Something underscored by the widespread adoption of digital banking during the pandemic is that while big techs like Apple and Amazon have been steadily encroaching into financial services, financial institutions have been encroaching increasingly into technology.
As a result, the factors that encourage brand loyalty among companies on both sides of this competition have actually been converging. In addition, this trend has resulted in a surprising twist on who is increasing their regard for and interest in the financial services industry.
MBLM, pronounced “emblem,” has been studying “brand intimacy” for ten years in an annual study. The firm defines the term as the total of the emotional ingredients that form the bonds people make with the brands they use and like.
“Ultimately, what we’re measuring is a brand’s ability to create bonds with their consumers,” explains Rina Plapler, Partner. “Very few brands actually think about the role that emotion plays in the way people make buying decisions. Rational messaging has a strong role in how brands communicate, but it’s not the only way to communicate.”
The study is based on a survey of thousands of consumers in the U.S., Mexico and the United Arab Emirates. The firm supplemented the research with social listening.
How Financial Brands Stack Up Among Themselves and Overall
The 2020 study’s research, encompassing 15 broad industries, was conducted just prior to COVID-19’s arrival but much of the firm’s analysis took place during the pandemic.
“No financial brand finished in the top ten by company — in fact, no financial company shows up until thirty-seventh place.”
As an industry, financial services ranked eleventh out of the 15 for total brand intimacy ratings. The top five categories in the overall study were media and entertainment, automotive, tech and telecom, retail and consumer goods. The top five brands were Amazon, Disney, Apple, Ford and Jeep. Amazon is the only brand that is in the top five of all three age groups used in the study (18-34, 35-54 and 55-64).
No financial brand finished in the top ten by company — in fact, no financial company shows up until thirty-seventh place (PayPal), way behind technology and other types of companies.
The ranking in financial services:
- American Express
- Capital One
- JPMorgan Chase
- Bank of America
- Wells Fargo
- U.S. Bank
A key part of how MBLM computes brand intimacy is using what it calls “archetypes” — qualities consumers find important when connecting with brands. Typically the key one for financial services has been “fulfillment” — which refers to a high degree of expected service. “It’s about getting your financial concerns addressed in a satisfactory way,” explains Plapler.
However, in 2019 and again in 2020, “enhancement” has turned out to be the strongest factor for building brand intimacy for financial brands. “Enhancement is about making you smarter, better, and more connected,” explains Plapler. Out of all 15 industries studied, the enhancement factor was highest for technology and telecomm, apps and social platforms, and financial services.
Enhancement is the dominant factor in how tech brands like Apple and Microsoft appeal to consumers, according to the study. It’s also the leading factor in how Amazon appeals to consumers. The report states that technology brands tend to create stronger bonds than most other industries, in part due to the phenomenon of “fusing” — when someone begins to identify with the product — to the point that devotees of Apple and Microsoft tend to think of themselves as “Mac people” and “Microsoft geeks.”
Plapler believes the increased role for enhancement in financial services is a direct result of the increasing adoption of technology and partnering with fintech firms. She sees this as the financial services industry trending beyond merely fulfilling service expectations but improving overall financial awareness and health through better online banking and mobile banking and payment apps. She suggests that this factor will only prove stronger as the industry reviews and acts on what happened through the COVID-19 period.
“We’re all relying on our computers and our phones to deal with our banking needs,” she says. She thinks it’s likely this will continue to be a significant factor in financial services ratings because “more and more the idea of using technology to be smarter, more capable and more connected will likely be dominant.”
In fact, the report makes a point that any brand that is part of what MBLM calls “the smartphone ecosystem” tends to do better than comparable brands that don’t have a presence. In the past, the report states, the actual devices became the focus of consumers’ affections. However, “this year we noticed that devices and content/info have become more closely ranked. … This may point to tht growing importance and impact of content to consumers.”
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Tech Helps Financial Brands Build Connections to Millennials
Something that surprised Plapler was the growing interest in financial institutions on the part of Millennials. Typically older consumers have had more interest in the financial sector, she says, but Millennials’ emotional involvement has been growing.
“The more that financial brands can present Millennials with best-in-class tech solutions that address their desire for financial education and help, the better brands will do.”
Increasing availability of mobile banking and payment apps most likely account for a big part of this, she says. She notes that PayPal, the top financial brand in the study, was ranked as the favorite intimate financial services brand by both Millennials and older consumers.
“Younger audiences are moving towards managing their money through their mobile phones,” says Plapler. In many ways it is the apps they are bonding with, and secondarily with the institutions behind them.
