can only be one reason for that: because people have stopped paying Facebook attention. Yes, they’re still on Facebook, but they’re no longer on Facebook. Their interest levels are declining, and they’re getting their social buzz elsewhere, like twitter, or Instagram, or more likely Pinterest. Their involvement is so passive that they need Facebook to ring them when something’s happening. That doesn’t betoken a genuinely high level of engagement, does it.

And that lack of engagement is a real problem for Facebook. They don’t control the content; their members’ social group does. And if that content gets uninteresting, then people are just going to drop off.

Terminal decline?

Almost everyone in the world who could realistically sign up for Facebook, already has done, so the figures for active users can only decline. And there’s precious little the media owner can do about that. It can’t make my former colleague Mary still use Facebook to tell her friends she’s had a really nice cup of coffee/meeting/night with a lovely man if she’s already telling them in some other way.

All it can do is make sure that on the rare occasions Mary does use Facebook to tell the world her momentous news, the world knows she has done so: by making an irritating ringing sound. I’m not sure this is what anyone would call a good user experience, is it?

Unfortunately it can’t stop them a) turning their sound down to ignore the irritating sound b) not signing into Facebook any more so that the irritating ringing sound is no longer a problem.

If a) and b) continue to happen, no amount of musicology is going to stop Facebook from losing money. Lots of it.

Why bad user experience is a bad problem

And that, more than the musical origins of the tone is what really matters here. User experience matters. Bad user experience matters more than good user experience, because it generates an instant response.

It’s like when you want to get someone’s attention. If you go around like a toddler shouting ‘Mummy’ and pulling at people’s metaphorical skirts, how likely are they to respond positively to you? But if you’re charming and winning and have something they want, like a lovely smile, you won’t need to pull at their skirts because they’ll already be coming to you.

Facebook needs to do something about the standard of its content, rather than creating irritating ringtones, however nostalgic they may sound. They need to get more people back using the service as a cornerstone of their life. Otherwise someone else is going to win.