A quantum leap is occurring in the influence
of brands in financial services. Mega merger
mania and global deregulation is driving the
rise of global brands. UBS now dwarfs its
local competitors and HSBC is re-branding
all its global retail operations under one
corporate brand. In the UK, market shifts
such as the increasing consumer interest in
financial decision making, the rise of the
stakeholder pension, and the internet as a
channel, are forcing companies to invest in
brand building exercises with consumers.
B a n k
B r a n d
The financial services sector is notoriously lacking strong brands.
This summary of a recent global study investigates the va l u e
that strong branding can deliver and recommends how to
maximise this value, amongst all a compa n y ’s audiences.
on the
PAPER1Banks.A/W 5/15/01 3:55 PM Page 1
B a n k on the B r a n d 3
The Changing Role
of Brands in Businesses
The changing role of brands from a
marketing tool to an organisational
principle for business is part of a historical
trend. Brands were first regarded merely
as trademarks (brand names and logos)
which differentiated one product or
service from another. This concept of
brand differentiation was then extended
Figure 1: The Brand Ic e be rg
into whole visual identity systems w i t h
guidelines for everything from packaging to
advertising, seeking always to differentiate
the ‘look’ of the product. More recently, it
has been recognised that brands define
ongoing relationships through the power
of their personalities and values, which
further differentiate the branded products/
services from their competitors.
Initially, only the customer relationship
was considered. Now, the leaders in brand
management recognise that brands define
relationships with all their key audiences,
notably investors and employees. They
also acknowledge that relationships and
values relate to behaviours. This means
that in the best managed brands, the
brand’s values are accepted and practised
by the workforce, particularly in service
businesses like travel, hospitality and,
of course, banking and insurance. The
employees have a relationship with their
brand that is the counterpart of the
intended customer relationships.
This recognition that brands now serve
as much more than just an identity system
can be illustrated by the concept of the
“brand iceberg”. Like an iceberg, only a
small proportion of the brand’s mass and
power is visible, the rest is intangible and
hidden. But effective brand management
requires attention to the hidden brand
elements as much as to the visible ones.
Brand
Experience
Externally
Brand
Experience
Internally
Name
Advertising
Logo
Brand Identity
Environments
Products & Services
Brand Values
Management-Control Structure
Internal Communications
Business Process
Investor Relations
Customer Relations
Training
Quality
Staff Motivation
Knowledge Management
Recruitment Policies
HR Policies & Processes
Technology
© 1999: Interbrand Group
2 B a nk on the B r a n d
the same time, powerful
consumer brands, like Virgin
and Sainsbury’s in the UK, have
successfully launched financial services
with no previous experience, but with
loyal consumer relationships. Branding is
transforming the way financial services
are communicated, just as surely as IT
systems are transforming the way banks
do their business – and assisting new
brands to set up banking without branches.
How is that quantum leap reflected in
the way financial services companies are
defining and managing their brands and
their businesses for the future? Interbrand
has just conducted a survey designed to
answer that question. We asked 24
financial institutions around the world
how their principal customer brand is
used and managed, both externally and
internally.* The answers reinforce the
increasingly widely-held view that the
brand is fast becoming the major
competitive asset for companies. But
more importantly, the answers also
show that the role of the brand w i t h i n
the management of business is changing
dramatically and the way businesses
operate is changing as a result.
Although some long-established banks
and insurance companies still see their
brand merely as an aid to awareness and
recognition, the new entrants and those
institutions that are radically transforming
themselves put the brand at the centre of
their corporate strategy. This means they
are aligning all their communications,
their operations and their systems to their
brand mission and values – and working
to make all of their employees effective
ambassadors for their brand. They assert
that the brand symbolises all that makes
them different, so they are trying to
ensure that their individuality is
transmitted in all their activities. They
are taking the same stance as Kenneth
Chennault, Vice-Chairman of American
Express, who said in a recent interview,
“While there are many directions a
financial services company can go today,
we will only do that which supports the
growth of our brand”.
In other industries it is well accepted that
putting the brand at the centre of corporate
strategy is critical to success, BMW, Coca
Cola and Tesco being good examples.
