It’s a question many financial institutions wrestle with. The answer is, “It depends,” and it hinges largely on how you define your terminology.

If you equate your “brand” with your organization’s “reputation,” then to “rebrand” would mean you intended to reshape people’s opinions about you in new ways. They think X about you now, and you want them to think Y about you tomorrow.

Unfortunately, “rebranding” is a loaded term, open to a wide range of interpretations. Some may use “rebranding” as a synonym for a “new ad campaign,” equating it to a new slogan, mantra or catchphrase. For others, it could connote something much deeper and intensive, something that impacts the core of every department and division on a foundational level.

Whatever definition you choose, “rebranding” implies the organization had a brand strategy to start with, when in fact most banks and credit unions do not. While many financial institutions have themes — even strategies — for their advertising campaigns, few have sat down and deliberately crafted a long term plan for the brand.

What do we want people to think about us today? Next year? How do we want to be perceived 5-10 years down the road? What is our encompassing message/promise? How do we differentiate the delivery of financial services in meaningful ways? What is the common thread that unifies everything we do — marketing, advertising, sales, service, products, etc.?

Reality Check: When many financial institutions say they need to “rebrand,” what they really need to do is develop an initial, comprehensive brand strategy.

The term “rebranding” suggests a refinement or other similar adjustment to an existing strategy, but an organization can’t refine what it hasn’t yet defined.

If you never articulate a formal, written brand strategy, your organization’s advertising will always be controlled according to the whims of a handful of individuals — namely the marketing director and/or ad agency exec. If you hire a new marketing director, you’re likely to wind up with a new theme for your organization. Same thing if you hire a new ad agency. Without a defined brand strategy, someone can always whip up some new rationale, a new reason to pursue a new direction.

Ad agencies love to use a tool they call the “creative brief.” This is a document that typically lays out the parameters of a client’s marcom project (e.g., objectives, audience, message/offer and media to be used). In a very real sense, a brand strategy could be viewed as an organization’s über creative brief, the overarching “Creative Brief” for all creative briefs.

With a brand strategy in place, you strip away all the subjectivity and replace it with deliberate intent. You have clarity of purpose. You know who you are, what you stand for, where you are going, what you should be saying and to whom.

Rebranding vs. Changing the Brand’s Identity

When a financial marketing executive brings up “rebranding,” they are often referring to their organization’s look and feel. To them “rebranding” translates to a new logo or tagline. Or perhaps new ads, branch merchandising, signage and brochures. Or all the above.

They aren’t talking about changing the underlying “brand” — the strategy. They are talking about altering the cosmetics of the brand, known as the “brand identity.” These are the tangible aspects of the brand that someone can point to and say, “Yep, that’s definitely [Brand X].”

Here’s the tricky part about “rebranding,” where terminology can lead to miscommunication and misunderstandings. When the VP of marketing at a bank starts talking about “rebranding,” others may think he or she is suggesting the organization’s foundation needs an overhaul, when in fact they are proposing the brand’s identity — its outward expression — get a makeover. It’s the difference between tweaking your superficial execution and revisiting the substance of your strategy.

There are two basic types of rebranding projects: (1) those that impact staff — what they do, sell and say, and (2) those that have no impact on staff.

With the first approach to rebranding, you look at retooling all aspects of your organization. You’re hoping to align everything around a new, cohesive position.

With the second approach to rebranding, the organization is usually only changing what it says, not what it does, who it is or what it stands for.

So the answer to the question, “Should we rebrand?” is “It depends.” It depends on whether you have already established your organization’s brand strategy. It depends on whether your brand strategy is outdated, inadequate or no longer relevant. Or maybe your brand strategy is solid and the identity is the only thing that needs to change. Either way, the term “rebranding” is so slippery and ambiguous, it’s best to avoid it unless you are doing a deep dive into your strategy.

Rebranding Checklist:

Do we have a formal, written brand strategy? (If not, you need one.)

Is our brand strategy relevant and enduring? (If yes, be careful about how you use the term “rebranding,” as it might imply you are abandoning your position/promise.)

Are we changing who we are or what we stand for at a basic level? (If yes, you are truly rebranding.)

Are we delivering a message consistent with those we’ve marketed in the past? (If yes, you aren’t really “rebranding” so much as evolving, refreshing, updating or extending your brand.)

Do we change the underlying promise and messages in our ad campaigns regularly? (If yes, you probably would benefit from a branding project.)

How will staff be impacted by changes planned for our brand and/or its execution/delivery? (If staff are affected, you are most likely rebranding. If staff aren’t affected, it’s most likely a brand identity makeover.)

This article © 2012 by The Financial Brand and may not be reproduced.

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This isn’t a list of “The Best Bank Brands.” There are at least a half dozen different research organizations with models ranking financial brands. Most of these rank banks according to their estimated brand valuation using proprietary (and arbitrary) formulas. This is not one of those lists.

These are 10 of the greatest bank brands you can learn from. They embody marketing ingenuity and illustrate multiple branding principles. Not everything they try works as hoped, but even their failures offer lessons better learned through the experience of others rather than your own.

If all the articles about USAA are right — and there are many — these guys can do nothing wrong. Satisfaction study after satisfaction study consistently put USAA light years ahead of every other bank out there, even credit unions.

USAA has managed to become one of the biggest banks in the U.S., with around $50 billion in deposits and more than 6.3 million accounts. They accomplished this with only one physical branch location for many years (USAA now has a relationship with UPS Stores). One of the keys to their success is their focus on a narrow and specific audience segment, namely those in military service and their families.

They have been on the forefront of alternate, online and mobile channels since the very beginning. They are one of the few retail financial institutions allowing people to rate and review products online.

Responding to news of BofA’s $5 debit card fee, USAA posted a press release on their website about their “fee-losophy.” The article got over 780 comments. Most banks don’t have 7-8 comments on their entire blog or website.

They have around 28,000 followers on Twitter, putting them in the top four or five in the English-speaking world. They have 232,440 ‘Likes’ on Facebook. Pound for pound, USAA trumps all other financial institutions in social channels. For the size of its assets and audience, they have a tremendous ratio of fans.

NAB is one of the four largest financial institutions in Australia (17th in the world), and a common focus of articles here at The Financial Brand. It operates 1,808 branches in 10 countries serving 8.3 million consumer- and business banking customers. They also own the BNZ banking brand in New Zealand, another perennial favorite of The Financial Brand.

What NAB has really excelled at lately is guerilla marketing. They just rollout one guerilla stunt after another after another, all cleverly designed to yield maximum PR and viral value, but in ways relevant to a financial message.

They have one of the coolest HQ offices in the world, and are always trying new and interesting things in their branches (most recently custom fragrances).

Another NAB division, UBank, could almost warrant its own place among the 10 Best Bank Brands to Watch. UBank is NAB’s internet-only arm, serving over 100,000 customers with more than $10 billion in deposits. UBank has around 13,000 ‘Likes’ on Facebook, while the parent NAB brand has a thousand fewer. Over at Twitter, NAB has 10,000 followers. UBank has about half as many. NAB is no slouch on social channels; they’ve learned some hard lessons along the way, but have become so sophisticated that they were able to punk everyone on Twitter with a Valentine’s Day PR coup.

How many bank CEOs have written best-selling books on branding? Two. Umpqua’s Ray Davis, who penned Leading for Growth, is one of them (the other is Arkadi Khulman’s The Orange Code from ING Direct, #7 in this list). Both books should be on your shelf.

Umpqua’s brand is one of the most-admired in banking. It is chic, contemporary and stylish, with a sense of urban design. In fact, Umpqua Bank’s brand identity is about as close as you’ll find to something like Apple in the financial industry. And yet the brand is noted — indeed celebrated — as being remarkably “local” — so small feat for a bank with over $12 billion in assets.

Umpqua Bank does some fascinating things with their branches. It’s almost like each new store is another experiment in financial retailing. In fact, Umpqua maintains an entirely separate facility — a mock branch — as an innovation lab. When Umpqua opens new branches, they send out their branded ice cream truck to hand out frozen treats… along with reminders about the new location.

The Financial Brand’s articles about Umpqua’s branches (here, here and here) have consistently ranked among the most popular with readers.

Like many banks in this top 10 list, First Direct also has an innovation lab, only theirs is online. First Direct, the online/internet banking division of HSBC, is widely regarded as one of the most innovative and progressive financial providers in the world. They use their online innovation lab to crowdsource ideas and feedback from customers on products they are- or should be developing.

They’ve been one of the financial industry’s early adopters of social media. First Direct has 14,000 ‘Likes’ on Facebook, and 4,000 followers on Twitter.

More and more banks will likely follow HSBC’s footsteps, introducing online sub-brands. As these slick internet banks attract a growing number of young hipsters, they may eventually take over the role as the dominant/parent brand. In other words, HSBC could be little more than an obscure fuddy-duddy brand 25 years from now, with First Direct being the popular brand everyone knows and loves. If you want to attract a Gen-Y audience, it might be easier to just spin-off a new brand than to try and refashion your old one. Just make sure you’ve got the tech chops and products to pull it off, otherwise you’re doomed. Pay attention to First Direct. Watch and learn.

Ally Bank is the second of three different internet banks in the list. Since Ally Bank burst onto the scene a mere three years ago, it has grown to be a formidable force in the banking world. Considering that Ally was spawned from a failing financial institution, the meteoric rise of its brand is a phenomenal accomplishment.

