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Stronger branding needed for financial services Back  
An increasingly crowded market place and higher customer expectations mean financial services need to engage customers on a more emotional level. Philip Barlow suggests they can achieve this through branding.
It is a truth universally acknowledged that the financial service sector has been poor at recognising the power of brand as an integral part of their business model and hence has been slow to invest in building powerful and robust brands.

However, there are signs that certain things are changing, mergers are coming to the market in a very dramatic fashion - UBS is an example and HSBC is now branding its global retail operation under the one master brand.
Higher customer expectation in terms of better access, product and service together with more opportunities to communicate directly with customer through CRM technology are putting more and more demands on financial organisations.

This means financial services companies (and not just in the retail sector) must look to engage the consumer at a more emotional level if there is hope of differentiating oneself successfully in a crowded marketplace. A branded model of business is the most effective way for these organisations to re-align themselves.
Traditional financial services organisations will have taken sharp note of penetration into the market of non-traditional companies such as Tesco and Superquinn. They have had success with no previous experience, by leveraging their existing brand equities. Significantly they can now bring all their experience of building sustainable relationships with their customers through brand to this market.

The global brand agency Interbrand has recently conducted a survey of 24 financial institutions around the world and asked specifically how they managed their principal customer brand. The results reinforce the theory that the financial services industry is changing its views and now sees that the brand is becoming a major competitive asset for the company.

Some long established banks and insurance companies still only saw brand as an awareness aid and that it was only the newer market entrants and the more progressive organisations which were really investing in brands and putting it at the center of their organisations. For these organisations it means they are leveraging value for their brand not just as an external force but internally, as a means to focus and glue the organisation together through a common brand ideology. Kenneth Chennault, vice chairman of American Express said ‘While there are many directions a financial services company can go today, we will only do that which supports the growth of our brand’.

Visual System Model
For this sector, brand has classically played its role as a visible marque for the company that visually displays and tries to differentiate itself from competitors. This humble beginning for brand has developed significantly over time which has seen development of visual identity systems which ensured a consistent delivery of the brand and a distinctive ‘house style’ which could be instantly recognisable by the consumer.

The type of identity systems which are concerned with classic elements (soft factors) such as name, logo, visual style, advertising, PR, etc. have only one audience in mind - the consumer. There is no flaw in this except that there is more to be leveraged. And even when this ‘more’ is achieved it does not dilute the effectiveness of the external customer orientated approach.

There is more to a brand than these external manifestations. The brand can define relationships with all audiences including investors and employees. The successful brands of the future will align the soft factors with harder, more conventional business issues such as business process, strategy, finance, operations, training, recruitment, etc.

Total brand experience
The vision and values ideology is understood and ‘lived’ by the organisation. Employees have the same type of relationship with the organisation as the external customers - the main drive behind interaction is through brand. This marriage of hard and soft factors will define the great brands of the future. The key is to take a holistic view and engage the external audience, but also galvanise the internal audience though a well conceived ideology. In the financial services industry both in Ireland and the UK, the major institutions have in general developed a reasonable level of coherency in their visual identity.

New Brand Model
We have seen many new financial services offerings emerge which use brand to define their offering - these include Smile.co.uk, Egg, First e and B2. These new brands have emerged from under the wings of established and respected masterbrands. The established corporate brand is reserved for the more traditional offering with the newer more dynamic brand moving into the new breaking space.

These newer brands have looked to capture the spirit of the brand within the experience. This enables differentiation from the mother brand and also positions the offering dynamically with the audiences. Critically it is the bankers in these organisation and not simply the marketing department who see the brand as the key ingredient in conveying the service promise. It suggests that the real future is in leveraging the established brands harder to achieve the stretch that they seem to currently lack.

Full Integration Model
Typically in these organisations the top team have conceived and internalised their brand vision and values culture. They also recognise that harnessing the employee audience has an immediate impact on the brand experience (it is estimated that in service industry 80 per cent of the brand is delivered through people). They set about improving the customer experience through their people. It also delivers a better more focused working environment for the employee to grow and flourish. To achieve this end, employee audiences must be brought on a journey which puts the brand as a central force in their world.

There are a number of elements that will deliver effective brand communication. The consumer will see a coherent visual system but will also experience brand through the service offering. In addition, the internal dynamic will be dramatically affected.

Hamish Pringle and William Gordon in ‘Brand Manners’ used a HSBC case study to illustrate the effect positive employee contribution can make to a financial services organisation. They examined the annual complaints records received by all the major banks. The HSBC number was significantly lower. In the 1999 complaints report there were a total of 3 complaints to the bank. Significantly less when compared to 150 for Halifax and 120 for NatWest. HSBC attributed this to an alignment of brand vision with a ‘hard’ tangible customer experience.

Developing integration of the brand means it can touch everyone in the organisation. The key to success is to be sure that whatever brand ideology is embraced emanates from the heart so that the brand can become the embodiment of the corporate vision. In these organisations the marriage of the hard and soft factors is a reality.

Traditionally financial services companies have only given lip service to really building sustainable brands. In recent times most of the serious players have invested in delivering a developed visual identity system. This is positive and impacts positively on the external audience.

We have also seen the emergence of a new category of brand offerings which emanate from a mother brand but proposition the market in an entirely new manner and the issues this approach raises for the master brands themselves.

The real opportunity and a key contributor in the future in differentiating oneself will be to develop a core brand ideology (vision and values) that come from the heart of the organisation and to internalise this vision with employees before moving outside to communicate to the mass market.

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