Financial brands falling (again)

Interbrand published their Global Top Brands report yesterday, which makes for interesting reading.

The world’s most valuable brand is still Coca-Cola, followed closely by Apple and IBM.

Tech firms feature heavily in the list, with Google and Microsoft in fourth and fifth place, Intel in eighth and Samsung in ninth and Oracle, in eighteenth place, is one of the fastest risers.

Even Facebook, that seven-year-old upstart, gets in on the act in 69^th place. 

Meantime, the financial brands take a big hit with Barclays and UBS disappearing from the Top 100 (they were 79^th and 94^th most valuable brands last year), and many others losing traction.

American Express is the top financial brand in 24^th place, 23^rd last year.

JPMorgan comes in at a respectable 32^nd, although that’s four down from last year’s 28^th.

And most others see a big drop, particularly Credit Suisse (95^th this year, down from 82^nd last year).

Here’s the sector review and individual brand reviews from this year’s report, and you can download last year’s complete report if you want a comparison.

Rebuilding Trust in Troubling Times

By Carola Jain and Mike Rocha

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The financial services industry has been through an incredibly turbulent period since the 2008 financial meltdown, and as banks continue to lurch from crisis to crisis, the adversity shows no sign of letting up anytime soon.

In the past year alone, UBS had a € 2 billion Delta One problem; MF Global went bankrupt and lost over $1 billion USD of clients’ money; JPMorgan Chase & Co reported a $4.4 billion trading loss in its chief investment office; and Barclays is the first of a number of banks to be tainted by the evolving Libor scandal.

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Libor, according to MIT Professor of Finance, Andrew Lo, “dwarfs by orders of magnitude any financial scam in the history of markets.” Regulators in at least seven countries are investigating the rigging of the Libor and other interest rates, and around 20 major banks have been named in investigations and court cases. This still-unfolding story that has revealed decades of abuse, has financial experts calling for an overhaul of how the rate is set.

The old growth tricks of consolidation are hardly defensible given the general notion that large banks are not only “too big to fail” but also “too big to manage.” The Libor scandal, in particular, has intensified pressure on Wall Street to enact reform. Aside from potentially costing banks tens of billions of dollars in penalties and legal settlements, the scandal is further damaging the banking industry’s already battered image. Analysts worry that it is eroding the faith of investors and consumers whose confidence in Wall Street has been shaken by continual scandals and unsettling stock market losses.

The failure of the industry to put its own house in order means that politicians and regulators will be more inclined to step in. In the short- to medium-term, ongoing regulatory change — of which we have likely only seen the beginning — is redefining the environment within which financial brands can operate. Financial institutions’ capacity to generate returns above the cost of equity is already under extreme pressure, so business strategies and models will have to evolve rapidly — and brand strategies will need to evolve with them.

With stock prices sliding and investors’ interest waning, uncertainty weighs heavily on the sector, but the picture may not be as bleak as it seems. The demand for financial services remains strong; wealth is being generated in commodity countries; emerging markets and pension funds continue to grow.

Another reason for cautious optimism is that corporate customers have broadly stood by their banks. However, it must be pointed out that this loyalty is partly due to the absence of an industry leader that might clearly show a differentiated strategy. While clients overall are continuing to demand more transparency and accountability, on the B2B side at least, it seems that the majority see safety in size and will continue partnering with global players.

Reassuring and connecting with consumers

From a consumer point of view, trust is at an all-time low, and willingness to consider alternative providers at an all-time high. This is creating significant opportunities for new entrants, particularly trusted brands from other sectors. We expect this trend to continue and accelerate, improving choice and increasing the role of brand as competition intensifies.

The ongoing digital revolution is also facilitating change in the industry, empowering consumers, expanding their consideration sets, and enabling greater opportunities to compare value. A sense of more options and more personal control over choices, coupled with the above-mentioned trust deficit, is also speeding a trend toward declining loyalty and less inertia. Consumers are increasingly willing to make a switch, creating further opportunities for new market entrants.

Financial services has been slower than most industries to embrace the transformational potential of digital. Outside of financial services, consumers are coming to expect personalized customer experiences due to their experiences with retailers like Apple and Amazon, which have raised the digital bar. Consumers increasingly expect a rich and engaging experience from all of the brands of their life, including their financial service providers, with content that is tailored to their profiles and individual financial needs. As this demand grows, financial services brands will need to develop tools that can mine data to build more personal, relevant customer profiles at higher levels of sophistication than today. In addition, this experience will need to be deployed across all of the increasing number of channels and touchpoints.

Opportunities around the world

Emerging market growth is another global trend that will continue to provide huge opportunities for financial brands over the next ten years. Opportunities exist at each level of an emerging market society. Through increased penetration of the unbanked, financial services organizations can offer a wider range of increasingly sophisticated products and services to the growing middle classes, as well as through private banking to the growing number of wealthy entrepreneurs.