The Ally brand is built around straightforward simplicity — “No nonsense, just people sense,” the bank says. Ally tries to demonstrate its “simple” philosophy in every aspect of its brand — from ads to products and disclosures. If there’s anything consumers universally crave, it’s an easier banking experience.

Ally has an aggressive ad strategy built largely on humor. But they like to keep things moving, which keeps it interesting for spectators.

Being an online bank these days means you have to dabble in social media, and Ally is no exception. They have a blog, a Twitter account with 7,000 followers, and a Facebook page with 28,000 ‘Likes.’

Any time Richard Branson, one of the most successful entrepreneurs in the history of mankind, decides to enter your market, you had better pay attention. This guy is wicked smart. He’s known around the world as a huge risk-taker… one who almost always reaps big rewards.

True to the brash Branson brand, Virgin Money takes creative chances in its advertising that would make most bank marketers blush. They push the envelope — not just with what’s acceptable in banking… they push the edge period — with references to things like MILF and naked old ladies. Is the risqué too risky? Perhaps, for some people. Alas, that’s what Virgin is. Besides, the best brands don’t care if some people hate them.

But don’t just judge this brand by its cover. When people get as passionate about a brand as they do with Virgin, it’s wise to keep an eye on what they’re doing (even if it may make you wince). Virgin, regardless of how offensive they may seem to some people, has some brilliant strategies underpinning its brand. They are constantly pushing out-of-the box marketing strategies that any bank or credit union could learn from.

ING Direct would have ranked higher in the list had it not recently been acquired by Capital One. ING Direct was always a fun brand to watch, so it will be sad to see the friendly orange brand retire. However, it will be fascinating to see how Capital One handles the transition, which it must complete fairly soon. What will Capital One do with the name? What will happen to ING Direct cafés? Or the brand’s focus on savers? How much will change? How much will stay the same?

Good, bad or otherwise, however Capital One resolves the situation will surely serve lessons to any marketer faced with phasing out a brand.

ASB has unveiled a number of barrier-busting marketing innovations in the last few years, wrapped in a friendly, approachable brand identity. The New Zealand bank was one of the first in the world to introduce a virtual branch on Facebook, where they have a gorgeous page with nearly 50,000 ‘Likes.’ They have a more modest 5,000 followers on Twitter. They have a fancy branded YouTube channel loaded with how-tos and tutorials. In online channels, ASB is one of the most visual, friendliest banks you’ll ever see. They even created an elaborate, interactive overview of their brand experience.

Want to see some cool stuff? Keep your eyes on what OCBC in Singapore has come up with to reach a Gen-Y audience. They hit it out of the park. A quick Google image search should convince you that Frank By OCBC is worth investigating deeper. The youth-oriented brand looks nothing like what you’d expect from a bank — in any country. They have a number of products specifically designed for Gen-Y, both in terms of function and aesthetics. It’s fun and refreshing watching OCBC expand from such a strong foundation.

Based in Canada’s beautiful British Columbia, Vancity is the only credit union on the list. Vancity’s community-banking model embodies the very essence of “credit union,” more so than nearly all of its community-chartered peers in the U.S. They’ve maintained a clear, singular brand focus for nearly a decade, which they execute on multiple levels. Their brand is relevant, compelling and differentiated from all their competitors. Even though they’ve grown to nearly $15 billion in assets, Vancity has managed to maintain a reputation as being a hometown banking alternative — one that’s both capable and full of niceness. You should expect to see some more great things to come from this progressive disciple of branding in 2012 and beyond.

What Other Financial Brands Would You Recommend?

There are many banks and credit unions out there doing positive things. US Bank has been innovating in a number of areas — products, niches. Meanwhile, Wells Fargo quietly plugs along.

In other parts of the world, Barclays and Standard Chartered are two megabanks that always have something interesting going on. And The Financial Brand is consistently impressed with just about anything coming from Australia or New Zealand, whether that be BankWest, Commonwealth, ANZ, BNZ and Kiwibank. They’ve got it going on Down Under!

In the credit union category, some of the most intriguing developments seem to come from Canada — particularly British Columbia — where Coast Capital goes after common folks, and North Shore pursues emerging affluent consumers. Other Canadian notables include Sunova, First Ontario and Servus.

A couple U.S. credit unions that always seem to grab The Financial Brand’s attention include Innovations, Generations, Grow, OnPoint, Xceed Financial, Seattle Metro, Arizona State, and anyone smart enough to be running one of Currency Marketing’s Young & Free programs.

We should also pay our respects to some banking brands that are no longer around, but were once fun to keep an eye on back when they were around: National City, WaMu, Dexia (Belgium), USA Federal Credit Union and Addison Avenue Credit Union.

But we should also welcome two new players to the always competitive banking arena: Simple and Movenbank.

What do you think? What brands would you include among the best to watch in banking?

This article © 2012 by The Financial Brand and may not be reproduced.

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According to the FDIC’s most recent quarterly assessment of the banking industry, banks posted their tenth consecutive year-over-year gain in quarterly net income. Two out of every three banks reported improved net income numbers, and only 18.9% were unprofitable for the fourth quarter of 2011. Yet a constant source of anxiety for many bank and credit union professionals is the question of how and where they will generate profits in the months ahead. Every financial institution today is learning how to thrive in an environment where the consumer expects more for less, while stricter regulations chip away at revenue streams and compliance demands strain resources.

The financial industry overall has done a fairly good job at keeping pace with new regulations and technology. Things have, however, become more complex, more difficult to forecast future sources of profit. Unfortunately, many CEOs and senior managers attempt to improve the profit pitcure through conventional and increasingly ineffective tactics. They rely excessively on cross-selling, cut costs too deeply and manage margins reactively. What many bankers often overlook is the degree to which the rules of the game have changed. They have developed what can be called “profit tunnel-vision” — a condition that causes them to lose sight of a new profit engine in our post-recession economy: purpose and passion.

Admittedly, those two words barely register in the vocabularies of most financial executives. Yet (as Tony Hsieh, CEO of Zappos.com reminds business leaders) too many companies are focused only on the bottom line. When a company forgets about passion and purpose, it actually ends up hurting long-term profitability. In other words, profit is not your purpose, it is by-product — a result, not a goal.

Don’t take this the wrong way. Profit and profitability are fundamental components in any institution’s success. But short term attempts to recover profits will only damage a brand. The marketplace is riddled with examples of strategic missteps made when an organization’s motivating principle is profit above all else. Consider BofA’s debacle when it attempted to implement a $5 per month debit card usage fee. Consumers rejected the effort and abandoned the brand in noticeable numbers. As Fast Company blogger Shawn Parr wrote, “To be clear, making money is absolutely imperative, but it is just one of the outcomes of a successful company.” If you are driven solely by profits you will not look or feel any different than most of your competitors. This article will explain how attention to purpose and passion, as expressed both through your brand and your internal culture, will shape your bottom line.

Purpose

So what does it mean when I talk about purpose? Let’s first look at it from a first-hand, individual standpoint. What motivates you to get out of bed each day? What’s your purpose? To yourself? To your family? To your friends? To your employer? To your co-workers? When I ask that question in workshops or seminars people often think of “purpose” as some grand principle like the one that animates the lives of celebrities like Oprah Winfrey or Steve Jobs. Purpose does not need to be big and bold. It simply needs to be yours. So choose a purpose, something that will animate you to get up and going every day. This is the motivating driver around which you can organize your day, your department, your bank or credit union, or even your life.

Any number of medical studies point to the fact that people with a purpose live longer. Think about someone in your own family — perhaps an uncle or grandmother, a dad or grandfather — who worked their entire life. When retirement day arrived, did they seem deflated, uncertain what to do with their time? Perhaps they had lost their sense of purpose, and there was nothing in line to take its place? In many such cases, a person’s physical health will actually begin to deteriorate. An individual’s personal sense of purpose can keep them vital, engaged and alive. The same can be said for organizations.

Organizations with purpose also live longer. They survive shifts in the market, and their brand remains relevant to consumers. The challenge in financial services is that many banks and credit unions have little sense of purpose — their actions seldom factor changes in consumer needs and behaviors. Your brand will barely be noticed by the consumer if your purpose is all about profit. Your purpose should inspire, drive innovation and unify your internal culture.

Why do Apple, Google and IBM consistently rank among the strongest brands in the world? These brands weild such tremendous power because their organizations have purpose. Apple’s external message and internal structure is organized around “think different,” an invitation for people to create their world through self expression. Google focuses on the ideal of liberating people through the universal availability of information. IBM has embraced the purpose of helping create a “smarter planet.” These companies connect a clear sense of purpose with their audience, while setting them apart from competitors. Moreover, they tangibly express their brand purpose through their internal culture, something evidenced in the behavior of every employee.

The Harvard Business Review recently explored the concept of “Collective Ambition” within organizations. Simply put, it’s why an organization exists — its reason d’etre — what it hopes to accomplish, how internal team members collaborate, and how the organization’s brand promise aligns with core values. This alignment is real, and the results tangible. In fact, according to one study, fully engaged organizations with a clear internal culture outperform others by 33% in customer retention, and outpace competitors in sales growth by 51% annually.

