Branding is a new concept in the financial industry, if you consider the industry goes back to ancient civilization. However, it's critical to success in today's environment.
If you watch old western movies or TV shows, you’re familiar with the frontier banker. There was one bank in town – a solid, trustworthy-looking building of red brick with hefty bars on the windows – where you could go to deposit or borrow money. So simple. No branding necessary. People patronized that bank because it was there, not because it was a preferred alternative.
Fast forward 100 years, and things were pretty much the same. By the mid-20th century, there may have been more than one bank in town, but it was easy to pick one. Did you want a new toaster? Or whatever the competition was giving away?
My, how times have changed.
Today, we’re surrounded by myriad types of financial institutions, both brick and mortar and online. Competition for customers is fierce. But you’re on top of it, right? You’re working on multiple fronts to attract and retain customers:
- Advertising heavily
- Offering new products and/or services
- Considering mergers or acquisitions to broaden your capabilities and reach
- Adding new technologies that appeal to tech-savvy customers and increase back-end efficiency
But what about brand building? Your great products and services will go unnoticed if no one knows who you are. Or if your bank looks just like the next one.
Most Banks Are Lousy At Branding
According to international business consultancy Prophet, “Branding is a relatively new concept for the financial industry. They are slowly realizing that they need to manage their strategic assets, too.” Very slowly. The Design Channel says, “Most banks earmark very little of their annual operating budgets to brand building and management when compared to infrastructure allocations (facilities, equipment, information technology, etc.) – and it shows.”
“When it comes to effective branding,” they say, “the banking industry has been among the worst to achieve it.” They blame that on the fact that many bankers think branding isn’t worth the effort because everyone offers essentially the same products and services, in the same environments. How can you differentiate yourself when you aren’t different?
Well, OK then. No reason to bother with branding.
Except for one little detail. The Design Channel goes on to note that “this is exactly the environment in which strong brands have historically prevailed.” You do want to prevail, yes? A strong brand speaks to your bank’s reputation, quality, and trustworthiness -- the very factors that inspire prospects to choose you over the competition. Simply deciding to proactively pursue branding differentiates you and puts you ahead of the banking pack. And the more you work to refine your brand, the more visible and credible it will become.
Also Read: Every Enterprise Needs A Data Protection Officer
What’s In A Brand?
A brand is your bank’s identity – its personality, values, and traits. It is a tangible and intangible business asset that provides shareholder value and longevity and, yes, distinguishes your business from others.
Strong brands are:
A brand is not your logo, your slogan, or your marketing, advertising, or public relations efforts. Those are techniques you use to communicate your brand and make it instantly recognizable.
A strong brand gives you more control over your bank’s future. It enables you to communicate consistently with customers, peers and the public. It enables you to create relevant, captivating multi-channel marketing. And it supports an internal culture that excites and motivates employees.
Strong brands win because they offer a holistic experience that inspires confidence, trust and loyalty. In turn, customer loyalty creates a strong, predictable business foundation and it reinforces and raises your brand value.
Effective branding can make your bank a winner in five ways.
1. A Strong Brand Sharpens Your Competitive Edge
It enables you to establish an emotional bond with your customers, be they individuals or commercial enterprises. More than your products or services, it’s your bank’s reputation -- your promise.
A strong brand not only resonates with people, it is instantly recognizable. When you’ve earned the right to be heard, your message rises above the billions of “white noise” information bits that assault us every day. When customers can hear you, it’s easier for them to choose you. Your bank is less vulnerable to the outside forces that aim to steal your customers.
2. A Strong Brand Builds Trust
Trust is paramount when it comes to money matters. Customers perceive strong brands as lower risk and higher value. That strengthens your bargaining power with vendors and potential partners. It also fuels employee pride, reducing turnover and helping you attract top talent.
3. A Strong Brand Speaks Directly To Your Most Desired Customers
Today’s content-driven world makes everyone an empowered decision-maker. Strong brands support that by positioning themselves as helpful resources, not just purveyors of services or products. That builds consumer trust and confidence.
4. A Strong Brand Relieves Financial Pressure
Banks are businesses, too. Highly-regulated businesses. Changing tax policies, increasing regulation, and the need to both cut costs and find new revenue sources make these uncertain financial times for financial services companies. A strong brand mitigates these risks with goodwill that boosts customer loyalty and actual company value.
5. A Strong Brand MItigates M&A Pressures, Too
Thanks to all the advantages that accrue from building a strong brand, banks that hope to remain independent can protect themselves from unwanted overtures or takeovers. For those that wish to acquire or merge with another entity, a strong brand boosts negotiating power.
You Need A Brand Strategy!
Why? A strong brand-building strategy:
- Sets your bank apart from the competition
- Enables customers to connect with you emotionally
- Creates trust
- Builds loyalty
- Increases employee morale
- Expands market share
- Increases shareholder value
Branding doesn’t mean changing your name (again) or designing a new logo (again). It’s about demonstrating value. Each customer is a unique individual or business, and their entire experience with your bank must reflect that.
Banks have always invested heavily in marketing, but surprisingly few spend much time contemplating or promoting their brand. Those that do can quickly take and keep the lead in customer acquisition and satisfaction.
Global Banking & Finance Review said it all in a recent headline: “It’s never been more important for banks to take branding seriously.” Building a strong brand will help you succeed. It will protect your band in uncertain times as well as when things are going well. Are you ready to get serious about building and living your brand?
Or do you think your bank doesn’t need branding? Your big name is no big thing any more. Your bank’s legacy may be indisputable. But, frankly, it’s not worth much these days unless you’re backing it up with cutting-edge, customer-centric products, services, and attitude – in other words, a strong and modern brand.
Strong branding is no accident. It’s a deliberate, strategic process, and the first step is establishing trust. In my next article, I’ll explore how trust affects decision-making in banking and how building trust can bring across-the-board benefits for your business.