In the past few days, HSBC's brand reputation has taken a savage hit. First, the financial-services giant was compelled to reduce charges on its services, faced with growing competition from fintech startups. Then, along with other banking giants, it was named in a recent investigation that alleged it allowed trillions of dollars of dirty money to be laundered. And, to compound its woes, the bank's stock reacted adversely to these developments, sending its share price into a tailspin, at one time diving to its lowest point since 1995.
These challenges only worsen a bad headache for HSBC. Already, the 155-year old company has struggled to maintain its brand equity—the firm's brand value dropped 19% in the latest BrandZ report, and in Campaign Asia-Pacific's Asia's Top 1000 Brands, its ranking is now down to 158, from 100 five years ago.
Besides its home market of Hong Kong (technically, HSBC is headquartered in London), the bank has struggled to build a truly global position for itself and isn't a topper in any other country in the top 1000 research. To give you a sense of how far it has fallen, when the Top 1000 launched in 2004, HSBC debuted at 33.
While HSBC has launched several initiatives to improve its brand's standing (see "'Great brands always provide hope': HSBC on the imperative behind its new HK brand campaign"), experts think it has been outgunned by nimbler competition. Across the region, in Hong Kong, Singapore and Malaysia, regulators have opened up digital banking licenses, allowing newer rivals to show off their tech edge and unsettle the old guard. With well-heeled global operators such as the $5.5 billion valued Revolut also launching in APAC, the storied bank has its task cut out.
To be sure, Suresh Balaji, the firm's regional head of marketing (also a member of Campaign Asia-Pacific's Power List of the region's 50 most influential marketers), has launched new platforms in markets such as Malaysia and Australia, launched Jade (a bespoke offering for high-net-worth customers in China, and has a hub of agency staffers who work with his team to more speedily launch digital solutions. He also catapulted the brand's life insurance business from an idea to pole position in Hong Kong.
However, are these innovations enough to arrest or begin to slow the slide of brand HSBC? We reached out to an assortment of brand and advertising voices to get their assessment of how hard this giant has been hit, the impact from these strikes and what the company could do to fix its brand.
There are two parts to the story: HSBC's share value and the consolidation of some of its services.
In our view, the current pressure on the HSBC share price is primarily due to a number of (very public) major macro issues, and not due to the challenges they face from new digi banks. It’s obviously important for HSBC to make sure they have a compelling and relevant retail offer, but it’s questionable how critical it is to their investors.
It’s also worth considering that the digital banks are yet to prove their path to profitability, while legacy banks like HSBC will continue to need to re-evaluate their service offerings to become leaner and more relevant post-Covid. By and large, the HSBC brand is very strong, and the bank has invested a great deal to earn its global reputation. So whilst all the above will affect the share price and indirectly impact the short-term perception of the brand, I don’t see there being significant long-term damage.
Founder and chief creative officer
In the past five years, HSBC has put a lot of focuses on brand-building. They had some good people behind the rebrand in 2018 along with big brand campaigns globally. Unfortunately, the real issues of the organisation go much deeper than cosmetics and above-the-line communications. The problems are at its core.
While HSBC is still a trusted household brand, many newcomers prescriptively target to ease consumers’ frustrations with big (slow) banks and win them over with modern promises. Consumers are more exposed to financial products now, so HSBC’s one-stop-banking model needs a rethink.
Innovation and transformation requires a bold vision, which usually comes with lots of resistance, testings and failures before any significant return. For corporations like HSBC, the real challenge is to set internal politics aside, and update its priorities and operations so that they can cater to modern consumers’ needs again. Before that, I’m afraid there’s no shortcut, and it’s not something a few great brand campaigns can fix.
A 'brand' is built through time, through an individual's thousands of experiences with a business. If HSBC can pivot and start to compete with digital banking it will go a long way to repair any short-term loss of equity.
Political upset is also an immense challenge for large businesses, as they must resonate with millions of individuals with hugely diverse views, while still fitting into the political and business landscape.
Large banks used to monopolise the banking landscape, but across the world this is now changing and big banks must now evolve to survive new competition. This is only a good thing for individuals and businesses.
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Brand Health Check: We assess and (if necessary) solicit suggested remedies