Purpose-Drive Brands in Banking

There are examples of purpose-driven brands in banking. Take the global banking giant Standard Chartered Bank. During the height of the recession, the bank’s CEO Peter Sands sent senior management on a six month road trip specifically to have conversations with key stakeholder groups — customers, suppliers, regulators, and yes, even regulators — about what makes the bank unique. The common theme which emerged from this process was that the bank was viewed as an ethical partner that was going to be around for the long-term. An ambitious statement for a global bank during the height of a recession, don’t you think? That sentiment, however, inspired the bank’s brand promise: “Here for Good.” As they illustrate in both deed and word, “Here for good is the essence of who we are. It’s about sticking by our clients and customers through good times and bad, and always trying to do the right thing.”

Once your organization’s purpose becomes clear, let it animate everything you do, and don’t lose sight of it. Starbucks is a perfect example. Their purpose has always been to become a “third place,” somewhere between home and the workplace where people could create caffeinated connections with one another. This focused dedication led to their amazing success — with essentially no advertising! Their purpose drove decisions — big and small — as well as the behaviors of employees. But then they lost sight of their purpose.

In the years leading up to its problems, Starbucks had been on an aggressive growth phase, building as many as seven stores each day. This resulted in a dilution of focus. Starbucks was using growth to mask other deeper challenges at the company. When Howard Shultz returned to Starbucks as CEO in early 2008, he acknowledged the company had lost its innovative edge and had much to say about the coffee company’s rejuvenation.

CEO Howard Schultz was quoted saying, “We’re not going to allow growth to cover up mistakes at Starbucks ever again. We’re not going to have unbridled growth that turns into a strategy as opposed to a purpose.” He is spot on.

Howard Schultz understands that a company’s sense of purpose, its adaptability and its skill at executing strategy are what assure profit… and longevity.

So what is your purpose, your organization’s reason for being?

Ask this of your board, your senior management, your staff… even (especially!) yourself. The collective answers you uncover will help you differentiate. The process invariably leads to a realignment with customer needs, saving you from fate.

Passion

Passion can take many forms: zeal, enthusiasm, excitement, fervor, etc. Whatever you want to call it, passion is the key ingredient. It’s contagious. It’s what gets people united around a common cause, building momentum for your purpose.

I often ask bankers what they are passionate about. Of course they say something they think I want to hear, like, “I’m passionate about checking accounts.” Yeah, right… I mean what are you personally passionate about? Do you like to ski, run marathons, golf, cook, spend time with family? What?

Embrace your passion, even if you think it has nothing to do with your job, because it actually does. As you express your passion, you discover newfound vigor that transfers energy to other parts of your life — both personal and professional.

The power of passion can be demonstrated through the story behind Clif Bars, a healthy sports nutrition bar created by an avid backpacker named Gary Erickson. In 1992, he was living in a garage with his dog and a pair of skis as his only possessions. On his quest to create a sports bar without all the bad oils and fats, he experimented with various concoctions in his mother’s kitchen until he found the magic recipe. The rest, as they say, is history.

The opportunity to sell the company presented itself. He and his partner agreed that they would sell the company for approximately $120 million to a large food conglomerate. But the morning of the closing of the transaction, Gary realized he didn’t want to sell the company, and couldn’t go through with the deal. His partner still wanted to go through with it however, and expected $60 million. So Gary put himself $60 mil in debt.

He candidly approached his employees, sharing his vision of an independent company. But in order for that strategy to succeed, it would take everyone’s support, ideas, long hours and passion. With the commitment of employees — hikers, runners, health nuts and sports enthusiasts who were themselves passionate about Clif Bars — the company was able to prevail. Employees were drawn to work at Clif Bar because aligned with their own passions. Gary knew that a passionate employee is an engaged employee. In financial services, engagement can turn personal bankers into champions and tellers into superstars.

At a retreat with 150 bankers, I asked people what they were passionate about. What did they find? There were many similarities among their passions, which in turn helped connect the group together. In the same way, a clear organizational purpose can unite your internal culture. A shared sense of collective passion can engage customers in ways that reshape perceptions about your institution. Imagine the cultural shift in your team if you began to encourage and nurture their passions. Studies suggest as much as two-thirds of a company’s profits hinge on enthusiastic employees effectively engaging consumers.

Key Takeaways

Profit is not your purpose. Find your purpose and let it guide everything you do.

Your purpose is what keeps you (and your business) active, engaged and vital.

Your purpose is unique to you. That’s what makes it difficult to duplicate, and what will set you apart from your competitors.

Your purpose is at the center of your brand position.

Your bank or credit union in particular must address whether its purpose aligns with what consumers need and expect.

Passion animates your purpose and brings it to life.

Awaken your passions in some area of your life and then transfer that energy to the workplace.

About the Author: Joe Sullivan, CEO of Market Insights is a consultant, professional speaker and facilitator. He helps organizations find their own purpose and helps them build strategies to for how to take that purpose to the world. His firm, Market Insights provides market research, strategic planning, branding, marketing and leadership for financial institutions.

This article © 2012 by The Financial Brand and may not be reproduced.

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Do you have children between the ages of 2 and 22? How about grandkids 2 to 22? Okay then, have you ever been a kid between 2 and 22?

If you answered “yes” to any of the questions above, you’ve probably seen a million Disney movies in the past 20 years, and you’ve probably seen a few of them a million times — “Let’s watch it again, Daddy!”

One Disney movie I’ve seen a million times is Aladdin. You’ve probably seen it a few times, too. In one scene, when Princess Jasmine sneaks out of the palace to check out the city, she ends up being chased. Aladdin, seeing this damsel in distress, reaches out his hand and asks Princess Jasmine, “Do you trust me?” She takes his hand, and he leads her to safety.

A little later on, Aladdin poses as a Prince to woo the Princess. On the veranda of the palace, she spies his magic carpet. Sticking his hand out, he again asks, “Do you trust me?” She takes his hand, and off they go on a magic carpet ride.

Why did Jasmine trust Aladdin? In both cases, she had to make snap judgments without much data, prior experience, or facts to go on.

Do you trust your bank?

A similar scene is played out every day in the world of financial services. Financial institutions hold out their hands and ask consumers, “Do you trust us?”

The answer is increasingly “not so much.”

What are consumers really saying when they respond to that question? Like Jasmine in the movie, consumers are making snap judgments based on a number of factors, many of which aren’t being considered consciously.

There’s been a lot of good work done on the topic of trust. David Maister’s The Trusted Advisor is a great example. For a very high level summary, see JP Nicol’s blog post on Why Should Your Clients Trust You? Both explore theoretical formulas for trust, and the variables that should be considered.

But managers would be wise to avoid formulas attempting to quantify trust (although, I must admit, I too have use them… in the past).

One of the biggest problems with trust formulas is measurement. You can’t reliably arrive at a single score for how “intimate” or “credible” your firm is. You can ask consumers how intimate the firms they do business with are, or how credible they are, but consumers’ definitions of “credible” and “intimate” are going to vary widely.

What I’ve concluded from my research is that “trust” is too complex a construct to boil down to a simple formula. Trust is multi-dimensional, comprised and influenced by many attributes.

What is ‘trust?’

At Aite Group, we researched the factors contributing to consumers’ perceptions of trust specifically in financial institutions. What we found was that, to demonstrate or earn trust, it’s important for financial firms to:

1. Have friendly and helpful service reps
2. Listen to problems and concerns
3. Empower employees to fix issues
4. Clearly explain their products and services
5. Make rates and fees crystal clear
6. Say when it’s a bad idea/time to buy
7. Respond quickly to inquiries
8. Rarely/never make mistakes
9. Be easy to do business with

These are nine of the top attributes that were most closely correlated with consumers’ perceptions of trust in their primary bank (or credit union). The first three attributes are human-focused, the next three attributes are advice-related, and the last three attributes are operationally-oriented.

The trust-loyalty connection

Here’s why all this is so important.

You might intuitively believe that trust is something important to a customer relationship. But do you really have any proof? I don’t have proof either. But I have a theory, and it’s one driven by research.

While studying customer loyalty in a financial services context over a period of many years, I became convinced that asking survey questions didn’t capture the true essence of loyalty. The answers seemed pat and contrived. I was fortunate enough to work with some large financial services firms willing to identify and interview their most loyal customers (and disloyal ones too, for that matter).

What we heard were stories. When asked why they were loyal to their bank, more often than not customers used stories instead of rattling off lists of attributes. These stories had three common themes:

1. “They have the most helpful employees.”
2. “They help me make the right choice.”
3. “They’re really easy to do business with.”

Notice anything about these themes? They correspond — one for one — with the three dimensions of trust: human-focused, advice-related, and operationally-oriented.

Trust really does drive loyalty. Well, emotional loyalty at least. It’s certainly possible to create economic loyalty where you “buy” customers’ loyalty through rewards, incentives, discounts, etc. Not that there’s anything wrong with that, but emotional loyalty creates stronger bonds than economic loyalty.

Segmenting trust perceptions

There is one more consideration to take into account, however: Not everybody places the same relative importance on each of the trust attributes listed above.

Older consumers tend to place more importance on human-focused factors. Lower-than-average consumers consider advice-related attributes to be more important. And relatively affluent consumers consider operationally-oriented attributes to the biggest influencers of trust (see the HBR article To Build Trust, Competence is Key).

Rebuilding trust

The financial services industry is rightfully concerned with rebuilding consumer trust. But doing so won’t come from advertising, it won’t come from just having more friendly people, and (sorry, folks) social media is no panacea either.

The nine attributes of trust listed above provide a roadmap for rebuilding trust. Financial institutions should:

1. Assess (objectively) how well they do on those nine attributes.
2. Determine which customer segments they have a trust problem with, and which segments they do well with.
3. Make investments in business processes and technology to fix the weak spots.