Our survey indicates that some financial
services companies now take that line and
are working to make it happen. However,
many others still have some way to go.
AT
Survey respondents were assured anonymity.
Survey was conducted in association with the
London Business School’s MBA programme.
*
PAPER1Banks.A/W 5/15/01 3:55 PM Page 2
B a n k on the B r a n d 5
been integrated into the business
processes and into corporate policies.
Stage 1: The brand as a visual
identification system
Among our survey sample, a clear brand
architecture or hierarchy and a carefully
protected brand identity are universal.
All have a well-defined brand name and
visual identity that is very familiar to
both customers and non-customers. Every
organisation has someone dedicated to
overseeing the expression of that b r a n d ,
ensuring that it is not distorted or wrongly
exploited. A sustainable brand must b e
c l e a r, consistent, unambiguous and
protected. Everybody understands that
and works hard to deliver it.
For the companies who are at the first
level of brand development, visual
identification is the only role described
for the corporate brand. These companies
have traditionally placed a lower priority
on developing and associating values with
the brand and have focused on it
principally as a naming device, which
raises customer/prospect awareness.
Consequently, we would argue that they
have left much of the brand’s potential
value ‘on the table’, by not clearly defining
a brand personality or a relationship with
all stakeholders, especially employees.
Several respondents from bank marketing
departments highlighted the contrast
between marketing and banking m e n t a l i t i e s
as the principal cause of the limited use of
the brand. As one put it: ‘Marketers think
laterally and in c o l o u r. Bankers think only
in black, white and grey’.
Another commented that, ‘Staff are
enthusiastic about the brand but are not
inspired by it and don’t know how to
express it (in their work)’.
Further discussion clarified this contrast
of mindsets – if revealing some sweeping
generalisations. ‘Marketers’ are orientated
around customers and want the bank’s
services to address their differing needs
and preferences. ‘Bankers’ are orientated
around their systems and procedures and
want to match customers’ requirements to
those constraints. Clearly, these two
attitudes will trigger very different types
of customer relationships – and hence
distinct brand personalities.
Stage 2: The brand as focus for
stand-alone product development
The second type of brand use we
encountered in our survey separates the
operating brand from the master brand.
The established corporate brand identity
is reserved for the traditional offering
of financial services and a new daughter
4 B a nk on the B r a n d
The survey respondents who are most
advanced in their brand thinking,
endeavour to manage the brand’s identity
not just through its visual expression but
also through intangible elements, such as
proactive investor relations and employees
who deliver the brand values in customer
interactions. Consequently, they ensure
that all the interdependent elements of
brand management have been revised to
reinforce the brand strategy.
The Four Stages of
Brands in Financial Services
The survey responses show that there
are four clear types of brand use among
financial institutions around the world.
They are depicted in Figure 2. As you can
see, each stage builds to the brand-centric
strategy evident at the fourth stage.
The key difference between the first type
of brand use and the others is that at the
Visual I d e n t i fi c a t i o n system level, the brand
is externally focused only and little attempt
is made to incorporate any core brand
values within the management of the
business itself. At the other levels, a greater
or lesser effort is being made to address
and inspire the workforce and o t h e r
audiences (such as investors) through the
brand. At the second and third stage, there
is an active attempt to inculcate the ‘brand
values’ into employees’ working approaches
and at the fourth stage, the values have
Low
High
High
Role of
Brand
within
business
strategy
Value of Brand to Business
Figure 2: The Four Sta ges of
B rands in Financial Se r v i c e s
Stage 1:
Visual
Identification
Stage 2:
New Subsidiary
Development
Stage 3:
Catalyst for
Corporate Change
Stage 4:
Centrepiece of
Corporate Strategy
PAPER1Banks.A/W 5/15/01 3:55 PM Page 4
B a n k on the B r a n d 7
Case Study
‘Prudence’ is a financial services provider in the southern hemisphere. It
faced growing competition in its home market and had identified that a major
internal organisational change was needed across all areas of the business to
deliver improved performance consistently. The company wanted to develop
more of a customer-focused, marketing-driven mindset and reduce the
administrative back office banking mindset. It was also concerned to ensure
that customers would see a change in procedures and in staff behaviour as
well as in attitudes. It saw the corporate brand as the best vehicle to use to
drive this change.
