Branding the banks: It's time to get innovative
Aftab Mahmud Khurshid | Sunday, 10 August 2008
Branding has certainly become the buzzword in financial area in 2008! A Good Brand is like gold in the vault in case of financial industry. A quantum leap is occurring in the influence of brands in financial services recently.
In the UK and US markets the increasing consumer interest in financial decision-making is forcing companies to invest in brand building exercises with consumers. This, we think, is reflected in Bangladesh, also. Trust Bank started their re-branding initiatives in 2006, Later AB bank change their logo. This was followed by City Bank. City Bank has changed their corporate identity to move ahead another 25 years. Oriental Bank is taken over by ICB Islamic Bank. But only changing logo is not branding; changing logo is not enough if you don't shift your attitude, change the culture and activities along with it. It is directly related with the overall business strategy of the bank.
Renowned brand coach Ted Matthews said; a brand is what people think of you. "Rebranding is really not that much to do with the look, it's about communicating what you are doing and why you are doing it to your various markets".
A brand represents the sum of all experiences over time between an individual and a company, product, or service. A brand represents an expectation, a level of quality and it is a measure of trust. It is more than a logo. In our country branding is widely misunderstood by advertising or public relations (PR). Basically these two are tools or communications, means of brand building.
Branding is transforming the way financial services.
Interbrand conducted a survey designed to answer that question. They have asked 24 financial institutions around the world how their principal customer brand is used and managed, both externally and internally.
The answers reinforce the increasingly held view that the brand is fast becoming the major competitive asset for financial services companies. But more importantly, the answers also show that the role of the brand within the management of business is changing dramatically. Although some long-established banks and insurance companies still see their brand merely as an aid to awareness and recognition, the new entrants and those institutions that are radically transforming themselves put the brand at the center of their corporate strategy.
This means they are aligning all their communications, operations and systems to their brand mission and values. In addition, they are working to make all of their employees effective ambassadors for the brand.
Kenneth Chermault, Vice-Chairman of American Express, who once said in an interview, "While there are many directions a financial services company can go today, we will only do that which supports the growth of our brand."
In other industries it is well accepted that putting the brand at the center of corporate strategy is critical to success: BMW, Coca Cola and Tesco are good examples. Now we can see that some financial services companies take that line.
Branding is a relatively new concept for the financial industry.
They are slowly realizing that they need to manage their strategic assets, too.
If brands are a strategic asset, then how the idea of managing a brand is a new one for the industry, as many financial services firms have historically perceived brand management as only relevant to consumer goods. Thus the opportunity exists for banks to gain competitive advantage by investing in brand management and enjoy the business performance benefits.
To create a truly powerful brand, you need to establish a sense of belonging, friendship, and dependability between products and customers. This really makes sense in every aspect.Strong brands command premium prices and reduce customer acquisition costs.
The benefits of strong brands affect employees as well. People are naturally attracted to firms with strong brands. This often translates to a better pool of talent applying for positions and greater employee retention over time. It is noteworthy that so few financial services firms commit to actively and consistently managing their brands. The results of the annual Interbrand survey in 2002 showed that only six (Citibank, Morgan Stanley, Merrill Lynch, JP Morgan, HSBC and Goldman Sachs), out of 75 of the most valuable global brands, are bank brands. Now, the scenario is more interesting, more banks and financial institutions are added there in the top 100 lists.
Also the brand rankings of major financial institutions based on the Interbrand data are published annually by Business Week. According to that data published in 2007, Citi was in top-ranked.
Source: Business Week 2007
Using the top 100 brands data published annually by Business Week, that can be tracked back to the start of the brand surveys in 2000. One of the first things to be noticed was that, in 2001, there were four financial services firms in the top 100. By 2006, though, there were 9. New entrants came in between 2001 and 2004.
According to Global 500 Financial Brands Index- 2007 published in 2008, HSBC has got the number one position and was top-ranked banking brand globally, which was possessed by Citi in 2006 by the Global Financial Brands Ranking 2007 realized by Brand Finance. HSBC has been named the world's most valuable banking brand according to the Banker magazine's Top 500 Financial
Brands listing. Last year's Interbrand study of the world's most valuable brands across all sectors saw HSBC jump five places to 23, the second best growth performance of the top 40 companies surveyed.
