E3-Global-Insight-Magazine-issue12

Global Insights Magazine Issue 12 - Edited by TANGRAM Widnau/ Switzerland July 2013

e3 insights Banks versus Brands

Inside this issue

The change in the finance industry as a challenge for the brand.

2 6 8 10 Reputation

Change

New Thinking 1

New Thinking 2

Where are we now?

The bank of the future?

The Jyske Bank case

The Fidor Bank case

Where are we now? Reputation This question is being posed not just by David Bowie in his latest song, but by a whole industry. Financial institutions around the world are finding themselves in a process of change. Legal earnings, dirty money, executive salaries, responsibility in and for the financial crisis, equity ratio or so-called tax havens.

There is almost no subject which has been left uncommented on in the worldwide financial media.

What is left is a certain loss of trust in banks – “Here we are now!” = and the question of how we would like to position ourselves in future with our brand. As a marketing expert it could be said that it was now time for an image campaign. This however would be very insufficient.

Evidence of being able to adapt to market changes must be demonstrated by action.

What do customers expect of me as a bank?

Where are our strengths? Do we need to alter anything in our behaviour? Is our business strategy still appropriate for the time?

All questions which are of a general nature and must be broken down to the individual situation of retail banks, private banks or investment banks.

New thinking is required. New concepts and a clear and credible positioning to be optimally positioned in the future with one’s own bank brand. We would like to inspire you on following pages with our thoughts!

and Branding of the financial industry

Every year the Emnid Institute carries out the “Image Profile” study in Germany. In the process about 2,500 board members, CEOs and managers were surveyed.

Even if the German result with its pride in the local car industry cannot be adapted to all European countries, it is still surprising that banks and financial service provides are ranked again second from last.

Rank Category 1 Car industry 2 Electrical industry 3 Computer/Software 4 Automotive suppliers 5 Transport/Logistics 6 Chemicals/Pharmaceuticals 7 Power industry 8 Reproduction + Media 9 Retail- and mail order trade 10 Insurance 11 Internet economy 12 Telecommunications 13 Banking/financial service providers 14 Construction industry

Reputation 743 701 689 663 662 645 644 642 641 621 614 610 594 545

No financial service providers are among the so-called “Brand Champions”.

Banks are chasing after the stars from other industries. Unfortunately it also needs to be realised that no bank brand anywhere in the world is among the 10 most valuable brands.

Willy Tanner TANGRAM for Brands & Communication Widnau, Switzerland

1 2 3 4 5

Coca-Cola (+8 %) Apple (+ 129 %) IBM (+8 %) Google (+26 %) Microsoft (-2 %)

6 General Electric (+2 %) 7 Mc Donalds (+13 %) 8 Intel (+12 %) 9 Samsung (+40 %) 10 Toyota (+9 %)

Interesting: 32) J.P.Morgan, 33) HSBC, 48) Goldman Sachs Source: Interbrand “Best global Brands 2012”

3

Where does the shoe pinch?

Reasons for the negative reputation of banks

In a current study from Switzerland those in charge of communications in 28 Swiss banks were surveyed about the most sensitive influences on reputation and problem areas.

Those surveyed basically considered the critical media coverage as the main reason for the negative image of banks. This attempt at explanation should however be viewed as an insider’s view, not that of an outsider. This is because, as is well-known, the various inputs used by the media come mostly from the banks and to a degree also from politics.

Surveyed on the subjects which have most influence on reputation, an overwhelming majority cited the tax problems in Switzerland.

If subjects specific to Switzerland are removed, then questions such as bank-client confidentiality, performance, the problem of the Euro, bonuses and management salaries or even equity-to-assets ratio remain important subjects in international financial media.

28 18

Bank-client confidentiality 13

Performance, results 12

Euro/debt crisis 11

Restructuring, jobs 10

Bonuses, rewards 10

Capitalisation 5

Regulation & Basel III 3

TBTF, government assistance 3 Libor 3

Asset management fees 2

Tax optimisation

Tax agreements

Source: Publicom/Switzerland, “Banking communications in the reputation trap�, February 12/2013

4

“The opening up of differentiation potential has only just begun”

Like any well-run company, a bank too must reassess its business model if the markets, customer perception or even technical capabilities are changing. Soft factors such as trust, sympathy and emotion are also components for a strong customer focus and contribute to differentiation. Future-oriented business models are dependent on these soft factors. A large part of the poor reputation is based on emotional perception and the way back to a good image will follow via action.

A customer tests every day whether a bank is delivering performance. Brand loyalty only arises when customers continually experience what is promised them in communications. At the same time it should be observed that a financial institution should not jump on every bandwagon and use Shiny Happy People to lead customers to believe in a healthy financial world.

That means forgetting that differentiation derives its origin from identity and competence fused in the brand essence. The opening up of differentiation potential for banks of tomorrow has only just begun. Brand strength can arise here – the best means against lack of profile, interchangeability and the well-known thesis: All banks are the same!