Beyond the technology itself, she says, is Millennials’ desire for financial advice and solutions. The more that financial brands can present Millennials with best-in-class tech solutions that address their desire for financial education and help, the better brands will do.
“All these brands need to rise to the challenge of making people smarter, more capable and more connected,” says Plapler.
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Learning from Other Industries
All this said, financial services as a whole came in on the bottom half of the overall industry rankings, a familiar place for it for some time. What can be learned from the rankings of other types of companies?
The following are drawn from the main report and accompanying industry and company reports on MBLM’s website:
• The Apple Card marks the tech company’s most direct incursion into banking.
“Apple has provided a user experience that no traditional financial institution has come close to matching in nearly a year of the Apple/Goldman card’s availability.”
The ease and speed of the application and delivery process for the card, offered in conjunction with Goldman Sachs, are by now well-known. Apple has provided a user experience that no traditional financial institution has come close to matching in nearly a year of the Apple/Goldman card’s availability. Apple received a high enhancement rating in 2020, and while the card is only part of what it offers, its range of services on the card illustrates this factor. Its marketing stresses the card’s simplicity and flexibility.
• Google’s brand permeates everyone’s everyday existence.
Google has been cited in past analyses from the ongoing study as a brand that has a “consistent presence in consumers’ daily lives,” especially due to its core search engine. Financial institutions haven’t come up with a way to have a consistent and frequent role in consumers’ lives beyond commoditized transactions, though targeted content creation and dissemination would be a strong start.
• Amazon commands brand loyalty that goes beyond its original roots.
A paper related to MBLM’s 2019 study notes that “even more surprising for a brand built on convenience and offering value through lower prices, consumers of Amazon and Whole Foods on average are 20% more likely to be willing to pay more for a product. That willingness is a powerful economic measure of the bonds the brand has formed with its user.”
Enhancement is also Amazon’s highest-ranking attribute. This illustrates the possibility of high-quality service enabling a financial brand to avoid being solely the low-priced choice. By contrast, the study found that Amazon outdid Walmart in multiple intimacy factors, especially on enhancement. While Walmart was #2 among retailers and #9 for the whole study, its archetype numbers were higher only in the intimacy factors of “ritual” and “nostalgia.” While all ecommerce brands benefited during the pandemic, and Walmart still has a reputation for offering saving, Amazon still appears to have a leg up.
• We’re seeing a kinder, gentler Microsoft, apparently.
MBLM notes that Microsoft has specifically been trying to turn itself into more of a “people-company,” which increases the enhancement factor. During the pandemic, for example, it shifted its consumer communications to more of a “we care and we’re here to help” tone. In fact, MBLM points out that Microsoft’s efforts in this regard eclipsed some of its fellow tech companies.
In addition, “Microsoft seems to be reaching higher and going deeper related to COVID-19 challenges, like preserving privacy, focusing on education, and providing supportive messaging.”
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CX Questions Financial Marketers Must Start Asking
Plapler says that marketing staff for individual brands that want to improve their standing with consumers must begin asking tough questions, especially as the economy continues its fitful emergence from COVID-19. They have to put themselves into consumers’ shoes to see how the customer experience plays out. Among them:
- Why should a consumer pick your institution? What do you offer that appeals?
- Why would they stay with your institution?
- If you have good answers to the first two questions, what additional products and services from your offerings make a match with them?
“Marketers have to think of how they can express the fact that there should be a relationship, a two-way street,” says Plapler. “They’re your customers, you’re their bank. There needs to be a shift in mindset from one-size-fits-all communication to more precise ways to connect.”
Greater personalization gets at part of this challenge, but Plapler says marketers have to look beyond their own turf to other aspects of the institution that have an impact on consumers, even if the consumer isn’t directly aware of that effect.
For example, staff that develop policies and that enforce compliance have a role in the consumer relationship. So do those who deliver the experience, and they include not only customer-facing staff, but those who influence other interactions, such as the dev ops programmers who design the way digital channels such as chatbots interact with consumers.
Old-school but it works. Mystery shopping your own institution might not be a bad idea either, from looking at the utility of monthly statements and communications attached to them to trying out your own brand’s online banking and apps.
“Do they do what people need them to do?” says Plapler. “Or is your institution a laggard?”
An related MBLM paper includes more questions to ask specifically in regard to building stronger connections to Millennials:
- Does your brand offer something unique that will attract these consumers with purpose and differentiation?
- How well do you motivate Millennials through your brand?
- What kind of bond has your brand built with this generation and how strong is it?
- How can you better align your brand and its cultural values to those of Millennials?
- Do you see your brand as a community?