The bad news is that rebuilding trust is going to take time, and hard work — it’s going to come from getting better at what you do. Sorry, there’s no silver bullet.

Ron Shevlin is a senior analyst at Aite Group, a Boston-based research and advisory firm serving the financial services industry. You can pick up a copy of Ron’s latest book, Snarketing 2.0, at Amazon.com. The book is a balance of keen, entertaining observations loaded with educational and practical advice that doesn’t pull any punches. Ron is a regular contributor here at The Financial Brand. You can read more from Ron on his blog, or follow Ron on Twitter.

This article © 2012 by The Financial Brand and may not be reproduced.

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The study, conducted by research firm StrategyOne on behalf of Edelman, involved 20-minute online interviews with 30,000 people in 25 countries. Edelman describes participants in the survey as members of the “informed public” — college graduates whose household income is in the top quartile for their age, and who follow newsworthy issues several times a week.

Consumer Confidence in Banks Nosedives in US, UK

Since 2008, consumers’ confidence in banks’ ability to “do the right thing” has plummeted — a stunning 46% in the US, and an equally-shocking 30% in the UK. Meanwhile, in other markets like India and China where consumers already have high levels of trust, faith in financial firms’ integrity has increased as much as 12% over the same three-year period.

Respondents ranked “has ethical business practices” (76%), “listens to customer needs and feedback” (74%), and “places customers ahead of profits” (73%) as the most important actions financial firms should take to rebuild trust.

31% of consumers think more regulations are needed to curb irresponsible business practices. 25% want more the government involved to ensure companies are behaving responsibly.

Edelman says the concepts of trust and reputation are inseparable. A financial institution’s reputation (i.e., its brand) is a consumer’s aggregate feelings about its past behaviors. Past performance creates future expectations, which in turn determines the degree of trust a consumer places in an organization.

The Financial Trust Barometer, now in its 12th year, seals Edelman’s position as one of the world’s foremost authorities on reputation tracking in the banking sector.

Trust in Banking by Country

Consumers in the U.S. are more trusting of financial services brands than many other developed countries, however, the industry is only trusted by a majority of consumers in nine of 25 countries studied.

Food For Thought: How many financial institutions have the word “Trust” in their names?

A report released earlier this year by consulting firm Oliver Wyman found that 63% of people trust no one but themselves to manage their retirement savings. Banks were trusted by less than 8% of those surveyed in the U.S. and U.K.

In order to regain trust, banks will have to offer simpler products that appear to offer value for money, according to the Oliver Wyman study. To do that, lenders and insurers will probably cut one-quarter of their costs over the next eight years by delivering products online instead of through branches.

Do What You Say, Say What You Mean

“The financial crisis and its persisting issues of banker bonuses and sovereign debt defaults have highlighted issues of moral bankruptcy in our current way of banking,” observes Omar Shaikh, executive board member of the Islamic Finance Council UK.

Richard Edelman, President/CEO at Edelman Worldwide, says there has too often been a divide between what financial institutions do and what they say. “It is not good enough any more to say smart words. You have to have smart deeds.”

Martin Shaw, chief executive at the Association of Financial Mutuals, says banks frequently respond to breakdowns in trust by throwing money at new branding projects. “But actions inevitably speak louder than words,” he says. “But all too often you hear that customer benefits are cut, whilst the [shareholder] dividend is increased.”

Branding guru Steve Davies says trust is born from a sense of congruity. “Put simply, ‘saying what you will do, and then doing what you say.’”

That doesn’t mean you have to open the kimono and be brutally honest, Davies says.

“Transparency is a term that’s sometimes overused,” he complains. “It doesn’t mean opening the doors and revealing every secret. The simple reality of doing business makes telling the truth an unrealistic proposition.”

This article © 2012 by The Financial Brand and may not be reproduced.

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The underlying psychology of “Make Good Money” is that consumers can make a difference without it costing anything; it’s easier and cheaper than making a donation.  It’s a slogan that assumes a certain morality inherent in money — that there is “good” money and “bad” money.

The “Make Good Money” campaign uses all custom photos of real members and Vancity employees. Imagery is black-and-white to make the message feel more authentic and real — two words Vancity says lay at the foundation of Vancity’s brand personality.

The campaign eschews tired shots of tourist Vancouver, favoring documentary-style images of scenes that are familiar only to locals.

Map of Goodness

Vancity will be expanding this online interactive map with examples of how it puts people’s money to work in good ways. This is a brilliant component of the campaign, and something other community-based financial institutions should consider.

Not Just Lip Service

At the center of Vancity’s brand is the concept of ‘balanced prosperity,” a strategy driven by a “triple bottom line” of financial returns, social returns and environmental returns.

“The new brand theme establishes a connection between consumers banking and the good that Vancity does,” Seres adds. “It speaks to the impact people can have on their community simply through the financial decisions they make.”

Socially responsible banking is not a new concept to Vancity. For the better part of a decade, Vancity has steadily built its brand around a passionate belief in community reinvestment — using people’s money to do good things.

One of the first socially responsible products Vancity rolled out was its EnviroVISA card, where 5% profits go to an environmental fund chosen by cardholders. In 2004, they rolled out Bright Ideas Home Financing for energy efficient home renovations — a first in Canada. They have term deposits and mutual funds that invest in socially responsible companies. The Clean Air Auto Loan provides preferential rates to buyers of fuel-efficient cars. And Vancity’s Shared Success program returns 30% of overall profits back to members and the community. Since 1994, Vancity says it has invested over $194 million of its profits into communities through grants and various other programs.

While Vancity is technically a credit union (Canada’s largest, with 417,000 members and 59 branches), it is this elevated sense of social consciousness that makes them feel like an idyllic local banking cooperative — a place where people pool their financial resources to collectively make the world a better place.

Key Takeaway: Brands are built by what you do, not what you say or promise. There are many financial institutions out there claiming to be strong supporters of their communities, but often they don’t do much more than donate to a few charities.

“It’s nice to have integrity behind your claims,” adds Seres.

Vancity does more than just design do-good banking products. Back in 2005, Vancity committed to being carbon-neutral within five years. It took them only three, making them the first North American-based financial institution to achieve that goal.

In June 2007, Vancity released 45 branded bikes into the community to launch its Bike Share program. That same year, Vancity published its first carbon neutral annual report.

Vancity goes further. They target segments of the community often overlooked by financial marketers. For instance, they created a micro-credit toolkit for non-profits serving new immigrants. They have programs specifically for Canada’s aboriginal peoples. And Vancity’s support for the LGBT community is well documented. They even created a special subsite — vancitypride.com — built specifically for a gay audience (now inactive).

A Work in Progress

Before they found their footing with socially conscious banking, they were using slogans like “It’s Right Here” and “Expect Better.” It wasn’t until 2006 that Vancity started weaving messages about its “mutually beneficial banking” philosophy into marketing. That year, as themes of “Shared Success” first started to percolate, they rolled also out ChangeEverything.ca, a social media community that fostered social activism in local communities.

The new “Make Good Money” replaces “We All Profit,” a tagline Vancity had used in recent years to summarize its position. Similar to “We All Profit,” the new mantra joins the concept of banking and social goodness.

“It brings together the ‘me’ and ‘we,’” says Vancity’s Seres. “It links one’s personal finances with the collective good it accomplishes.”

But what Vancity really likes about the latest iteration of its catchphrase is its direct connection with one’s personal cash status.

“It really hits much harder on ‘money,’” Seres explains.

Internally, Vancity had been describing itself as “a good neighbor and a damn good banker.” But this statement frustrated Vancity’s leaders, who saw it as an inelegant mashup of two separate concepts.

“There was actually quite a bit of internal push against this statement because it reinforced where we were, not where we wanted to be,” recalls Seres.

“We have been desperately trying to take the ‘and’ out of that sentence because it reinforces that there are ‘two different things we do.’ Our new strategy aims to merge these concepts by eliminating the ‘and.’ That is, members make good money by putting money to good.”

“It’s an important nuance, one internal stakeholders are quite conscious of, most notably our CEO,” Seres stresses.

The Development Process

Through research conducted during the brand development process, Vancity discovered people already knew that Vancity was doing great things for the community. What consumers needed to know was that socially responsible banking wouldn’t require them to make financial sacrifices — that people could, in effect, “make good money” for themselves while doing nice things for others.

“Vancity has always rightly been recognized and loved for the contribution it makes to the well-being of its communities,” said Vancity’s agency partner Wasserman + Partners. “But what hasn’t been well understood is that they are equally committed to member wealth.”

Formal development on the new identity and slogan began in late 2010. A few months later, the concept and new Vancity look was nailed down.

And for Vancity, it is a different look indeed. Instead of the bright rainbow palette and geometric shapes Vancity used previously (shown here), the new design is more stark and serious.

“No large shoot, no video village and catering trucks,” explains Wasserman + Partners. “Instead a small team went out documentary style to capture Vancity members and communities where they live and work.”

To make sure staff were onboard with the rebranding, Seres says Vancity “spent a lot of energy getting ‘the inside’ onside.” They produced an internal video for its 2,397 employees featuring Vancity CEO Tamara Vrooman and a group of frontline staffers talking about how they live out the brand promise.

Seres says internal reaction across staff and management has been enthusiastic. “Everyone wants to put ‘Good Money’ into everything.”

Lights, Camera… Action!