The most frequent misunderstandings in branding banks:

Brands do not play any significant role in the banking industry Brands are mainly used to influence customers Brands are generated through advertising Brands characterise today’s success Brands are controlled creatively, not analytically Brands are the responsibility of the marketing department Brands can be controlled technocratically

The chain of perception – an ideal case: The ideal case of a chain of perception which goes beyond the use of financial services:

Yes, I know this bank.

Yes, I find this bank good.

Yes, I trust this bank.

Yes, this bank keeps its promises.

Yes, I have been working with this bank for a long time.

Yes, I recommend this bank.

6

Change The bank of the future?

Changes are at the door. Building sites will not decrease even in the next few years.

Predicting the future is certainly always difficult – nevertheless some trends can be observed that will certain become more significant in the next few years.

“We are the people” There is a public mood, accompanied by the media that disagrees with certain bank practices. That certainly includes the financial industry’s reward system common in the western world. A system that is based on performance bonuses and in the public perception is ranked as short-term thinking. These are warning signs that financial institutions should take seriously. Certain practices in the area of investment banking are also no longer to the general public’s taste. There is a growing clamour even from politicians to separate investment banking from the bank’s core service.

“Economies of Scale” Back-office functions are coming under pressure nearly everywhere. Services that a customer does not see will in future be provided quite differently from today.

To counteract shrinking margins there may be further savings in this area.

These services may be taken over by specialist service provides who profit from economies of scale and strong focus.

“Point of Sale” Admittedly a thesis, but extremely interesting. Bill Gates, founder of Microsoft, has said something to this effect about this: “In future we will need bank services. But whether we will need a bank for them is by no means certain.”

His idea: Bank services will in future be offered where they are directly needed. At a car dealership that is selling the customer financing. Or it may be a B2B business between two industrial companies, with the provider supplying the financing for leasing at the same time as his product. It may also be a retailer who finances the customer’s purchase by microcredit.

Source: Axel Gloger, Banks & Brands

New Thinking

1

case

in Private Banking with the principle of balance New and innovative thinking is deeply rooted in the corporate culture in the second-largest purely Danish bank. Optimally positioned in Denmark as a retail bank, Jyske Bank concentrates on wealth management as a private bank in its 5 foreign branches. The financial organisation regards the current changes in the market as a genuine opportunity for the future.

Jyske Bank’s principle of balance:

customers shareholders

Jyske Bank private banking is different. No integrated investment banking, no bonus system either for management or for employees. Therefore with a corporate culture with high ethical and social standards. Namely, the Danes live out the balance between customers, employees and shareholders. Because only if this balance does not shift in favour or to the disadvantage of one or more groups will a company enjoy sustained success.

employees

It is therefore no surprise that Jyske Bank lives out a no bonus system and maintains open communication in which even the CEO’s salary can be extensively discussed. The principle of balance also provides sustainability and stability in the shareholder structure. With nearly a quarter of a million shareholders the financial organisation stands on a broad foundation. At the same time, without the bank’s agreement no shareholder can possess more than 10% of the share capital - balance takes priority.

The principle of balance is also practised in daily customer contact. “Consultancy on an equal footing” is the magic word here. The customer is regarded as a genuine and equal partner. Thus the clientele is optimally advised and taken care of without complication, helpfully and with initiative. This makes for a short decision making process – because decisions should be made as closely as possible to the customer. This is one reason why customer advisors are equipped with the greatest possible decision making power.

Being different also means going new ways. So with jyskebank.tv the customer has an in-house web TV channel at their disposal. The latest is reported daily on worldwide financial markets, trends and much more. Critical reporters and experts from the fields of economics and investments deliver in-depth reports of a high journalistic quality. So good that in October 2011 jyskebank.tv was honoured with the “Digital Communication Award” for being Europe’s best web TV channel.

Brand values and the principle of balance are also reflected in private banking communications. Jyske Bank calls a spade a spade and shows why they are thinking differently.

In Dänemark verwurzelt, seit über 40 Jahren in der Schweiz zuhause.

Fast akzentfrei. Denken Sie im Private Banking neu und sprechen Sie mit uns. jyskebank.ch/info

In Dänemark verwurzelt, seit über 40 Jahren in der Schweiz zuhause.

Fast akzentfrei. Denken Sie im Private Banking neu und sprechen Sie mit uns. jyskebank.ch/info

Jyske Bank (Schweiz) AG . Private Banking . Wasserwerkstrasse 12 . Postfach . 8021 Zürich

Jyske Bank (Schweiz) AG . Private Banking . Wasserwerkstrasse 12 . Postfach . 8021 Zürich

13-137_Plakat_Sujet2_F12.indd 1

We focus on substance and sustainable solidarity instead of back-up government guarantees.

We prefer to swim against the current instead of being driven by it.

06.05.13 13:52

In Dänemark verwurzelt, seit über 40 Jahren in der Schweiz zuhause.

Fast akzentfrei. Denken Sie im Private Banking neu und sprechen Sie mit uns. jyskebank.ch/info

TANGRAM Schweiz

Unser Bånkgeheimnis seit über 40 Jåhren.

Kein Bønus für Mitårbeitende und Månågement.

