The Future Of Bank Branding

Financial services branding is a hot topic these days, from releases of (methodologically suspect) brand rankings, to a number of blog posts. Stealing Share published a study recently, and had this to say about bank brands:

The major banks remain undifferentiated and deliver little to no brand meaning. What banks need is a new brand promise, one that is a reflection of who the target audience is.”

The Open Source CU blog echoed this sentiment:

The vast majority of financial institutions will continue their pursuit of “better sameness” in lieu of real differentiation. They will continue to apply imaginary rules about what FIs should and shouldn’t look like.”

My take: Both Stealing Share and OSCU are right on regarding the lack of differentiation in bank brands.

I was disappointed, though that Stealing Share (a “strategic brand development’ firm) didn’t offer any ideas for what a new “brand promise” in banking that “reflects the target audience” would look like. And I while I agree with the author of the OSCU blog post that the majority of FIs will “continue their pursuit of better sameness,” I believe that is only in the short-term.

For the longer-term horizon (3+ years out), I envision a very different scenario for the future of bank branding efforts. A scenario that reflects not “who the target audience is”, but “who the target audiences are.”

In the future, banks will go down one of the following three branding paths:

1) Specialist. The brand message for firms going down this path will be “We do [fill-in-the-blank] — and only [fill-in-the-blank].” Fill-in-the-bank might be a specific product or service, or perhaps “serve” a specific segment of the market.

I can see the TV commercial for this brand: A prospect walks into a bank branch (a competitor), and meets with a rep to talk about a specific product. The prospect then says “great, I’d also to talk to someone about product #2.” The rep says “sure, one moment, I’ll go get someone” and gets up and walks out. The same rep returns a moment later wearing a different jacket, perhaps a wig, perhaps a fake nose and glasses, and says “hi, how can I help you?” Voice over: At XYZ Bank, we do one thing, and one thing only. And we do it better than anyone else.

Rationale: The financial supermarket concept has never worked, and never will. Consumers have never wanted a one-stop shop, and many never will. Self-directed consumers who know what they want, are willing to put in the effort to manage their finances — and multiple financial providers — will place a value on firms that specialize in narrow product areas, services, or their particular segment.

2) Trusted, objective advisor. The brand message for banks on this path is: “We do right’s for you — not us.” Think Miracle On 34th Street with Santa sending customers to other stores because it’s right for them. Sound crazy? Sure it does. But this is true differentiation — and will plenty of traffic in the door and on the site. It’s working for Progressive Insurance.

Rationale: There’s a segment of consumers — they tend to be younger, less affluent, less highly educated — that need advice and guidance on how to manage their financial lives and how to make smart decisions. Trusted advice is easy to get when you have $10 million in the bank (which is funny to say, because the people who have $10 million usually don’t keep it with a bank). Trusted, objective advice — regarding both sides of the balance sheet (assets and liabilities) — is an unment need among many consumers.

3) Operational excellence. The brand tagline for firms on this track is “We don’t screw up — ever. And if we do, we’ll fix it so fast you won’t even know it happened.” (I’m sure the copywriters will come up with more appropriate language)

In the ads for a firm on this path, an error will occur when somebody enters erroneous information on a computer screen. This will set off an “alarm” within the bank’s information system (because they’re able to flag the error as such in a nanosecond), and bots will go screaming through the ethernet to grab the error out of the dataflow, fix it immediately, and ensure that the right information goes through to the customer at the other end.

Rationale: Relatively affluent, highly educated consumers value this more than anything else. When my bank screws up a $50 charge, it can only make me wonder: “If you can’t keep track of $50, how can you expect me to invest $500k with you?”

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What about today’s predominant branding themes — convenience and superior service? They’re subordinated under the three tracks I’ve laid out. In other words, convenience and superior service are givens, or the cost of entry to compete in the first place.

I may be completely off-base with these branding approaches, so feel free to dispute them and suggest others.

Side note to the branding gurus out there: Don’t just critique and bash the banks for their current branding efforts — offer some constructive alternatives. If you’ve got any, that is. I’m not sure you do — if you did, there might not be so much sameness across today’s bank branding efforts.

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