Earlier in the year, Vancity began airing a one-minute brand spot and two 30-second product-focused TV commercials. All the people featured in the TV commercials are real Vancity members and staff.

“They get to the heart of our new Good Money brand platform, which connects the dots between the business our members do at Vancity and the work Vancity does to support the communities where we operate,” says William Azaroff, Vancity’s digital and community engagement director and the voiceover narrating the spots.

VANCITY – BRAND SPOT
A reflective and soothing 60-second spot weaving Vancity’s good deeds with one’s personal finances.

VANCITY – JUMPSTART SAVINGS & ENVIROVISA
About Vancity’s Jumpstart savings account and enviroVisa product.

VANCITY – RRSP
About Vancity’s RRSPs (a Canadian retirement product, short for Registered Retirement Savings Plan).

This article © 2012 by The Financial Brand and may not be reproduced.

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BofA Fires Back

In October 2011, as the BofA debit fee debacle was reaching its crescendo, the strain on BofA’s leaders became torturous. Under pressure, CEO Brian Moynihan couldn’t help but fire back.

“We have a right to make a profit,” he snapped.

Later that month, speaking to staff at the bank’s Charlotte headquarters, Moynihan indignantly said he gets “a little incensed when you think about how much good all of you [BofA employees] do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well.”

Wagging his finger at critics, Moynihan added, “You ought to think a little about that before you start yelling at us.”

While BofA’s leaders were griping over the public’s reaction to $5 debit card fees, the bank was simultaneously rolling out a coordinated campaign focused on the bank’s charitable contributions, small business loans and mortgage modification efforts. BofA ran the campaign in TV, print and online ads from October through the end of last year.

One ad that ran in Charlotte, the bank’s backyard, carried the tagline, “We’re working to help keep the North Carolina economy moving forward.” The ad touted the bank’s economic significance in the state — $159 million in loans to small businesses in the first half of the year, more than 22,000 loan modifications since 2008, and $10.8 million in charitable commitments in 2011. The message was clear: “See we’re not greedy bankers. We’re nice people.”

“The campaign aimed to deliver the facts about Bank of America’s local impact,” said BofA spokesperson T.J. Crawford. “Sharing the significant work we do at the local level and critical role we play is more important than ever.”

Advertising Is Not What BofA Needs

“If the banking industry is to survive, it needs to change its culture.”
— Reputation Communications

“All those charitable, volunteering employees have nothing to do with what people are yelling about,” observed Bill Varble at the Mail Tribune. “Yes, BofA has employees who are really nice. But the [people] ‘yelling’ at the bank aren’t yelling at its employees, they’re yelling about the bank’s behavior.”

What Varble is saying is that BofA’s ad strategy doesn’t align with its actions. It’s like the bank is saying “we love you soooo much” while punching consumers right in the gut.

Writer David Allen Isben says consumers have become far too wise to be swayed by white-wash campaigns. He believes it is a big mistake for BofA to be “touting their supposed good deeds” when they should be “addressing the behaviors that consumers see as demonstrating corporate greed.”

Key Question: What can an ad agency do if BofA isn’t willing to change its core culture?

BofA seems to think ads can solve its image problem — as if consumers will somehow feel better about the bank with the right message. Not a chance. Ads aren’t the problem. The problem is BofA’s underlying brand — what the bank is doing, not what it’s saying.

This point does not seem entirely lost on BofA’s CEO. “We can’t be the biggest bank in America and have people thinking we’re taking advantage of them,” Moynihan said.

True. But what’s the best way to get people to stop thinking you’re taking advantage of them? It’s not with ads or slight-of-hand. It’s by actually not taking advantage of people.

An expert on crisis communications said that BofA’s image woes will not improve until there is “demonstrable progress on fixing the business issues that are at the root. Until those issues are resolved, advertising and other marketing techniques won’t accomplish much.”

To get a good sense for how screwy things can get at BofA — how badly the company’s ethics can be warped — just look at the litany of litigation they’ve faced in the last decade. The Financial Brand assembled a list of some super expensive settlements BofA has inked in recent years, and what you’ll notice is a habitual pattern of abuses, deceptions and dirty tricks. Talk about profits over people… it’s shameful.

No one, it seems, is immune. BofA has — with alarming consistency — exhibited a willingness to exploit their own customers, their own shareholders, third-party investors, various government bodies and worst of all, their own employees.

At the end of the day, a cynical CFO might wonder which is the cheaper strategy: Giving away millions to charities so you can have a defensive backstop every time the public accuses you of misdeeds… misdeeds that will then also end up costing you a fortune in nasty court cases? Or simply doing everything right and everything possible to avoid such situations in the first place?

Wanted Urgently: One ‘Silver Bullet’ or ‘North Star’

BofA is currently shopping its ad account around, looking for a new agency. The bank invests about $2 billion into marketing annually, with an estimated $300 million slated specifically for advertising production (the current review does not include BofA’s media buy, which is handled separately). As the 17th largest marketer in the U.S., the bank’s agency search has caught the full attention of advertising’s most heavy hitters.

According to Ad Age, a briefing document circulated to BofA’s potential new agencies said the bank was seeking a strategic position that can serve as a “North Star” for all business and marketing decisions, and convey that the bank is in the midst of a transformation.

BofA wants “a campaign that creates buzz,” Ad Age continues. “The bank also desires a deeper sense of purpose, one that can withstand any potential dings to brand reputation.”

Actually, Ad Age admits it isn’t entirely clear about what the bank might be after. “BofA doesn’t seem sure of exactly what it wants. But it’s eager to find a new marketing direction fast.”

Ya think?

Reality Check: What BofA really needs is a brand strategy, not an ad agency.

“It will probably take years and multiple behavioral changes for BoA to prove themselves.”
– Edward Boches, Mullen

All indications at this point suggest BofA intends to stick with its feel-good ad strategy. If that is indeed the case and BofA asks their next agency to slap a halo over the brand by showcasing the bank’s goodness, both parties are going to have a tough road ahead.

“Unless its new agency comes up with a silver-bullet strategy — one that feels humble, honest and wholly unique for the financial-services industry — the exercise could prove fruitless,” noted Ad Age.

Edward Boches, Chief Innovation Officer with Mullen, is skeptical, and expects more of the same. “No doubt we’ll see executions that pat the bank on its back for funding inner city growth, helping send kids to college, providing entrepreneurs with money to launch new businesses and practicing corporate philanthropy with efforts that include free admission to hundreds of museums,” he wrote on his blog.

But it’s going to take more than that.

None of these challenges will stop the world’s largest ad agencies from flagellating themselves as they pursue BofA’s account with naked abandon. After all, it’s much easier to “shut up and do what you’re told” than to point out the cultural flaws that will undoubtedly undermine whatever ad campaign a client winds up running. The winning agency will be thrilled to pocket a billion dollars in billings while throwing some more awards on the shelf before getting the inevitable boot for (now get this…) “failing to reshape consumers’ perception of the brand.” No mea culpa from BofA at all. “Goodbye. Next agency, please.”

But here’s something for BofA’s next agency to think about. Based on past performance, the bank is almost certainly doing something right now — something ugly and potentially illegal — for which they will end up forking over millions if not billions in fines and restitution. How’s that going to look while their ad campaign plays out?

Will BofA ever change its behavior at a fundamental level? Maybe. Or maybe not. Maybe they don’t care. Maybe coughing up huge settlements is just an acceptable cost of doing business at BofA, and their ad agency’s assignment is to counterbalance consumer negativity with as much shiny spin as possible?

What BofA Should Do

“The suits in Charlotte need more than a new ad agency and a $300 million ad campaign. They need a new mindset for how to solve their marketing and image problems.”
— Edward Boches, Mullen

If BofA doesn’t get its act together, there’s nothing that ads are going to do for them.

At least BofA’s CMO Anne Finucane is on the right track when she admits it will take more than a new slogan to turn the bank’s image around. “In order to repair reputation,” she said in the NY Times, “you have to repair the issues that underlie that.”

Reality Check: Ad agencies don’t repair internal and cultural issues.

BofA needs to find out who it really is, determine who it wants to be, define how it wants to be perceived, and build the culture to get there. Then, after that work is complete, BofA can go hire an agency to run ads reflecting that brand — not the other way around.

What else should BofA do?

• Focus on contrition and humility instead of defensiveness. When someone feels you’ve wronged them (as most Americans do in BofA’s case), you don’t try reminding them of all the other wonderful things you did for them in the past. Consumers can’t stomach self-congratulatory hubris when they were expecting an apology.
• Focus on internal culture and ethics. What an organization does is much more important than what it says.
• Focus on branding over advertising. Ads don’t fix image problems, they really only help build awareness. If your brand sucks, ads only remind more people more often about how much the brand sucks, no matter what kind of happy face you try to put on it.
• Focus on PR over advertising. BofA has a long, complicated story to tell and zero credibility. They need the media’s help.
• Focus on real substance over superficial style. An attractive appearance will only conceal character flaws for so long.
• Bury Countrywide in the deepest hole possible. BofA needs to get rid of everything associated with Countrywide and put it as far behind them as fast as they can.
• Retain the Merrill Lynch brand. It still has significant value.

Will BofA be the “Bank of Opportunity” and embrace this chance to reinvent itself with “Higher Standards?” Or will they just run another stylish and clever campaign that glosses over the bigger issues?

If you were in charge of BofA’s brand what would you do?

This article © 2012 by The Financial Brand and may not be reproduced.

