Commercial: What if Saatchi & Saatchi had bought Midland Bank?

Prompted by this story in the London Evening Standard last week, which in turn reminded us that Maurice Saatchi can generally be found behind some intriguing ideas – and who wouldn’t want to own a piece of Fred the Shred’s former kingdom? – I’d like to suggest an idle diversion, or perhaps an abstract for a short piece of counterfactual history.

It’s generally accepted that Saatchi & Saatchi’s bid for Midland Bank in 1987 was the beginning of the end, deadly imperial over-reach, hubris on Charlotte Street.

Sure, sure – apart from the fact that most of the people saying that were the people who had most to lose from a change to the status quo in The City. You know, the same geniuses who led us into the worst financial crisis since the Depression.

Here’s the thesis: if Saatchi & Saatchi had succeeded in buying Midland, we wouldn’t have had the financial crisis.

Unlikely? Hear me out.

A Midland bank, at the time the 4th largest bank in Britain, owned by an ad agency would have been forced to become far more customer-centric. So far, so common sense. But I’d go farther and suggest that, as part of that, there would have been a far slower rush into business areas which were more innovative – which in the financial world appears to be synonymous for ‘opaque’ and ‘impossible for outsiders to understand’.

Because there would have been a far greater concern for reputational risk. Because the questions, ‘What are we doing? How are we doing it? Why are we doing? And can we explain it to the outside world?’ would have been asked a lot sooner.

Basically, it wouldn’t have been the quants running the institution. It would have been the marketers. And by having people in charge who would act like faux-naifs, and worry about how it would look if the bank was caught with its pants down, I’d argue that a lot of excess would have been curbed, or at least slowed.

I’d go further and argue that a focus on customers would have meant that Midland became more successful, and in turn its success would have attracted other non-traditional players into the financial services market. With more and more new entrants with a non-banking background coming in, this virtuous focus on serving people with utility financial services would have spread, to the point at which any dangerously risky behaviour would have been very easily isolated and ring-fenced.

Oh sure, this is balloon-floating of the highest order, but as exercises in virtual history go, hypothesising alternative modes for the development of both banks, and ad agencies, would seem to be a useful thing to do from time to time.