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What’s the value in financial services brands?
Wednesday, 17 March 2010
Financial services have suffered from a big fall in trust by consumers – and outright hostility towards bankers and some of the individuals working in the sector. Further’s recent Breakfast Briefing, chaired by Managing partner Adrian Day, explored how management in the sector can rebuild strong, enduring and trusted brands.
The speakers included Sally Shire, Global Brand Development Director at Aviva, David Norman, Managing Director, TCF Fund Managers and Steve Tibble Communications Director at Cinven.
Several key points emerged from the discussion:
Trust has been lost because:
Some parts of the financial services industry have behaved in a way that encourages distrust – from endowment mis-selling through giving guarantees that turn out to be anything but, to advertising punitive APRs. And despite some parts of the sector behaving more poorly than others, it seems most areas have been affected by the mis-trust, some unfairly.
Power rests with the seller, and consumers lack information. Many contracts are long and complex, and the consumer needs (but rarely uses) a lawyer to go over the small print. It’s all too easy for the seller to bamboozle the buyer – and it happens too often.
Financial services firms find it hard to keep a corporate promise, mainly because there is a potential disconnect between maximising shareholder value and customers’ best interests. Management is incentivised to deliver short term profit growth, rather than deliver long term customer value. And of course leadership teams change, so the same people aren’t in place to deliver any of the promises made.
So how do brands build trust?
Firms have to articulate a set of customer-aligned values that deliver – and in a way that’s profitable. They need to keep long-term promises, stop making big mistakes and cut the complexity.
Brands have to connect with the consumer. In the short-term you might be able to ‘blag’ a rebrand but it isn’t sustainable. Customers will see through a superficial reimaging in the short-term.
Brand need to be aligned to the corporate strategy, which can prove challenging when the leadership team and the business strategy changes during a rebranding programme.
What will be the successful financial services brands of the future?
The financial services brands of the future will be those that have already built trust – Which? Apple, Tesco perhaps? And mutuals will have a new lease of life – they are brands that are more able to align the customer needs with stakeholder benefits. Finally there is a great opportunity for existing brands, such as Aviva, to find new ways to connect with the consumer.
There will be new entrants that emerge, seeking to build trust with the customer in new ways. A good example is TCF, a new fund management company that is about to launch a range of 'totally transparent' funds with no initial, exit or performance charges, no commission and a feature where the fees reduce as the funds grow.
Another example is Metro Bank, which claims to be the UK’s first high street bank for 100 years. Metro Bank is building itself around the customer with long opening hours and transparent products (even claiming to be dog friendly!). And finally the Labour Party is planning a People’s Bank for the lower-paid.
