Banks need to build a brand around the concepts of security and respect, and don't need to emulate the Apples of this world when engaging customers.
Banks need to get better at branding. We say it every year when The Banker’s Top 500 Banking Brands ranking appears. The latest version of the ranking, which we have been doing with Brand Finance since 2006, is the cover story of the February issue.
There seems to be a couple of competing views about bank branding – both of them wrong. One is that many banks trashed their brand value in the crisis and it will never recover. The other is that if only banks did their branding in the same way that Apple sells iPads they would not have any problems.
On the first argument we have had critics ask how a bank such as Royal Bank of Scotland, which ended up being rescued by the UK government, can still have a brand value that places it 56th in our ranking.
This shows a lack of appreciation for the lasting worth of a brand because even a company which collapsed completely would still retain some brand value. Indeed the brand of a bankrupt company is one of the assets that could be sold off to repay creditors.
Many banks, however, fail to appreciate the true worth of their brand and to integrate it properly into their business strategy. But at the same time they will be wasting their time if they attempt to build their brand by replicating the strategy of a technology firm such as Apple.
Banks are not selling technology. They are selling security and the means to a lifestyle – not the lifestyle itself. Of course younger customers want their banking services delivered by mobile phone with the latest apps, but they also want to put their savings in a safe place.
The qualities customers want from banks are prudence, reliability, an effective complaints system and a relationship. Banks need a strategy that delivers these services and branding should build on these values rather than try to emulate the designer aspects and creativity of a tech firm.
Some banks did tarnish their reputation for prudence by coming unstuck with their risk management, but just as damaging has been the churning of products and the failure to build long-term relationships. Putting this right must be part of the strategy moving forward.
Even so, the majority of consumers are never going to love their bank in the way that they love their new smartphone. The aim is to get their respect rather than their adulation. Bank branding should reflect this and the CEO is fine dressed in a suit leaving the jeans and beards to the techies (another idea from some brand experts is that bank managers should be more cool). I don’t think customers want their bank to be cool, they just want it to deliver.
Brian Caplen is the editor of The Banker.
