What is the value of a bank brand in 2020?
With few exceptions the banking industry appears to be finding it increasingly hard to come to terms with the prescience of start-up FS brands like Starling and Monzo. Kantar recently released a report that said traditional high street lenders had lost a collective £1.6bn in brand value over the last 12 months. This is a big figure. Especially when you consider it means the eight biggest banks in the UK declined by an average of 7% in 2018. This was once a category built on a reputation of an established name backed by grand buildings and the endorsement of grand parents or similar figures of note with grey hair and wise words
But it can’t be so simple that the upstarts have turned people’s heads with brightly coloured cards. When Kantar results were published the tone of much coverage, especially that by the traditional FS media was that the new players like Revolut, Monzo and Starling were in some way to blame, that it was their fault. That is really odd, true some of the upstarts have been guilty of questionable marketing; Revoluts rip-off Spotify campaign, which in their own words featured stats ‘we just made up’ was pretty poor. But there is more going on to explain the big banks troubles.
What most of the new brands offered was a human faced service. But this is often the case for any well-funded disrupter in an established category. Attack bloated established competitors with fast customer service and a humanised tone of voice. This is a tough one for the banking industry as with the clear exception of First Direct most UK banking customers think the service they get from their bank stinks. That fact remains even after multi-million pound rebrands and relaunches. Most UK consumers don’t value bank brands.
The very thing that made the big banks so valuable, is the one thing that now makes them so vulnerable. Their traditions and part within the old order. The current climate of mistrust in institutions only goes to further weaken the banks new advertising, it’s not the message. It’s the product truth. Monzo and the other new banks, are not more valuable brands because of feature superiority, they win because they are not perceived to be part of the enemy.
But does this matter? is it just a natural resettling of value in an always on digital world? Underpinned by the fact, the traditional lending banks are not losing stacks of customers. Switching bank brands is after all something very few of us actually do. Many may open second or third accounts. In the UK we average 2.4 accounts each. But actually, leaving one bank brand for another is only done by 1.4% of us last year.
We will see more banking advertising with customer service claims at the heart. There will be more start-ups. But trust and brand value are unlikely to go up. It’s not about brightly coloured cards or epic TV spots. The core tenant of the category is just not liked. I mentioned before First Direct. For 30 years this HSBC owned outlier brand has been consistent in the way it talks and behaves, standing as it always has, as a customer centric entity first, bank second. Banking just different. Its customers have also been consistent in voting it best for service year after year. Recently awarded yet again Best Buy status by consumer champions, Which magazine.
So maybe the perfect bank for 2020 is an established bank after all. Just one that does not behave like one.