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How does the bank respond? With typically curt corporate expressions, like “BofA denies all allegations of wrongdoing” and they reached a settlement “to eliminate the uncertainties, expense and distraction of further litigation.”

Another shallow reply: “We are working aggressively to improve our process through formal training, enhanced checklists and improved communication.”

Yeah right. People will believe that when they see it.

“If we continue to see these lawsuits come up, at some point people are going to rise up and say maybe we need to break this thing up and have a different structure,” warns Paul Miller, an analyst at FBR Capital Markets.

Here’s a recap of some of the more notable lawsuits BofA has been forced to settle in recent years. The numbers are simply staggering.

$11.8 billion – Robosigning Foreclosures
A $25 billion agreement between the five largest mortgage servicers and the nation’s attorneys general addressed foreclosure abuses, specifically the notorious practice called robo-signing. BofA got hit with the biggest share of the settlement: $11.8 billion.

$9.7 billion – Auction Rate Securities Scandal
According to SEC complaints, BofA misrepresented to investors that Auction Rate Securities were safe, highly-liquid investments comparable to money markets. The SEC alleged that in late 2007 and early 2008, BofA knew that the ARS market was collapsing, so the bank purchased additional ARS inventory to prevent failed auctions.

$8.5 billion – Mortgage Securities Fraud
Investors who lost money on mortgage-backed securities they purchased before the housing collapse were awarded the largest payout of its kind. At the time, the settlement was greater than all of the bank’s total profits since 2008.

$624 million – Mortgage Securities Fraud
This settlement stemmed from a shareholder class action alleging that investors were misled investors about Countrywide’s financial condition and lending practices.

$461 million – Bond Fraud
BofA settled with WorldCom investors who bought bonds from BofA. The investors said BofA should have been aware of the massive criminal fraud taking place at WorldCom. BofA reached this settlement as closing arguments were being made, so they clearly did not like their chances.

$410 million – Unfair Overdraft Scheme
This huge settlement in 2011 was punishment for manipulating customers’ debit card transactions from highest to lowest dollar amount — rather than in the order they occurred — to trigger the greatest number of overdrafts possible.

$375 million – Mutual Fund Rigging
BofA paid $125 million in fines and $250 million in restitution for secretly allowing certain big investors to make rapid-fire trades in their mutual funds, and in some cases after the legal close of the trading day. This practice, called market-timing, enabled crony firms and individuals to profit at the expense of long-term investors — for the most part, small investors (e.g., John and Jane Mainstreet).

$335 million – Latino Discrimination Lawsuit
According to the DOJ’s complaint, BofA’s Countrywide subsidiary charged over 200,000 African-American and Hispanic borrowers higher fees and interest rates

$315 million – Misleading Investors
BofA allegedly misled investors about mortgage-backed investments sold by its Merrill Lynch unit.

$150 million – Misleading Investors
The bank again misled investors, this time about financial losses at Merrill Lynch prior to the acquisition of the brokerage firm. BofA had also approved huge bonuses for Merrill execs but failed to disclose that fact to shareholders who were evaluating the takeover.

$139 million – Bond Rigging
BofA admitted its employees rigged bids when marketing financial contracts linked to municipal bonds.

$108 million – Foreclosure Related Fees
Inflated fees for property inspections, appraisals and even as much as $300 for lawn mowing.

$100 million – Accounting Cover-up
BofA agreed to pay $100 million to resolve a lawsuit accusing the bank of helping Italian dairy Parmalat hide its debts which ultimately resulted in the creamery’s 2003 collapse.

$36 Million – Foreclosure Fees
BAC Home Loans Servicing illegally assessed millions of dollars in fees against struggling homeowners, in violation of an earlier settlement with the FTC.

$14 million – Revealing Customer Information
BofA settled claims that the bank disclosed customer information to marketers and third parties without permission.

$9 million – Unpaid Overtime
BofA settled a class action lawsuit brought by its California loan officers who sued to recover overtime back pay.

$7.5 million – Money Laundering
Penalties and costs in a settlement following an investigation that showed that the bank had ignored safeguards against money laundering in connection with the illegal transfer of $3 billion through the account of a Uruguayan company with ties to crime.

$5 million – Unfair Collections Practices
BofA’s credit card servicing unit used an arbitration service that was biased in favor of the bank and against consumers.

$4.1 million – Unpaid Overtime
BofA settled a class-action lawsuit filed by employees who said they were encouraged to work extra hours without filing for overtime. BofA had tried to skirt overtime rules with employees who held titles such as “client manager” but didn’t have the true managerial responsibilities that would have exempted them from OT pay. Each employee in the settlement received an average of over $9,000.

This article © 2012 by The Financial Brand and may not be reproduced.

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If you can’t view the YouTube video, you can read the entire transcript here.

Quite simply, your brand is your reputation. It represents people’s gut feelings about your organization. Everything you do and say influences how people think about you, both positively and negatively.

Consumers are exposed to an average of 3,500 brands every day, including yours. We live in a brand saturated world. That’s why it’s so important for your brand to stand out.

This article © 2012 by The Financial Brand and may not be reproduced.

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When Australian banking giant Westpac took over the Bank of Melbourne, they did what many banks do: They kept the old brand in place for a few years before replacing it with their own brand. But Westpac is doing something almost no one ever does: A mere seven years after pulling the plug on Bank of Melbourne, Westpac reversed course and reintroduced the regional brand.

Christopher Stewart founded Bank of Melbourne in 1989. Stewart sold out to Westpac back in 1997 in a deal worth $1.4 billion. Westpac kept the brand alive for seven years, but in 2004, decided to slowly phase out the Bank of Melbourne out over a two-year period, replacing it instead with another brand in the Westpac portfolio.

Back then, Stewart said, “It’s a pity the name has to go, but I think it was inevitable.”

Today, Mr. Stewart is probably quietly smiling to himself. The “one, big national brand” strategy didn’t work so well for Westpac, or so it would seem based on their turnaround.

Reality Check: Sometimes the brand that gets acquired in a merger is stronger than the one initiating the takeover. That’s how Bank of America came to be.

Admitting Mistakes Were Made

Bank of Melbourne CEO Scott Tanner said market research had revealed “deep affection” for the brand Westpac dumped in 2004.

Work on relaunching the Bank of Melbourne began in 2009. That means it didn’t take Westpac more than five years to realize its mistake.

Michael Hughes, Director of Brand Strategy with Truly Deeply describes Westpac’s move to kill the popular Melbourne regional subbrand as “one of the worst brand architecture decisions in the industry.”

“This highlights an issue that often occurs in M&As where short-term cost savings drive decisions rather than considering the real impact of forcing brands to merge,” Hughes wrote on his company blog.

“You have to wonder whether they did a proper analysis of their brand architecture and had a real understanding of the value of each of their brands in the portfolio,” Hughes continued.

“But after so long, bringing the Bank of Melbourne brand back is a big gamble,” Hughes cautioned.

Nevertheless, Westpac will be spending $90 million reintroducing the Bank of Melbourne.

Westpac says it’s “serious about providing a truly local alternative” to Australia’s four biggest banks (NAB, Commonwealth, ANZ and somewhat ironically, Westpac).

Westpac hopes the resurrected Bank of Melbourne brand will gain 9% of the lending market in Victoria. Ironically, this is just short of the old brand’s share before it was retired.

City of Melbourne vs. Bank of Melbourne

Designworks, the agency behind the relaunched Bank of Melbourne brand, says Westpac’s strategy called for “a bank focused on what regional customers value, a bank built and designed by Melbournians for Melbournians… with products and services tailored to the people of Melbourne and Victoria.”

Victoria, where Bank of Melbourne is based, is the second most populous state in Australia. 75% of Victorians live in Melbourne, the state capital and largest city.

Bank of Melbourne aims to exploit “a super local preference.”

Perhaps that helps explain why the bank’s identity draws on the back of the City of Melbourne’s own brand. There look-and-feel for the Bank of Melbourne clearly borrows shades and flavors from its namesake city’s image.

“It seems to take a conservative cue from the excellent Melbourne City identity created by Landor a year or so ago,” noted Demi Hawkins, Creative Director at Carnival Studio.

It’s a bit unusual — perhaps even controversial — for one agency to lean so heavily on another agency’s design.

Designworks obliquely acknowledges the city of Melbourne as a source of inspiration. “The shapes reflect the architecture of Melbourne — the Arts Centre and Federation Square,” the agency says on its website. “They also symbolize the elements that together make Melbourne great.”

For as ultra-local as Bank of Melbourne aspires to be, much of the copy in the new brand’s marketing materials has the familiar, bankerspeak phrases. For instance, the TV launch commercial makes implausible promises about the bank’s empathetic abilities:

“Your beginning will be our beginning. Your thrills will be our thrills. Your priorities will be our priorities. Your win will be our win. So make your bank your bank.”

Go ahead, it’s okay to roll your eyes. As hard as they are trying to say the bank is “your local friend who knows and cares about you,”  the hollow pandering just undermines the effort. It’s the kind of saccharine white noise people tune out when watching TV.

Key Questions: Couldn’t just about any bank say what Bank of Melbourne is saying in its marketing materials? What makes the messages unique to them? How do the messages reflect or support a hyper-local strategy?

Hughes at Truly Deeply is also worried the bank’s brand is too generic. “The launch campaign promises ‘mutual prosperity,’” he says. “It doesn’t really differentiate other than show plenty of clichéd shots of Melbourne.”

