Financial services needs to stop fixating on “gaps”

Lucian Camp is a financial services brand consultant, copywriter, author and blogger. He co-presents the On The Other Hand podcast.

I’m sure I’m not imagining it:  there’s been another upsurge in the use of a particular three-letter word recently.

That word I’m thinking of is “gap.”  Its first use in financial services, ChatGPT tells me, goes back to 2007, when we first started hearing about the “protection gap.”  Since then, we’ve had a second wave focusing on the “retirement gap”, and now we’re well into the third wave which is all about the “advice gap”.

And I must say, the more I hear about this succession of gaps, the more unhappy I become with the whole concept, and the more I worry that it’s a concept that does much more harm than good.

Let’s just pause before we go any further to ponder what a very odd idea it actually is.  The world of consumer products and services is made up of millions of hugely un-saturated markets.  Vast numbers of people don’t use an air-fryer, and don’t have a roof-box on their car, and don’t wear a bobble-hat when it’s cold.  But we don’t talk about an “air-fryer gap” or a “roof-box gap” or a “bobble-hat gap.”  We can understand, if we come to think about it, that there is a gap between the number of people who have chosen to buy these things and the much bigger number who could choose to do so.   But we don’t come to think about it, or not very often.  We could say there’s a “gap” in these and millions of other product or service markets, but we don’t.

So why are financial services different?  Why are we so keen on the idea that there are gaps in people’s arrangements when it comes to their protection, or retirement, or access to financial advice?

I think that ultimately, it’s because many of us just can’t get past the idea that these are shortfalls that just shouldn’t happen.  That in a properly ordered world, everyone (or every family) would be fully protected against financial misfortune, and fully invested to provide an excellent quality of life in retirement, and fully advised so that they find the best possible solution to any financial issue they encounter.

Needless to say, for almost all of us, this is completely unrealistic.  We can’t aim for perfection in our financial lives, any more than we can aim for perfection in our working lives, or our personal lives, or our leisure activities, or anything else.   A model that starts with a definition of perfection, and then goes on to express our situation in terms of how far short of perfection we’re actually falling, is stupid and unhelpful.

It’s stupid and unhelpful for our customers because it sets the bar so high that they can’t be bothered even to try jumping over it.   And it’s stupid and unhelpful for us because it means that when we’re designing our products, services and processes, we take the view that the very large majority of potential customers are bound to fall so far short of perfection that they aren’t worth bothering with.

Marketing, and the whole workings of our consumer society, are about the art of the possible.   They’re not about seeing anything short of perfection as a failure.  If I devise a campaign that sells 100,000 air fryers, I’ve done very well.  I’ve doubled or tripled my firm’s customer base and made a ton of money, not narrowed the air fryer gap by 0.5% but left 69 million people still lacking proper toasted-sandwich-making facilities .

I’ve seen and heard an awful lot of people in our industry spend an awful lot of time and effort in recent years worrying about “gaps” of one sort or another.  I’d be much happier if they’d put the same amount of time and effort into working up products, services and propositions that they could then successfully persuade people to buy.