Can the FX industry ride the incoming wave of socially conscious traders? – Guest Editorial
Jordan Schneir, of Scandinavian Capital Markets looks at charity, sponsorship, and managing perception with genuine mindfulness from the perspective of the new generation of traders
By Jordan Schneir, Scandinavian Capital Markets
It seems like an uphill battle for the foreseeable future. The market continues to spiral, and all anyone can talk about is COVID-19. Both established and growing Forex brokerages have historically focused on getting their name out there for a piece of the pie but now seems to be the time to take inventory (so to speak) and evaluate what will keep things going. Is charity contributions on that list of priorities? Is it even part of the discussion? Now may be as important a time as ever for brokerages to sit down with their PR departments to develop a strategy.
What PR department?
Most brokerages focus on formula 1 or football (soccer) sponsorships where they expect their clients to be watching if they focus on anything at all. There was indeed a firm that has an ongoing sponsorship with a swimmer bringing awareness to water… or something. You know because they plastered their logo front and center on the sleek four-minute video. Oh, it was something about the oceans.
Now to be sure, one can assume that these companies certainly care about the charities they choose to sponsor, be they few and far between. And indeed, the larger umbrella firms have a charity wing thoughtfully calibrated in addressing needs, primarily poverty. Many transmit funds to highly recognized global brands such as UNICEF, Rotary Club, or the Red Cross. Perfectly understandable that banks and other financial corporations would want to show their customers their commitment to global stewardship.
This is the tried and true method of sponsorship and charity…an essential component in all industries, especially in large multinational brands.
On the other hand, Forex brokerages, with some exceptions, don’t seem to make it as much of a priority. Despite the trillions in transactions and many millions paid out, this is low on the list.
Ready or not, here they come
The upcoming generation of traders are conscious of where they choose to do business. Social responsibility is a corporate priority because younger consumers are more diligent than ever in considering brands that support causes. In a time where global pandemic is threatening everyone’s livelihood, and banks, brokers, and capitalists and general are falling out of favor, why shouldn’t philanthropic endeavors be of particular consideration?
Some brokers may say, “I’m a millennial myself. I largely believe in these causes, but I can’t worry about winning someone over.” There’s too much work to be done it seems, and what is the reward? Perhaps the cold and indirect nature of financial trading means that such work will always come off as insincere. But why do the larger firms try anyway?
Our co-founder Michael Buchbinder recently wrote a piece about using giving to keep you grounded. He relays a practical approach to giving, arguing that charitable giving not only improves your corporate reputation but can improve your performance. With traders always immersed in their work, charitable giving creates an avenue to take a break and return to the real-world from time to time.
Giving back and staying on brand
It’s easy to understand how smaller consumer brands can gain a foothold in the market with charity, and some even build their business model around it.
Remember Toms shoes from about a decade ago? Customers bought a pair of moderately priced shoes with the promise that a second pair would go to someone in need. Even today, this company is still in business with new designs, even though their popularity has waned.
We can think of numerous companies of all sizes that promote various causes. Whether it be co-branding with a quality clothing line, a creative viral social media adoption campaign from Wendy’s, or even a mom and pop restaurant sharing a little bit off the top, these initiatives work for many different types and sizes of businesses. Even mega-corporation McDonald’s has one of the most successful and generally well-respected charities in the Ronald McDonald House, and the Golden Arches have certainly faced public disdain over their lifespan for a plethora of reasons.
At Scandanavian Capital Management, we’ve chosen Bow Sailing as our charity we sponsor. They provide underprivileged children summer camps that teach them sailing skills with practical meditation. The stories from these youths showcase how small activities make a huge impact in their lives.
So what can be done?
It still sounds daunting, even if a Forex brokerage firm takes time and resources to create an initiative or come out to support a cause, how effective can it be? Can an industry with sketchy and cold reputation ride the incoming wave of socially conscious traders?
There is indeed more to public perception than picking the right charity, but it’s a start. Selling intangible assets and sponsoring a formula 1 driver doesn’t have the same hook as a water bottle company providing clean water to a depressed tribal village. But that doesn’t mean can’t make an effort for a cause that elevates the brand and comes from a place of genuine concern.
As brokerages seek to keep their clients ahead, should they not seek out a cause that would help enrich the needy more directly and tangibly? Perhaps this begins at a local level like Invast Global’s support during the Australian Brushfire crisis. Despite the global nature of Forex trading, these companies have a home base. Drawing attention to the immediate need, the neighborhood nearby, for example, may be a message that resonates with clients on the other side of the world.
Some great examples include Octa FX help with the Saints Foundation at Saint Mary’s stadium or FBS offering assistance to Children’s Cancer hospitals. Even irregular givings provide invaluable support that allows these charities to survive.
Give and mean it
There is nothing wrong with considering a charity at an international level with a pedigree of organization and effectiveness, especially as it ties in with a brand’s commitment to lifting as many people as possible into a better standard of living. Forex brokers should be conscious of supporting global charities. Sponsorships aren’t wrong in bringing brand awareness.
However, this new wave of consumers, investors, and traders believe that genuine concern and effort comes from the heart. The coronavirus has motivated individuals to assist laid-off workers at the grassroots level. Many companies are doing their best to continue to pay employees even though their doors are closed, while others can’t or choose not to. The fact is that everyone feels like their hands are tied. But times like these are the best time to make an effort, it may pay dividends as things return to normal.
The world is at a crossroads in this interconnected economy, as fears of illness and recession are top of mind. But confidence and loyalty are built when a brand has a vision beyond the next transaction. That will certainly look different for a Forex firm than it will for many other companies, but it will be an integral part of a brand’s legacy. It should be faced head on with partnerships that convey to clients a vision of productivity and flourishing for all.
Photo courtesy of Bow Sailing, a charity supported by Scandinavian Capital Markets
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