Big brands in the consumer and technology space have led the way – people want to identify with brands that are purpose-led. This is difficult in banking, where products and services are seemingly commoditised. What can banks do?
This blogpost is the first in our five part series on “Five strategic imperatives for marketing executives in banking.
Purpose drives business in banking
Richard Branson commented in 2016 that:
“The brands that will thrive in the coming years are the ones that have a purpose beyond profit.”
Since then, many brands have become purpose-led: Apple puts privacy first; tech companies in general promise an intuitive user experience for complex tasks; and neo banks want to enable everyone to invest and participate in the financial markets. And they are all entering the markets of traditional banks.
The question remains: Why are many established banks still struggling to define and act on their purpose to develop a sustainable value proposition?
Although many banks say they are “becoming purpose-led”, most of their efforts are being put into so-called ‘purpose driven’ tactical products, for example in the field of environmental, social and governance (ESG) issues. When it comes to branding and marketing, Swiss banks are not making their purpose evident at their touchpoints – be it a website or a personal relationship – so customers can feel and experience the purpose of their bank’s identity.
A look at the websites of Switzerland’s major retail banks confirms this view. If we remove their logos and colours, we are left with unrecognisable and interchangeable content; without them it is not possible to distinguish between the brands.
We acknowledge that regulation is tight, and since it has a direct impact on products and services it can be a limiting factor for brand differentiation. We believe that having clear brand purpose helps to increase customer engagement and loyalty across touchpoints – such as websites and mobile applications.
Remove the logos and colours from the websites of Swiss retail banks, and their content seems interchangeable, lacking a clear brand message.
What is a purpose-led brand and how do banks benefit from it?
A purpose-led brand is rooted in and driven by its core mission. It exists to solve a problem or fulfil a need in society, and its purpose shapes brand’s values, value proposition and visual identity; and it influences corporate decision-making. It is the secret recipe that makes a bank relevant and necessary for its customers, employees and society. However, we observe that banks and other financial service providers often want to be everything to everyone – thereby diluting this underlying theme.
Based on our experience in helping organisations to define a purpose-led brand, we have identified three key issues that banks need to consider:
- Customers and employees are purpose- and value-led and therefore select brands they can identify with
Brands compete for the attention and time of their (potential) customers. Having a clear purpose and values that align with the beliefs of customers and employees is therefore key to delivering a distinct message to the market.
- Differentiation through products and services is increasingly difficult
Regulation and compliance set tight boundaries for products and services for all players in the financial markets. Differentiating through products and services is therefore increasingly challenging, and with non-traditional players like fin-techs entering the field, it is also becoming even more difficult. Innovation cycles are getting shorter, expectations of customers are rising, and changes are happening at an unprecedented speed. In this context, a purpose-led brand can create differentiation on an emotional level that goes beyond an organisation’s products and services.
- Banks suffer from loss of trust and damaged brand reputation
The financial crisis marked a turning point. Since then banks have been subject to much greater public scrutiny, and misconduct results quickly in further loss of trust and credibility – recent examples have shown that Swiss banks are not exempt from this. Being successful is not enough to (re)gain trust; banks need to connect with their customers through purpose in order to matter – a majority of HNWIs can imagine having a wealth management relationship with a big tech firm (Source: Deloitte Report "10 Disruptive trends in wealth management").
Start by defining your bank’s purpose to get your marketing ready for the digital age
Take an inside-out approach, i.e. do not start with the company’s products and services and then find the right customers for them. To define a powerful brand purpose, start by understanding the customers. Only then you can define a clear brand purpose that aligns with their desires and needs.
We see the brand purpose as the central element in a successful branding strategy. It connects banks and customers on the one hand through shared values, e.g. “Sustainability is important to me. Bank X is leader in this space.” On the other hand, it also creates a strong bond through shared experiences that fulfil customer needs. “I want to buy a property and bank X has a special package for young families.”
Deloitte Digital’s Brand Purpose framework describes how to define a brand purpose and consistently bring it to life through experiences.
|If you think that your bank’s branding can be improved, or if you are interested to learn in more detail about this and the other four imperatives, (Customer Experience, Content Creation, Digital Engagement and Products and Services) contact us – we would be happy to hear from you!|