The top management defined a vision and set of values for the brand, in
consultation with their staff, that reflected the sort of relationship they
wanted to establish with their customers. They then set up a Brand Council,
with representatives from operating divisions and HR as well as marketing,
in order to direct development of the brand, supported by a brand
management team of marketing experts to implement the plan and manage
the budget.
The council launched an extensive internal communications programme to
drive the culture change, coupled to a highly participative programme of
sub-projects with retail staff to define how to apply the brand values to daily
behaviour in customer interactions. They also led an initiative to redesign
training, recruitment and reward policies to reflect the brand values.
In order to sustain the momentum for change, the brand management team
are now investigating ways to measure performance that will show how
effectively the new brand values and culture are being delivered and lived –
and reflected in financial performance. They have given themselves a target
of two years for full implementation and adoption of the brand values.
6 B a nk on the B r a n d
brand is established for a new type of
service, e.g. telephone or Internet banking/
insurance like those offered by Smile or
Egg or Cahoot. The rationale for this
strategy appears to be that while the
p e r s o n a l i t y, style and culture of the overall
organisation is too entrenched for a radical
change, a new service can be developed
which is managed in a completely
different way and kept separate from
the parent. In each instance, the new s u b -
brand is an integral part of the intended
relationship between the brand and its
stakeholders.
The survey reveals that in these cases the
corporate brand continues to be confined
to a name and a visual identity for
external communication, as described at
stage one. However, in the telephone and
Internet-based operations, the sub-brand
is heavily used for both internal and
external explanation of the service and is
seen to be central to the development of
the new business. It also enables the new
service to be strongly differentiated from
the parent organisation and brand.
The critical change occurring is that
operations staff (bankers) of the new
service, and not just the marketing staff,
see the brand as conveying the underlying
service promise. The brand communicates
the values and nature of the service on
offer, and the nature of the relationship
between the brand and the customer. In
so doing, it is also informing employees
about what they should seek to deliver
to customers and encouraging behaviours
that reflect the new sub-brand’s values.
The difficulty these new branded services
face is that they remain part of a parent
institution that sees brand solely in terms
of visual identity and has a contrasting
vision and set of values. Our survey
reveals that the organisation
infrastructure, such as systems, human
resources and premises, is often shared
with the parent company, for whom the
new organisation’s brand values have no
c u r r e n c y. The respondents commented
that the resulting clash of values and
behaviours, sometimes within the same
offices, limits the effective delivery of
the new brand and the maximisation of
brand value.
There are two ways to resolve this
d i f fi c u l t y. One is to separate the sub-brand
completely from its parent and give it its
own premises, HR policies and tailored
IT systems, all of which are aligned to the
brand vision and values. The other is to
re-align the corporate brand so that its
vision and values – and consequently its
policies and systems – are consistent with
those of its successful sub-brand. The latter
approach is obviously the better way to
capitalise on the experience gained in the
PAPER1Banks.A/W 5/15/01 3:55 PM Page 6
B a n k on the B r a n d 9
the whole organisation, including back
office and support functions, to m a x i m i s i n g
the value of the parent brand.
Stage 4: The brand as the centrepiece
of corporate strategy
About 25 per cent of the companies
surveyed describe a management structure
and range of activities which indicate that
their master corporate brand is at the
centre of their business strategy,
corresponding to our top level of brand
development. In these companies, the CEO
and top team developed and agreed the
corporate brand strategy and positioning
at the same time as the business vision
and strategy. So for these organisations,
the brand has become the embodiment of
the company vision and direction and the
brand mission and values serve as the
lenses through which proposed changes
and improvements are filtered.
What are the practical implications of
positioning the brand at the centre of
corporate strategy? These companies have
a brand-driven organisational
infrastructure, comprising visibly brandcommitted
senior management teams
leading a workforce who live and breathe
the brand vision and values in their regular
activities. They also have all the features
observed in the second level companies
(standalone sub-brands and companies
going through organisational
transformation) and have been maintaining
these disciplines for long enough that they
have become part of the intrinsic fabric
of the company. For these companies, all
the policies and practices described in the
Brand Iceberg are regularly monitored to
ensure they support, not conflict with,
the brand vision.
