Fixing the Bank Brand Nightmare

Consumers have never exactly adored their bank. When a consumer conjures up a brand of emotion, banks don't exactly make the list, as does, say, an Apple or a Honda.

Let's face it, banks suck. Who actually wants to deal with a bank? If you had to choose between first going to the dentist or stand on line at your bank to make a deposit, you'd think long and hard about the decision.

But that negative perception has been amplified by the erosion of trust spewed by the credit crisis. Forget about making banks “un-suck.” The first priority is changing the “mechanics” of perception about banks.

Consumers just don't get banks. I have enough trouble understanding how banks work, and I've been writing about the industry since 1993. The average consumer doesn't understand, which is why I think most consumer will view positively an effort to educate them about the safety and soundness of an institution. The results of the notorious stress tests separated the wheat from the chaff in banking, as it were. The starting point for a brand resurrection should be those results. What you are saying to consumers by focusing on your safety and soundness is, “Let's forget about the service, let's forget about the branch network, here's how I am. We're going to change the paradigm by explaining to you how it works. And this is the first of many changes in paradigm.”

You may counter that consumers couldn't possibly grasp the intricacies of the SCAP, and I cannot disagree with that assessment. But such a safety-and-soundness approach is more about the starting point. A rebuilding of brand begins with a rebuilding of approach and with honesty. The beating heart of banking is safety and soundness. Everything will fall into place from there.

Tags: analytics, brand, consumer-banking, marketing, retail, safety-and-soundness, scap

Comment by Michael Bina on March 16, 2010 at 9:17am: Nicely put, pal.

Comment by Brett King on March 16, 2010 at 9:32am: I'd probably choose the dentist...

Comment by Jerry Ashton on March 16, 2010 at 9:35am: Frankly, i would expect to get "drilled" at whichever location...but more painfully at the bank. I invite you and others to read my "Pigs at the Trough" blog: www.WrittenOffAmerica.com/blog and would love your comments.

Nice blog...and love the truth in your last two sentences.

Comment by Bo Hussung on March 16, 2010 at 10:26am: Branding for most banks has only recently become a problem as it relates to building trust. JJ, as I agree that soundness is a critical component of building the brand to consumers, the more important element (IMHO) is building trust the old fashioned way - through meaningful relationships. I am not sure when it actually happened, but I estimate that it started back in the 80's during the mega-bank merger exuberance. The bigger the bank became, the more they moved away form the consumer. They disengaged relationships and alienated their customers. Banks profit not only on sound financial practice, but through solid deposit activity from their customers in order to develop good lending to those customers.

I recently switched banks here in Nashville for this exact reason. The bank I was with created policies that further alienated me as their client and I switched to one that knows my name and communicates to me as a valued customer. They make decisions at the branch level that bridge the gap between common sense and exceptional customer service. There are still credit committees, but not without me knowing that my branch manager and officer know how to properly articulate my unique circumstances. This is missing at the larger banks and perhaps one of the reasons that the local, smaller community banks are doing okay in this economy. They know their customers!
Bo

Comment by Luke Owen on March 16, 2010 at 10:35am: I think that most consumers realize if your name doesn't begin with a B and end with an A or your icon doesn't include an umbrella, in the words of our former leader, you're not an "evil doer". Many of my close friends are taking the initiative to start banking locally. When looking for a new bank they don't usually look for the messages about safe and soundness - the fact that you're a locally owned community bank takes care of a good portion of this mindset. What they're looking for is a bank that will help guide them through the difficult decisions in their financial life - and make it easy to do so. And this takes more then catchy slogans. As a wise man once said, actions speak louder then words.

While i'm not saying it is not important to have some information about what it means that you're safe and sound on your site, maybe have a video of your president explaining why you're more solid then the guy next door, but don't put all your eggs in to this basket because this isn't necessarily going to bring in new biz. It may help retain, which is a lot easier to do then acquire, but if you're looking for new biz, focus more on this concept that people are looking for easy to understand answers from someone they know and trust. If you can be this person / institution, you'll win out every time.

Comment by Frank Rauscher on March 16, 2010 at 10:36am: You stated " A rebuilding of brand begins with a rebuilding of approach and with honesty".
Were you aware that one of the major NYC banks told the SEC that they have never represented to their shareholders that their officers and directors are honest? That was their defense! This was in response to an action brought by a former employee who was exposing their practices to "help" leaders of foreign companies "hide" their money and evade taxes. The sad part is that there are thousands of good community bankers that are tarnished by the actions of the money-center "bankers". Where is the outrage from the big bank executives about the report just released about Lehman and their Repo 105 tricks? Have you seen any internal memos coming from the big bank CEOs telling all employees that if they ever become aware of such dealings at their bank - blow the whistle!!! And you will not get fired for blowing the whistle!!!
You have stated the branding situation well. But it takes actions and not words to "Fix the Brand". I have personally given top management at many of the majors an opportunity to show leadership in repairing the brand by asking them to define "predatory lending" for non-mortgage consumer products. They are not willing to start with that simple request for the benefit of consumers. I have stated in previous comments there does not appear to be any principled leadership by the majors. Anybody from a major bank care to ask their top management why they would not be willing to be a leader? If they are, let me know.

Comment by Jerry Ashton on March 16, 2010 at 10:50am: Frank - your comment should be emailed out to every bank in the U.S. Please honor me by sharing it on my bankers chapter at http://writtenoffamerica.com/the-chapters/chapter-7/

Comment by Jeffry Pilcher on March 16, 2010 at 1:24pm: I think the public is ready for cap ratios. It's not that complicated, and the concept drives straight at a financial institution's security, safety and soundness.

Comment by Bo Hussung on March 16, 2010 at 2:47pm: I don't think the general public even knows what a Cap Ratio is.....as that would be a good thing, I believe the public would be better served with the bank building the relationship first and their individual banker helping them and answering questions when they arise....not just using sound bite advertising and PSA's.

Comment by Tracy Bramlet on March 17, 2010 at 8:51am: JJ while soundness and safety are certainly key components to rebuilding the brand, all banks need to begin by rebuilding their relationships with their customers. While it is unfortunate that it only took a few mega-banks to create the crisis, their continued arrogance in tacking on excessive fees, refusing to lend and lobbying against reform is hurting all bank brands. No meaningful rebuilding can occur without a concerted effort by the industry to police their colleagues because they--the big brands--dominate the headlines and the headlines are filled with greed, corruption and contempt for the customer.