Source: Global 500 Financial Brands Index- 2007
Dan Roselli, brand and advertising executive for Bank of America once said by mentioning the Coca-Cola trademark as an example: Its brand is worth more than all the rest of the company's assets, including the secret formula. If a brand's promise is appealing enough, it can overcome competitive disadvantages, including price, because consumer appeal is based on benefit as well as price.
A powerful brand is differentiated and relevant to its target audience, a service brand can communicate its promise through advertising, but it must be built through action. Identifying and articulating a brand vision at any bank is not that easy because employees to live it in front of the customer every day. Because the company's employees are, in a sense, "always on the stage," they are the face of the bank.
If the bank doesn't get the promise right, it doesn't matter how effective the communication is. A brand can have impact, whether a bank manages it or not.
Now the "experience" economy has arrived. A brand experience as the feelings or expectations of your customer that are evoked during every interaction at every touch point with people, products, service, process, and technology and branches are like 'shop" or "stores" now. That is why the bank might try to use their branches to create the right branded customer experience in future. So, it's the time for a bank to get more creative to face the competition. If any bank wants to fulfill their promises, they must go back to basics i.e. customer services. This may provide world-class customer experiences. In terms of accuracy, efficiency, courtesy and showing. So for service brands, the key differentiator is the quality of the relationship promised to the customer. Differentiated, memorable and consistent branding is the way to communicate this.
For many banks, the idea of managing a brand is a new one, and many firms have perceived brand management as more relevant to consumer goods. As a result, financial services firms are not likely to have strong brand management capabilities in-house.
Solid brand management plans and strong people in place can give you competitive advantages and, ultimately, improve business performance. Also it is wise to work in positive environment to building brand effectively. "Trying to convince a skeptical CEO about the value of branding is like trying to push water up hill," explained Roselli. "Go to work at a company where the CEO already understands."
However, financial services firms can transform this challenge into an opportunity to tailor a more comprehensive plan for growth.
So, it's time to get banks more innovative. Start branding without breaking your bank.
The writer is a brand strategist working in a bank. Recipient of 2007 Global Brand Leadership Award in Asia Brand Congress, he can be reached at:
aftabmahmud@yahoo.com
In the UK and US markets the increasing consumer interest in financial decision-making is forcing companies to invest in brand building exercises with consumers. This, we think, is reflected in Bangladesh, also. Trust Bank started their re-branding initiatives in 2006, Later AB bank change their logo. This was followed by City Bank. City Bank has changed their corporate identity to move ahead another 25 years. Oriental Bank is taken over by ICB Islamic Bank. But only changing logo is not branding; changing logo is not enough if you don't shift your attitude, change the culture and activities along with it. It is directly related with the overall business strategy of the bank.
Renowned brand coach Ted Matthews said; a brand is what people think of you. "Rebranding is really not that much to do with the look, it's about communicating what you are doing and why you are doing it to your various markets".
A brand represents the sum of all experiences over time between an individual and a company, product, or service. A brand represents an expectation, a level of quality and it is a measure of trust. It is more than a logo. In our country branding is widely misunderstood by advertising or public relations (PR). Basically these two are tools or communications, means of brand building.
Branding is transforming the way financial services.
Interbrand conducted a survey designed to answer that question. They have asked 24 financial institutions around the world how their principal customer brand is used and managed, both externally and internally.
The answers reinforce the increasingly held view that the brand is fast becoming the major competitive asset for financial services companies. But more importantly, the answers also show that the role of the brand within the management of business is changing dramatically. Although some long-established banks and insurance companies still see their brand merely as an aid to awareness and recognition, the new entrants and those institutions that are radically transforming themselves put the brand at the center of their corporate strategy.
This means they are aligning all their communications, operations and systems to their brand mission and values. In addition, they are working to make all of their employees effective ambassadors for the brand.
Kenneth Chermault, Vice-Chairman of American Express, who once said in an interview, "While there are many directions a financial services company can go today, we will only do that which supports the growth of our brand."
In other industries it is well accepted that putting the brand at the center of corporate strategy is critical to success: BMW, Coca Cola and Tesco are good examples. Now we can see that some financial services companies take that line.