BANK OF MELBOURNE – YOUR BEGINNING IS OUR BEGINNING
A 30-second TV commercial used to relaunch the Bank of Melbourne brand.

This article © 2012 by The Financial Brand and may not be reproduced.

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First Cherokee State Bank, like many retail financial institutions, is worried about its future. The banking industry in Georgia, where First Cherokee is based, was hit hard by fallout from the financial meltdown, with 57 bank closures between 2008 and 2011 — more than any other state in the U.S.

As a modest community bank with only three branches, First Cherokee wondered how they could survive in a such highly commoditized industry, one where giants reign supreme. Is the traditional branch model outmoded? What will financial services look like 5-10 years down the road? How can the organization radically reposition its brand and change consumer perceptions, but without all the turmoil involved with renaming?

First Cherokee’s answer: Acru, the bank’s new sub-brand created around its wealth-management division, described as “a revolutionary new retail concept where wealth strategists give away financial wisdom at no charge.”

It’s not the café inside Acru’s prototype location that makes First Cherokee’s strategy so noteworthy. Nor the absence of tellers. There’s no cash, no transactions, and not customer service desks. Nay. What is interesting about First Cherokee’s approach is that the bank plans to grow into the Acru brand over time. They plan to patiently, methodically increase Acru’s visibility and expand its focus beyond its wealth-management beginnings. Meanwhile, the First Cherokee State brand will edge quietly towards retirement.

THE STORY OF ACRU BY FIRST CHEROKEE STATE BANK

The interior of the initial Acru location looks and feels like a classy cigar and wine bar. Indeed the space is two bars. Situated in the front half of the store is the Wisdom Bar, home to Acru’s wealth management advisors. The second half of the location is a full-service retail coffee bar. The location boasts free WiFi, an open community meeting space and a conference room available to anyone who makes a reservation.

“The design evolved from a low-barrier interaction environment — similar to the Apple Genius Bar — to a more intimate setting akin to the comforts of home,” said Matt Hames, CEO/Acru.

“Our community space design is intended to be as comfortable as your own living room — great coffee included,” it says on the Acru website. “We want you to come in and stay for a while.”

The team at Cherokee State/Acru created their own Copper Coin Coffee brand for the Acru café experience. Ten percent of coffee operation’s gross revenues are put towards philanthropic community projects.

The coffee bar is open from 6:30 am to 11 pm, seven days a week. Wealth management advisors are available Monday through Friday, 9 am to 5 pm.

“Everything Acru does starts with a conversation,” bank spokesman Rob Kremer explained. “We believe coffee houses facilitate conversation.”

“The goal at Acru is to remove the transactional element from financial services and create a more interactive, relational environment,” added Hames.

Financial Quarterbacks & Switch Teams

Acru is staffed by five “Wealth Strategists” who use a CRM solution from Salesforce to manage customer relationships.

“Our job is to ask questions, shut up and listen,” Hames said. “Listening is the most important part.”

Each Acru representative serves as a single point of contact for clients, offering them a plan with a 360-degree holistic view. A Wealth Strategist will manage a client’s entire portfolio of financial needs, regardless of their socioeconomic status.

Hames likens the role to that of a “financial quarterback.”

“Acru helps people and businesses with anything related to their money, including banking, investments, insurance, tax and estate planning, regardless of their net worth, beginning with the area of greatest need as agreed upon by the client and Wealth Strategist,” Kremer explained.

“Acru’s front line employees — the Wealth Strategists — do not sell anything,” Kremer added.

“Our wealth strategists are free from having to sell products and push transactions,” Hames said. “Rather, their sole focus is to provide clarity and wisdom across multiple disciplines utilizing specialists that will best serve the client’s needs.”

Acru also has “Subject Matter Experts” who can provide detailed expertise in specific areas. Kremer said Subject Matter Experts are “brought to the table to deliver products when a need has been identified by the Wealth Strategist and/or consumer.”

Adding to the Acru difference are the services of the Switch Team, a team dedicated to handling the logistical and administrative nightmare associated with switching banks. They handle all the details, including moving online banking and bill pay relationships. This is offered as a free service.

“Our Switch Team takes the pain out of moving checking accounts,” Hames promised.

First Cherokee knew it wanted a radical new retail concept to reinvent itself, but couldn’t see how remodeling its existing three locations would have much impact. Everyone in the community knew First Cherokee was a bank, and management didn’t feel a new coat of paint would change that.

“We believe it’s impossible to create something truly new and different by redecorating something old,” Kremer said. “The bank’s brand is one that is known for offering a commodity like all other banks with locations designed for transactions.”

“To expect the Acru brand promise to be effectively delivered through the banks physical locations and current brand position in the marketplace did not seem reasonable to us,” Hames said.

They also didn’t think people weren’t likely to come into a coffee-style retail environment simply to have a conversation about checking accounts. Investments, insurance, trusts…? Yes, perhaps. But basic banking? Probably not. So they looked outward for inspiration.

In creating a new experience, First Cherokee studied the latest ideas within the industry, as well as service leaders in venues such as boutique coffee shops, the Apple Store and the Ritz-Carlton.

The Acru prototype incorporates shades and flavors of things seen previously in the financial industry, including Umpqua’s community branch locations, ING DIRECT’s cafes and UNCB’s failed attempt at creating a coffeehouse brand. In fact, First Cherokee executives including CEO Hames spent a couple days visiting with Umpqua Bank’s team in Portland, Oregon.

To assist with the design and development of Acru, First Cherokee partnered with the branding experts at Leader Enterprises, and ai3, an architectural firm based in Atlanta.

“We looked at it like a hospitality project,” a spokesperson with ai3 said. “There is nothing in there that says ‘bank.’”

First Cherokee feels its Acru retail space is the model for the future of financial services. “Acru provides product-agnostic wisdom at no charge from a trusted, single advisor and team of experts to clarify your financial life today and help you prepare for tomorrow,” Hames explained.

“Acru is how we believe the next generation of community based financial services should look and feel to the local community,” he continued. “A trusted advisor that, in addition to First Cherokee State’s banking products and services, also offers single source access to Investment, insurance, tax and estate planning.

“This is what community banking needs to be,” Hames added. “We have to do this to not only survive, but thrive.”

This article © 2012 by The Financial Brand and may not be reproduced.

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Back in July 2010, Metro Bank opened its doors in the UK to much fanfare. It was the first new bank to grace London’s fabled high street financial market in over 150 years. As a scrappy new contender, Metro was looking to shake things up. Media outlets in the UK heaped coverage on the startup promising to ignite a “banking revolution.”

Metro Bank’s strategy? To “surprise and delight every customer” and “eliminate stupid bank rules.” They promise to stand out from their stuffy competitors by providing “unparalleled service, convenience and value for money.”

Among the many ways in which Metro differentiates itself, the bank hands out free lollipops to kids. There are dog treats, and bowls of water placed out for the four-legged friends Metro welcomes into its branches (what Metro prefers to call “stores”). The bank boasts instant account opening, with debit and credit cards issued on the spot. They have a 24/7 telephone call center where a human voice will always answer, never a machine. The bank only closes four days a year, and is open 76 hours every week: 8 to 8 Monday through Friday, 8 to 6 Saturday, and 11 to 5 Sunday. They also have a free coin counting machine open to the general public, not just customers.

Vernon Hill, Metro Bank’s founder, says, “Great customer service comes through a business model focused on building fans not customers.”

Hill is a man who knows what he’s talking about. He achieved fame with his Metro banking model back in the U.S., where he is originally from. Hill opened his first branch in 1973 at the age of 26, selling the bank 34 years later for $8.5 billion, pocketing a cool $400 million for himself.

METRO BANK’S MAGIC MONEY MACHINE
A free coin counter. Dogs are welcome inside Metro’s branches.

Hill lists Steve Jobs as one of his heroes, and says he’s trying to fashion a brand in Apple’s image — one that people feel passionate about. This sentiment is clearly reflected in Metro Bank’s slogan: “Love Your Bank At Last.”

The bank currently has eight locations, with plans to have 200 branches by 2020. Branches will clearly play a significant role in Metro’s strategy for years to come. “The internet is important, but the branch is the cornerstone of the bank,” says Hill.

Hill recruited his wife Shirley and her interior design firm InterArch to design Metro Bank’s British brand and branches.

“My secret weapon is my wife,” Hill told the UK Marketing Society. “Her architecture and design teams have been responsible for the success of Metro Bank in the US and in the UK.”

“Design is a competitive weapon,” Hill adds.

Very true. But in Metro’s case, many critics wonder if their image and identity is as sharp as it should be.

METRO MAN MASCOT

“The blue and red looks a bit dated,” says Chris Skinner, author of The Financial Services Blog. “I would have expected something far more Apple-ish for Metro Bank. Instead, from a branding viewpoint, we have WalMart rather than Apple.”

“The amateurish design doesn’t do much to convey trust in their brand,” wrote Money Watch UK on its website.

“The bright blue and red bank branch feels as if it has been plucked from a cartoon,” notes Simon Watkins, another financial writer in the UK. “The dog biscuits and lollipops on the counter seem a touch gimmicky.”

“It’s far too cluttered, and stylistically a bit all over the place,” adds Geoff Whitehouse, a communications expert in the financial industry. “If they wanted to be seen as different, then a move away from traditional colors and a typeface straight from the 80s might have been a good idea.”

