Branding Magazine hosts the Branding Roundtable, a monthly feature in which industry leaders discuss key branding issues and opportunities. The ninth topic was financial services branding. Moderator Chuck Kent sat down with several branding executives, one of whom was Mich Bergesen, global director of financial sector branding for Landor.
Chuck Kent: Does financial services branding differ from any other sort of branding, in terms of process, organizational challenges, etcetera, and is special expertise necessary?
Mich Bergesen: Financial services branding should strive to create long-term customer relationships by seeking new ways to engage with consumers. However, because a transactional mindset pervades much of the sector, this can sometimes be a challenge. Financial executives expect to see tangible business results early in the process, which can sometimes create tension with long-term brand building. One solution is borrowed from Silicon Valley; at Landor we use rapid prototyping of branding concepts to help build consensus and illustrate the future impact of different directions.
CK: Financial services brands took a beating in brand image and consumer trust following the Great Recession. Have they recovered, and is that history still an issue?
MB: The financial crisis has had a deep and lasting impact on consumer trust. Major banks still carry the stigmas of arrogance and self-interest. While this has burdened large global banks, it has created fresh opportunities for local and regional players. They can use personal attention to authentically connect with consumers. For example, since the economy began recovering, regional bank PNC Financial Services has enjoyed much stronger growth rates in revenue and earnings than the sector average. This is partly thanks to a new branch model that relies more on technology and significantly expands the roles of tellers to serve clients effectively.
CK: What do you see as the main current challenges for financial brands?
MB: New regulations on trading, wealth management, and high-capital lending have led banks to become more like utility providers as they focus on core functions such as transaction services, credit, and investment products. This reduction in offerings has made it harder for banks to stand out from the crowd, especially as desktop and mobile banking become the norm rather than the exception.
CK: What are the big opportunities in financial branding?
MB: Financial brands can build differentiation through smart customer segmentation. Since regulations make it difficult for a single company to provide every product, brands can instead hone in on a specific segment, truly listen to its needs, and tailor their products and services accordingly.
Here, customer journey mapping can be very useful, as brands can disrupt the category norm by providing a stellar experience at every touchpoint, whether online, on the phone, or in the branch. Innovative service design can win loyalty from consumers frustrated with lackluster banking experiences.
CK: Which categories of financial services do you see “making the most” of branding, both strategically and in implementation and communication?
MB: Payment and personal investing services are leading the industry with product innovations. Apple Pay is at the top of the list, having created a powerful coalition of merchants, card-issuing banks, and payment networks such as Visa and MasterCard. These brand partnerships are promising levels of convenience, security, and flexibility that were previously unheard of. Personal investment services have also introduced new products such as portfolio tools like Betterment and Wealthfront, and trading platforms from Charles Schwab and TD Ameritrade.
CK: In general consumer branding there is a lot of buzz about the empowered customer “owning” the brand. Does that equally apply in financial services, particularly as the social intersection may be more highly regulated than in other categories?
MB: Despite the highly standardized and regulated nature of the financial services industry, firms are striving for greater engagement through personalization and emotional connection, both in interactions with their people and through technology and social media. A few companies can make genuine claims of consumer empowerment, companies that are actually owned by their customers. For example, policyholders own mutual insurance companies such as New York Life and Northwestern Mutual, so those firms can point to genuine alignment with clients’ interests. New York Life’s brand, centered on the idea Keep good going, emphasizes that every action it takes is to help clients improve their financial futures.
CK: What is one thing other sectors are doing that financial services brands should be borrowing that they’re not currently taking advantage of?
MB: Retail innovation is huge in the automotive and fashion categories, but financial brands have been slow to consider major changes to how they sell their products. Notable exceptions of brands that have listened to the marketplace and adapted include online-only Ally Bank and Esurance. Umpqua Bank is another standout. Its branches are called “stores” and feature a concierge-style front desk, Ritz-Carlton trained employees, interactive wall displays, computer cafés, and a hotline directly to the bank’s president.
CK: What is the biggest mistake you’ve seen a financial brand (or brands) make in the recent past and what can we learn from it?
MB: Saying one thing and doing another has been a huge mistake for financial services brands, since they operate in a segment where trust is paramount. A lot of major firms were guilty of this in the lead-up to the financial crisis and the sector is still suffering from it. Besides the opportunism that fueled the mortgage bubble and subsequent meltdown, it’s not good form to claim to be serving clients’ best interests while playing both sides of the table, or to launch positive product campaigns followed by major fee hikes. While most banks have regained a degree of transactional trust, it will be much harder to recover the relational trust that existed in decades past. The lesson is the oldest one in branding—great brand experiences are built by delivering the brand promise.
CK: Please briefly describe what you consider to be a recent success story among financial brands.
MB: Vanguard’s “at-cost café,” a branded coffee truck, visited major American cities and sold coffee for 26 cents a cup—one-fifth of the average cost, just like Vanguard’s fund fees that are one-fifth of the industry average. The stunt tangibly illustrated the brand’s value to consumers and attracted major media coverage without any ad spend. The campaign showed that Vanguard knows how to keep things fresh and relevant while still staying true to its underlying principles.
A version of this interview was first published by Branding Magazine (February 2015). brandingmagazine.com
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