The Beatles; the Stones; U2 and now… One Direction. The list of UK exports that have managed to break the US is an illustrious one. And short! Why? Perhaps the Americans just don’t ‘get’ Brits’ musical tastes.
You may have started reading this post and wondered why on earth it’s appearing on the site of a business concerned with finance and technology. You’d be right to. Except… there are parallels we can draw between British music acts’ efforts to crack the US and our own financial services industry’s trials in doing the same. Certainly the rewards are enough to have prompted many to try; and the market is tricky enough that almost as many have failed. Indulge us for a moment as we consider what else we can learn from this analogy…
You can imagine what might appeal musically to a San Diego resident confounding New Yorkers. And music loved by people on the windy streets of Chicago may have no place on the beaches of Miami. They are just too far apart, geographically and culturally.
This compares to the multi-layered American regulatory system. Given the size of the nation, regulations are broken down from a federal to a regional state level. This is obviously very different to what the UK, a land size slightly smaller than the state of Oregon, is used to and can cause real confusion on what compliance looks at when they first reach America.
America has 50 States. All of which have their own financial regulatory bodies, which can act independently of each other. So just as a band can tour the UK in three or four major cities, touring the US will feature at least three times as many dates, all of which costs more in time and money.
The Dodd Frank Act, introduced in 2010 to try to address this issue has, so far, only complicated matters further. It’s added another three regulatory bodies to an already packed sheriff’s office and introduced hundreds of new guidelines, spawning potentially thousands more rules. All of which can be overlooked locally by States if they feel it’s for the ‘good of consumers’. The cost of compliance requires a huge investment in time and money.
Regulation is often seen as hurdle but it can be a good thing. More often than not, having regulation is better than having none at all, even when the regulatory landscape is as complex as that of the US. The temptation is to think of the US as one homogenous country but it is critical to remember each state has its own rules and regulations.
As our short list of successful musical exports will understand, breaking America is worthwhile for those with the gumption – and the planning – to pull it off. Many have failed; many should never have tried but, for those who make it, the rewards are significant.
For the time being, we’ll certainly watch with interest as the Dodd Frank Act makes its way in to the rule-books. Maybe there is a company with the genuine X-factor who is ready to make a splash across the pond.
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