James Wrighton, a bank marketing consultant, feels the brand identity is “a touch clumsy,” and says “their website certainly doesn’t feel like that of an aspiring national bank.”

Another observer summed it up this way: “A customer-centric proposition but a cheesy brochure.”

“Metro had an opportunity to change the approach to banking, but has missed it with this communications approach.”

Tom Weaver, a customer experience designer, was not impressed when he toured one of Metro’s branches. “The very first impression I had when walking into the store was that it felt more like a casino than a bank. And not the grand Las Vegas type of casino either, but the small-town, beachfront mega-arcade.”

“This leads me to wonder whether the retail space was designed around the desires of the founder and his interior designer wife as opposed to those of the customers,” he continues.

“Will a bank — aimed at keeping your money safe — that feels like a casino — aimed at taking all your money — give consumers the feeling of safety and security they are looking for in austere times?” he asks skeptically.

“The interior design of a physical environment should always embody your brand, culture and the type of experience you want to create,” advises Weaver.

Key Question: So how does the use of type, color, copy/message, tone, style and imagery complement, support and reflect the bank’s brand strategy?

This article © 2012 by The Financial Brand and may not be reproduced.

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What makes Bankinter special? The folks at Saffron says it boils down to the bank’s “exceptional thinking.”

“This became the basis for a brand idea that’s aspirational as well as pragmatic: ‘a bank that thinks, for people who think,’” Saffron explains. “Bankinter attracts thinking customers; thoughtful, skeptical and capable of making their own decisions.”

As a “thinking bank,” Bankinter lays claim to a number of innovations. They were the first Internet Bank in Spain, the first mobile phone bank and the first bank to use text messaging.

What all that has to do with the resulting tangy orange brand identity is anyone’s guess. But the new look is certainly smart, fresh and contemporary.

“Bankinter’s personality emerges in the way it communicates,” says Saffron of the new image. “Sophisticated, intelligent, informed — even opinionated and outspoken. It is authoritative, thoughtful and direct. Everything about the visual style including the specially designed typeface emphasizes this.”

You could throw in youthful, warm and vibrant. Whatever words you might use to describe the brand identity, it safe to say it isn’t stale, cold and impersonal.

Bankinter clearly isn’t the first brand in history to wrap itself in orange. There is the European telecom giant Orange, and, of course, ING in the financial industry. What makes Bankinter so noteworthy is the extent to which they’ve bathed themselves in a single color. The brand is drenched in orange everywhere. While many organizations cringe at the idea of limiting themselves to only one hue (“It’s so boring!”), Bankinter deserves recognition for its bold and courageous use of color as a tool to differentiate its image.

BRANCH INTERIOR

EXTERIOR BRANDING & FASCIA DESIGN
Even the windows are tinted orange. The text translates:
“If you think all banks are equal, we know.”

BRAND BOOK
A handy guidelines manual designed to be more practical and easier to digest.

DEBIT CARD
The text on the card translates to “I like to think differently.”

BRAND VIDEO

This article © 2012 by The Financial Brand and may not be reproduced.

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Here’s the first question you need to tackle:

1. What makes our financial institution better than others?

You could change the question around a bit and ask, “How are we different than everyone else?” Or, “What makes us unique?”

Seems easy enough, right? Here comes the hard part. You can’t use the words “friendly,” “people,” “personal” or “service” as part of your answer. Why? Well, for starters, nearly every bank and credit union in the world thinks its service or people is what differentiates them. It probably doesn’t. Second, banking is a service business, so saying “service is what differentiates us” is like Chiquita saying its bananas are what makes their brand special. You have to dig deeper. “Friendly” doesn’t get you anywhere because if you’re anything but friendly you’ll go out of business. And words like “personal” are just feel-good corporate clichés that will continually prevent you from finding the true heart of your brand.

The second fundamental question of branding — a fill-in-the-blank — seems as equally simple and straightforward as the first:

2. We are the only ones who _________ .

At first, the two questions might seem similar. But the first question is more subjective than the second. In the first question, you’re exploring subjective territory — why do you think you are better? — whereas the second question attacks the issue of differentiation from a more concrete and objective perspective. Answers to the first question may be debatable. Answers to question #2 are not.

If you aren’t the only source of something — anything – then you are replaceable. Dispensable. Interchangeable. Consumers can easily swap you for another brand — any brand.

If you’re really interested in learning the brutal truth, go out and ask consumers these same questions. Do some market research and see what they think of you, your competitors, plus one or two big banks.

As these two questions illustrate, the process of branding presents difficult challenges. Your organization could spend month’s meeting just over these two questions. And you still might wind up with nothing. Then what? As Tyler Durden might ask, what will you do when you find out you are not “a beautiful and unique snowflake?”

That’s when it’s time to roll up your sleeves and get ready for some hard work. So you don’t do anything that’s mcuh better or different than your competitors today? What things might you be able to do and deliver tomorrow? How might your products and services need to change? Your branches? Your core data system? Your staff? Your internal culture? Even the heart of your business model?

You may be wondering why differentiation is so important in the first place. Good question. Because if consumers can’t recognize any relevant points of distinction between you and your competition, they’ll fall back on the one objective measure they can always use to evaluate any company: price. If you and your team struggle to identify the ways in which you are different from other financial institutions, how much luck do you think consumers are going to have.

Until you deliver a differentiated brand, don’t be surprised or disappointed when consumers continue telling you the only things that matter are “rates,” “fees” and “branch convenience.” Financial institutions haven’t really given them any other basis of comparison. Why should they expect anything else?

This article © 2012 by The Financial Brand and may not be reproduced.

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Ready to get started?

Step 1 – Make your list

Make a list of everything you can say about your organization. Be sure to include everything you actually have said in your marketing and advertising materials. Comb through your website, brochures, ads and press releases. Look for statements you make about your brand, what it offers and what it represents. For example, a start to your list might look something like this:

• friendly, personal service
• FDIC insured
• top 100 local employer
• free checking
• free online bill pay
• mobile banking
• iPad app
• innovative
• wer’re on Facebook
• etc., etc., etc.

If you get others involved (employees and managers), you can get a lot of different ideas for your list. The more raw material you have to work with, the more likely you’ll find gold.

Step 2 – Evaluate each statement

For each item on your list, ask how different it is from what your competitors offer. Take each statement and rate it on a scale ranging from “identical to the competition” to “no one else in the world does it.” Then determine how important each item on your list is to your target audience. At the bottom of the scale is “no one cares at all” on up to a “vital issue of utmost importance” at the top.

Step 3 – Map it out

For each statement in your list, figure out in which quadrant it belongs on the grid below.

This grid has four quadrants, each representing one of four different types of messages you can use in your marketing and advertising — the statements you can/do make about yourself. The more important a message is to your target audience, the higher up the vertical axis it goes (relevancy). Similarly, you plot the message further out on the horizontal axis as fewer and fewer competitors can also lay claim to it (differentiation).

Neutrals (lower-left quadrant)
Things you can say about your organization that are neither important to your target audience, nor different from what anyone else has to offer. With Neutrals, every competitor could make the same claim about something that doesn’t matter to consumers anyway.

You’re on Facebook? So what? Isn’t everybody these days? Who cares? It’s not something that will drive consumer decisions and doesn’t differentiate you very much. It’s a Neutral.

Antes (upper-left quadrant)
Things that are very important to consumers but do nothing to set you apart from the competition.

An Ante is the minimum price of entry — any expectation that must be met. These things are so essential to your target audience that almost everyone provider offers them. Antes are the chips you must throw into the pot just to play in the retail banking space, and there’s a lot of them. Consumers expect financial institutions to be trustworthy. To have integrity. To be accurate. They expect these things 100% of the time. Fall short, and you’ve got a big branding challenge. FDIC and NCUA insurance are other good examples of Antes.

Points of Distinction (lower-right quadrant)
Any aspect of your organization that differentiates you from competitors but doesn’t drive consumer decisions. These are aspects of your organization that may be unique to you, but have little relevance to your target audience.

You may be one of the top 100 employers in the area, but that’s not really important to most consumers. They aren’t going to chose you because of it. You may be innovative, unlike many other financial institutions. But consumers don’t care how creative you can be; they only care if your innovations make their lives easier.

Drivers (upper-right quadrant)
Things that are of high importance to your audience that you can say about your brand that the competition can’t. These are very important to your target audience — their hot buttons — that only you (and maybe a handful of others) can deliver. This is the stuff that really drives people’s decisions and fuel strong financial brands. Some things that may fall under the category of drivers include:

• A credit union that pays annual member dividends
• A relationship pricing/rewards structure
• Offering a courier for document pickup and deliveries

The trick is identifying the Drivers behind your financial institution’s brand. Don’t feel bad if you can’t come up with a long list of Drivers. Few organizations have that many…if any. It can take a lot of work just to identify two or three, and those may be aspirational at that.

Conclusion & Key Takeaways

All too often, financial institutions build their brands around the other stuff – the Antes, the Neutrals and Distinctions. You hear them talking about things consumers don’t really care about, and things most financial institutions offer.

The most powerful messages you can use to build your brand are both highly relevant to your target audience and very distinct from your competitors. These are your brand Drivers. Identify them and focus your brand around those. If you can’t find anything you deliver today, then you’ve got some work to do if you want to have anything to talk about tomorrow.

Editor’s Note: An older version of this article originally appeared on the CUES Nexus blog in August 2008.


This article © 2012 by The Financial Brand and may not be reproduced.

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