TANGRAM Schweiz

Wir setzen åuf Quålität im Privåte Bånking, ånstått åuf Quåntität im Investment Bånking.

In Dänemark verwurzelt, seit über 40 Jahren in der Schweiz zuhause.

Fast akzentfrei. Denken Sie im Private Banking neu und sprechen Sie mit uns. jyskebank.ch/info

Jyske Bank (Schweiz) AG . Private Banking . Wasserwerkstrasse 12 . Postfach . 8021 Zürich

Jyske Bank (Schweiz) AG . Private Banking . Wasserwerkstrasse 12 . Postfach . 8021 Zürich

06.05.13 13:50

13-137_Plakat_Sujet3_F12_L.indd 1

Wir båuen åuf entscheidungsfähige Beråter, ånstått åuf beråtende Wåsserträger.

In Dänemark verwurzelt, seit über 40 Jahren in der Schweiz zuhause.

Fast akzentfrei. Denken Sie im Private Banking neu und sprechen Sie mit uns. jyskebank.ch/info

Jyske Bank (Schweiz) AG . Private Banking . Wasserwerkstrasse 12 . Postfach . 8021 Zürich

Our banking secret for over 40 years. No bonus for employees or management.

TANGRAM Schweiz

We focus on quality in private banking instead of quantity in investment banking.

Wir beråten gånzheitlich und åuf Augenhöhe, ånstatt vøn øben heråb.

In Dänemark verwurzelt, seit über 40 Jahren in der Schweiz zuhause.

Fast akzentfrei. Denken Sie im Private Banking neu und sprechen Sie mit uns. jyskebank.ch/info

Jyske Bank (Schweiz) AG . Private Banking . Wasserwerkstrasse 12 . Postfach . 8021 Zürich 13-137_Plakat_Sujet4_F24.indd 1

We rely on consultants capable of making decisions, not on consultative dogsbodies.

06.05.13 13:53

We provide holistic consultancy and on an equal footing instead of from on high.

06.05.13 13:55

TANGRAM Schweiz

13-137_Plakat_Sujet1_F12.indd 1

Wir schwimmen lieber gegen den Strøm, ånstått uns treiben zu låssen.

TANGRAM Schweiz

TANGRAM Schweiz

Wir setzen åuf Substånz und nåchhåltige Sølidität, ånstått åuf rettende Stååtsgåråntien.

10

New Thinking

2

case

Social Banking Fidor Bank AG makes it possible “Banking with friends” is the slogan of the German Fidor Bank. Where it’s almost difficult to find a traditional postal mailing address. Because Fidor Bank’s home is in Web 2.0. The magic word here is not retail banking, private banking or investment banking, but social banking.

Here the customers are completely tied into the business model. Fidor Bank is more than a bank - it is a platform for exchange which allows questions of money to be discussed at any time. The community networks customers to one another with the option to ask questions about money, give saving tips, evaluate products or advisors or suggest new product ideas.

Fidor Bank rewards each customer for evaluating a financial product and adviser or for answering a question. Part of the concept is consequent communication via social media.

The time is ripe for a new self-concept for banks and customers

New concepts, new products

The most innovative bank

Some interesting and frequently award-winning product innovations are based on the community concept. For example the “Like Interest Rate”. The more “likes” are clicked, the lower the interest rate becomes. But Fidor Bank has even more to offer.

What about crowd finance. In this process users get together and promote creative investment projects in pioneering companies or regional communes. The customer then has various Crowdfinance app partners in the account to choose from. This way various projects can be supported by clicking a mouse. In return the customer receives an attractive return.

There is nearly no end to the list of awards.

International experts rank Fidor Bank’s business model as one of the most innovative in the world. Here is just a selection of prizes and awards won.

Bank Innovation Award 2013, San Francisco / USA

The community also works in marketing The current image brochure was not only put together by bank employees but also by community members.

BAI Global Banking Innovation 2012 “Disruptive Innovation Award”

Banking IT-Innovation Award 2011

Best Marketing Company Award 2011

!

Fidor Bank is an interesting example of the direction that the financial industry can develop in with creativity, courage and new business strategies.

E3 Network

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Adsmith / China Advertigo / Romania Aloft Group / USA Ansel-MĂśllers / Germany Audacity / USA Base One / UK BBC / Belgium Bernstein / Germany BMLab / Russia C&COM Advertising / Czech Republic CafĂŠ Design / Hungary DAG Communications / Italy Epoka / Poland Igriega / Spain Kirnauskis 2.0 / Finland Maitri Advertising Works / India Mandate / Singapore Media Consulting / Portugal Netural / Austria OZ Branding / Israel Preferendum / France Quarry / Canada Rainfall / Romania Recommended / Finland Recommended / Sweden SPS Marketing / Austria SanderWerbung / Germany Schindler Parent / Germany TANGRAM / Liechtenstein TANGRAM / Switzerland Truly Deeply / Australia Van Heertum Design VHD / Netherlands

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Banks versus Brands?

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This issue of the E3 Global Insights

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Magazine was published by TANGRAM.

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