One of the respondents in this group
c o m m e n t e d that his management’s view
was that: ‘Building a differentiated brand
is the only strategy that will lead to longterm
value creation’ as well as assisting the
success of other interventions, e.g.
acquisitions, process improvements. As a
consequence, the Chief Executive and the
senior management accept responsibility
for the brand’s performance and so, in
their individual departments, do most of
the staff. Their Brand Development team
includes service, operations and sales
people as well as marketing. Two brand
managers share responsibility for customer
satisfaction, internal communication and
monitoring/evaluation of the brand.
Another institution in this group is
arguably expanding its brand use even
further. They have a similar brand-driven
strategy and organisation and are now
planning to use their brand strength as
the basis for diversifying beyond
8 B a nk on the B r a n d
new operation, particularly if the subbrand
is part of a broader strategy for
transition from product to customer
focus, but is a much greater organisational
challenge. As one survey participant
commented, “internal jealousies and
rivalries often hinder the transfer of best
practice between the parent and the
new brand”.
Stage 3: The brand as a catalyst
for change
The third type of brand use revealed
by our survey is seen among financial
institutions who are using the corporate
brand as a catalyst for a significant
organisational and cultural change
programme.
The companies in this group have identified
a need to improve the competitiveness of
their service – primarily though raising
their standards of customer service. They
have also recognised that the powerful
retail brands entering the market are
doing so on the back of their association
with value and consistent service. So
they want to build their brands to
compete more effectively. They know
that their brands have high awareness,
but need to convey stronger relationship
characteristics of quality customer service
and personality if they are to resist the
competition from new entrants. For an
example of this approach, see Case Study
on page 6.
In this third type of brand use, the brand
is given a more central, strategic role in
the parent business than in the other
companies discussed so far. It is
positioned as an emblem of the vision
and values of the whole company and is
used to emphasise the importance of
customer relationships to the business.
It is used as much to motivate staff as it
is to communicate with customers and it
is managed by a cross-functional team,
who have a long term, business-based
perspective on its development.
It is clear that this is a transitional stage
of brand development. The companies
involved all intend to move to the highest
level of brand management, placing the
brand at the centre of their business
strategy, but acknowledge that the
sustained shift of values, culture and
behaviour will take some time to achieve.
The critical issue for these organisations
is whether they can sustain the momentum
behind the new brand-driven culture until
it is universally accepted. It is harder than
setting up a new standalone service with
a sub-brand, as undertaken by our second
group of survey respondents, but has a
much higher pay-off, since it will align
PAPER1Banks.A/W 5/15/01 3:55 PM Page 8
B a n k on the B r a n d 11
Leveraging the Brand in Mergers
The recent and successful Royal Bank of
Scotland bid for NatWest brings a number
of issues into sharp focus. So far it seems
that both brands will be retained, but our
survey suggests that this may make it
much harder for the management team to
bring about the necessary organisational
change. Perhaps they will re-launch each
brand with a new brand vision and values
(and identity?) which will drive new ways
of working and relating to customers.
Alternatively the Royal Bank of Scotland
brand could be the best way to drive
changes through the NatWest organisation?
Or a new brand could be created.
Any transformation will require a major
positioning and organisational change
programme. Its objectives are to reassure
customers of the benefits that will flow
from the change, to allay the anxieties of
employees about their careers and their
conditions of work and, not least, to
comfort investors that the cost of the
acquisition or privatisation will be
recovered through clear focus, direction
and exploitation of synergies.
The lessons from our survey are clear.
The corporate brand is the ideal vehicle
through which to signal and drive change.
In fact, a strong argument for re-naming
(or consolidating around one of the
previous names) is that it provides a visible
change which can support a whole new
vision, mission and set of brand values,
reflecting the organisation’s altered
position in its markets. The re-launched
brand becomes the embodiment of the
new mission and values of the changed
corporation.