Branding is a relatively new concept for the financial industry.
They are slowly realizing that they need to manage their strategic assets, too.
If brands are a strategic asset, then how the idea of managing a brand is a new one for the industry, as many financial services firms have historically perceived brand management as only relevant to consumer goods. Thus the opportunity exists for banks to gain competitive advantage by investing in brand management and enjoy the business performance benefits.
To create a truly powerful brand, you need to establish a sense of belonging, friendship, and dependability between products and customers. This really makes sense in every aspect.Strong brands command premium prices and reduce customer acquisition costs.
The benefits of strong brands affect employees as well. People are naturally attracted to firms with strong brands. This often translates to a better pool of talent applying for positions and greater employee retention over time. It is noteworthy that so few financial services firms commit to actively and consistently managing their brands. The results of the annual Interbrand survey in 2002 showed that only six (Citibank, Morgan Stanley, Merrill Lynch, JP Morgan, HSBC and Goldman Sachs), out of 75 of the most valuable global brands, are bank brands. Now, the scenario is more interesting, more banks and financial institutions are added there in the top 100 lists.
Also the brand rankings of major financial institutions based on the Interbrand data are published annually by Business Week. According to that data published in 2007, Citi was in top-ranked.
Source: Business Week 2007
Using the top 100 brands data published annually by Business Week, that can be tracked back to the start of the brand surveys in 2000. One of the first things to be noticed was that, in 2001, there were four financial services firms in the top 100. By 2006, though, there were 9. New entrants came in between 2001 and 2004.
According to Global 500 Financial Brands Index- 2007 published in 2008, HSBC has got the number one position and was top-ranked banking brand globally, which was possessed by Citi in 2006 by the Global Financial Brands Ranking 2007 realized by Brand Finance. HSBC has been named the world's most valuable banking brand according to the Banker magazine's Top 500 Financial
Brands listing. Last year's Interbrand study of the world's most valuable brands across all sectors saw HSBC jump five places to 23, the second best growth performance of the top 40 companies surveyed.
Source: Global 500 Financial Brands Index- 2007
Dan Roselli, brand and advertising executive for Bank of America once said by mentioning the Coca-Cola trademark as an example: Its brand is worth more than all the rest of the company's assets, including the secret formula. If a brand's promise is appealing enough, it can overcome competitive disadvantages, including price, because consumer appeal is based on benefit as well as price.
A powerful brand is differentiated and relevant to its target audience, a service brand can communicate its promise through advertising, but it must be built through action. Identifying and articulating a brand vision at any bank is not that easy because employees to live it in front of the customer every day. Because the company's employees are, in a sense, "always on the stage," they are the face of the bank.
If the bank doesn't get the promise right, it doesn't matter how effective the communication is. A brand can have impact, whether a bank manages it or not.
Now the "experience" economy has arrived. A brand experience as the feelings or expectations of your customer that are evoked during every interaction at every touch point with people, products, service, process, and technology and branches are like 'shop" or "stores" now. That is why the bank might try to use their branches to create the right branded customer experience in future. So, it's the time for a bank to get more creative to face the competition. If any bank wants to fulfill their promises, they must go back to basics i.e. customer services. This may provide world-class customer experiences. In terms of accuracy, efficiency, courtesy and showing. So for service brands, the key differentiator is the quality of the relationship promised to the customer. Differentiated, memorable and consistent branding is the way to communicate this.
For many banks, the idea of managing a brand is a new one, and many firms have perceived brand management as more relevant to consumer goods. As a result, financial services firms are not likely to have strong brand management capabilities in-house.
Solid brand management plans and strong people in place can give you competitive advantages and, ultimately, improve business performance. Also it is wise to work in positive environment to building brand effectively. "Trying to convince a skeptical CEO about the value of branding is like trying to push water up hill," explained Roselli. "Go to work at a company where the CEO already understands."
However, financial services firms can transform this challenge into an opportunity to tailor a more comprehensive plan for growth.
So, it's time to get banks more innovative. Start branding without breaking your bank.
The writer is a brand strategist working in a bank. Recipient of 2007 Global Brand Leadership Award in Asia Brand Congress, he can be reached at:
aftabmahmud@yahoo.com