As the crises in the Eurozone markets continue to dominate headlines, banking and finance brands are once again thrown in the spotlight at the mercy of consumer scepticism, reminiscent of the financial turmoil of 2008 and 2009.
However, this time, banks may be facing a bigger challenge because of a hangover of poor sentiment from the collapse of iconic investment firms such as Lehman Brothers, the merger of Merrill Lynch with Bank of America and the huge bail outs of many global banking powers three years back.
Despite the doom and gloom, industry experts say that financial institutions are beefing up their corporate communications divisions like never before, signalling big opportunities for marketing and advertising in the sector.
“In 2009, I expected our financial services to plunge,” recalls Lynne Anne Davis, regional president and senior partner of Fleishman-Hillard. “Instead, it accelerated because the financial institutions needed to communicate more than ever. The whole of the banking industry was under the microscope.”
A new survey by Campaign Asia-Pacific in partnership with Nielsen shows that the numbers support this view. The research reveals that adspend in the Asian financial sector increased by six per cent last year and is one of the fastest growing sectors in developing countries, such as China.
Across the region’s markets, statistics indicate major marketing investment from financial brands compared to late 2008 and early 2009. The survey shows that in Taiwan, US$297.2 million was spent on advertising by financial brands in Q1 2009, yet by Q4 2010 this had jumped to $459.9 million. In Malaysia, for the same period, spend increased from $437.6 million to $894 million. While such sharp jumps may not be indicative of the region as a whole, there has certainly been a notable increase across most countries. In the first half of this year, heavy spenders include Maybank and Bank Mandiri, spending in excess of $14 million and $12 million in their respective markets and far more than rival international brands.
The report also indicates that over the past few years, marketing in the sector has experienced a shift towards spending on products and services — loans and credit cards — as opposed to saving-related products such as investments and retail banking, influenced by the general growth and expansion in the Asian economy.
Current adspend most likely reflects the fact that Asia is in growth mode, and credit and loans are the crucial products for the foreseeable future as tools that can help to keep the momentum going.
Now more than ever, financial brands are realising the need to reconnect with disillusioned consumers in a bid to not only promote their services, but also to develop more lasting and meaningful relationships. Creating brand loyalty needs to be the number one priority for marketers in financial institutions in order to cushion whatever bad publicity market uncertainties are creating. While the mission is clear, delivering on that goal is proving to be the biggest and most challenging task facing all financial brand managers.
There is no silver bullet to the problem, but there are examples of what brands can do. HSBC has been touted as a benchmark. It successfully broke down its business units into distinct divisions, such as private, investment and consumer banking, enabling it to segment and target accordingly. Marketing from its consumer banking division continues to be largely consistent across markets around the globe, with the brand’s ‘The world’s local bank’ tagline consistently used, demonstrating its global power but understanding on a local and personal level. Rose Leng, head of direct propositions marketing for Asia-Pacific at HSBC explains that branding and customer satisfaction play a key role in building customer loyalty, cementing the point with empirical data. “HSBC tracks and monitors these factors regularly and from our research, we have seen HSBC’s strong brand play an important role in product consideration amongst potential customers and loyalty among customers,” she says.
Standard Chartered is also positioning itself as a bank that puts the customer first. Its recent marketing has focused on highlighting initiatives such as time guarantees on being served at branches, a bank-wide relationship-based reward programme, and easy-to-use apps.
Citibank, on the other hand, is humanising its brand by highlighting efforts to understand customers better, and promoting its commitment to listen and learn in order to create more meaningful relationships with present, and potential customers.
While these global players have adapted to the changing demand for branding, Hari Ramanathan, regional planning director at Y&R Asia, argues that many in the sector are still falling short.
“If you compare the pre-crisis advertising to the post-crisis work of most brands, you’d think nothing of significance happened in-between,” he says. “Financial marketing strategies leave much to be desired in how they leverage insights and understanding how people live their lives and relate to money in general. Brands would like to think they are conversing more, but in reality they are merely shouting at them from more platforms, and not really with any depth of understanding.”
This lack of consumer insight leaves these brands in a rather unflattering position compared to other categories such as FMCG, and Ramanathan warns banks that they really need to rethink how they market themselves.
In response, financial brands are undoubtedly attempting to forge deeper relationships with consumers by experimenting with ways to engage via social media. The general sentiment to emerge from the sector is that, akin to other sectors, brands have yet to get to grips with this most intimate of media platforms. Most marketers have started to consider how best to incorporate social media into their marketing mix, but for many companies, this is still in a test-and-learn stage.
“It is important to strike the right balance between leveraging social media to create buzz and awareness for their products, but at the same time ensure the risk of negative buzz can be managed,” says Leng.
Another area of growing importance in the communications mix appears to be the rising importance of PR, with agencies specialising in this field not only managing a brand’s reputation but increasingly becoming involved in more complex and strategic elements. “Financial brands are definitely engaging more with the media, and being more strategic about it, as markets become more competitive and they need to differentiate themselves,” suggests Alastair Hetherington, partner at financial PR firm RLM Finsbury. “Specialist agencies are able to add value, helping companies manage complex multi-stakeholder communications in times of extreme pressure.”
It appears the global financial crisis has forced Asia’s financial brands to reassess their marcoms, and forge stronger bonds. Nevertheless, a percep-tion remains that more innovative and meaningful marketing is needed before brands can regain the trust of cynical and dubious consumers.
Other features in the 2011 Financial Report include:
Domestic banks have more local appeal
Insurance industry: bright prospects
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