An internal communications programme
based around the brand provides the
opportunity to get the workforce excited
and ‘signed up’ to the new values and
behaviours. A participative change
programme entrenches the new values by
incorporating them into business processes,
systems, HR policies and performance
measures. A new visual identity and
external communications campaign grabs
the attention of customers and explains
the new mission to them. And the obvious
coherence and professionalism of the
overall programme reassures investors
and analysts that the company has a
clear vision and path to its future.
10 B a nk on the B r a n d
conventional retail banking services into
a broader role as an ‘intelligence agent/
broker’. This is because they know that
their systems and processes consistently
deliver their brand values and so their
brand connotes a quality of relationship,
rather than just a collection of banking
services. Clearly, at this level, the brand
offers a much broader and stronger range
of benefits – and higher share-holder
value – to its owners than brands do for
the financial institutions that use them
solely for visual identification.
Key Lessons for Managing
the Brand
What are the critical actions for financial
institutions that wish to maximise the
value of their brands by making their
brand strategy an integral element of
their corporate strategy and aligning their
operations to that strategy? Our research
results indicate the following:–
• Understand and bridge the gap
between banking and marketing
mentalities by establishing the financial
value that brands bring to the business.
• Demonstrate ongoing, visible
commitment to the brand across the
whole senior management team.
• Align internal communications with
brand values; make the message
meaningful and inspirational; repeat
it often and through multiple media.
• Manage the brand with a high and
wide degree of participation but
control it centrally, until the brand
values are second nature to all.
• Build the brand philosophy and values
into recruitment, training and HR
practices as well as business processes.
• Measure brand performance in a
manner that encourages customer
bonding and not just awareness; use
employee performance appraisals to
encourage behaviour in line with
the brand values.
Those financial institutions that have
succeeded in building a powerful
corporate brand have done so through
strong management and have used it to
generate greater shareholder value, i n c l u d i n g
the power of the brand in mergers.
None of the companies we surveyed had
experienced a major change in their
ownership, but this is one of the increasing
trends in the industry. This suggests that
if branding could be used to catalyse a
successful merger, acquisition or, in some
countries, privatisation, it would drive
the creation of substantially more value.
PAPER1Banks.A/W 5/15/01 3:55 PM Page 10
B a n k on the B r a n d 13
Interbrand was established in 1974 and is now the world’s leading brand
consultancy with 25 offices worldwide. Our disciplines include strategic
consultancy, brand valuation, corporate and brand identity, market research,
name development, internal brand management, innovation and trade mark
law as well as full digital expertise.
We employ over 700 people from a variety of backgrounds: management
consulting, strategic planning, brand management, design, copywriting,
accounting, market research, and trade mark law. Our services and our
people are dedicated to creating, developing and managing our client’s most
valuable assets – their brands.
Interbrand’s aim is to build demonstrably valuable and valued brands for our
clients, and for all their audiences, whatever market or sector they operate in.
Other publications from Interbrand:
The Future of Brands
Co-Branding The Science of Alliance
Telling Stories
Trademarks
Brands The New Wealth Creators
Brand Valuation
Naming
Utopian Nights
The World’s Greatest Brands
The Secret of Design Effectiveness
The Trouble with Words
12 B a nk on the B r a n d
Conclusions – The Value of Values
The state-of-the-art in strategic
management through the corporate brand
sees financial services companies using
their brand as the uniting symbol of their
differentiated direction and values. For
the leading practitioners who are already
there, we foresee that the next stage will
be for them to integrate brand values into
their balanced business scorecards or
other performance measurement systems.
They will set targets for managers and
staff related to the delivery of brand
values in their daily work and their
reward/bonus systems will recognise
achievement in upholding brand values.
The top level brand practitioners in our
survey are already tracking brand
performance closely but none have yet
tied these measures into their scorecards
or bonus schemes.
Having implemented all that, these
leading edge companies will then start to
report externally on the performance of
their brand, demonstrating publicly how
they have increased shareholder value.
As long as shareholder value continues to
be the yardstick by which equity markets
evaluate company performance, and as
long as intangible assets constitute over
80% of many companies’ market value,
there will be unceasing pressure on
company directors in financial services,
as in other industries, to show effective
management of their most important
intangible asset, their brand.
PAPER1Banks.A/W 5/15/01 3:55 PM Page 12 |
|