Western brands can’t simply assume they will be able to effortlessly expand into these new markets, as they will face regulatory restrictions and growing competition from emerging market-based international groups, possibly even becoming targets for acquisition themselves. While there is concern about the size of banks in Western markets, in emerging markets the race for consolidation continues, with many players seeking initially to become regional powers. We have no doubt that, in time, emerging-market financial brands will break into the Best Global Brands’ top 100.

In the next year, we expect that most financial services institutions will be primarily focused on restructuring, grappling with regulation, and on the constant hunt for revenue. Banks will be looking for new revenue sources, as will governments that are introducing new taxes that could impact corporate customers and consumers alike.

Though it doesn’t necessarily make the path forward easier, it helps to remember that times of great change — and great challenge — are also times of great opportunity. The power of brands during such turbulent times is their ability to act as the central organizing principle for their businesses, establishing clear values and principles which can guide future strategies and behaviors internally, and, over time, influence external perceptions.

For consumer banks, nothing is more important right now than rebuilding trust. To accomplish that, financial companies will need to clearly define what their brands stand for, and communicate those values in a way that is relevant and credible. It will also be necessary to involve managers and employees in a process of engagement, executing communication consistently across all touchpoints and creating metrics to galvanize management, manage performance, and monitor progress. The point is to use all the tools at your disposal, including new digital tools, to make meaningful connections with consumers that can be nurtured over time.

 

#24 American Express (#23, 2011)

American Express has spent the past year launching a host of enhanced online services designed to improve customer experience, simplify account management and provide members with personalized offers from its favorite merchants via social media platforms. Customers could not be more satisfied, which is why American Express has ranked as the top US credit card company in customer service by J.D. Power and Associates since 2007. Offering various types of charge cards for small businesses to manage their expenses, and currently the largest provider of corporate cards, American Express has launched the Open Forum to provide additional support for this key market segment. A virtual space for small business owners to make connections and share insights, American Express Open Works provides small businesses with the knowledge they need to power their own success. The site offer numerous resources and educational tools for members, which keeps the community active and engaged, and solidifies American Express’ role as not just a credit card company, but also an advisor, a friend, and the beneficent presider over a vast tribe of small businesses. Promoting events like the Big Break contest, which awards the lucky winners USD $25,000 to implement marketing makeovers; and Small Business Saturday, which helps drive sales to small businesses on one of the busiest holiday shopping weekends of the year, American Express shows, through so many offerings and gestures, that it is committed to supporting small businesses. Clearly a leader in digital and social media marketing, American Express none the less needs to work to ensure that its multiple online platforms, seeming a bit like islands unto themselves, are more coordinated, connected, and easy to access.

 

#32     J.P. Morgan (#28, 2011)

J.P. Morgan reached a peak this year, being ranked the number one bank by assets in the US by the National Information Center — and then, swiftly fell from grace. Just months after earning this honor, the bank’s tolerance for risk led to what its CEO, Jamie Dimon, called “significant losses” from a portfolio of credit investments. Initially thought to total USD $2 billion, these losses could reach over USD $7 billion. To make matters worse, J.P. Morgan recently revealed that its traders may have intentionally tried to hide the full extent of the historic losses. Federal regulators in the US are now looking into whether J.P. Morgan’s employees intended to defraud investors. The fallout from these events has severely undercut Mr. Dimon’s sterling reputation and credibility — and this would mean death for most brands. But J.P. Morgan is not most brands. In fact, the bank reported a second-quarter profit of $5 billion. While it continues to be resilient, the banking giant cannot afford to ignore its image. Creating a powerful brand is something J.P. Morgan has invested in for years. The bank recently hired Bank of America veteran, Claire Huang, as its new CMO and, for the time being, such investments in managing its brand seem to be paying off. J.P. Morgan continues to perform well with existing consumers and shareholders. However, if the firm hopes to retain the confidence and respect of potential clients and investors, it will need to instill and project a more trustworthy culture that better guards its legendary returns.

 

#33     HSBC (#32, 2011)

For HSBC, the multinational banking and financial services organization, it’s been a year of change underpinned by a shift in global brand strategy and internal restructuring. In an effort to consolidate in underperforming markets, HSBC is concentrating its presence in growth markets and businesses where wealth is being created. This accompanied the retirement of the “World’s Local Bank” strategy and the introduction of a new tagline: “HSBC helps you unlock the world’s potential.” In 2011, HSBC was one of the first banks to receive initial approval to underwrite corporate debt in China, giving the brand a significant head start in the world’s fastest growing market. After seeming to avoid the worst of the financial crises, HSBC is now caught up by the compliance irregularities affecting many of its competitors. It remains to be seen how HSBC will emerge from allegations of laundering funds and the Libor investigations — both of which, at a minimum, could result in costly fines and tightened controls.

 

#44     Thomson Reuters (#37, 2011)

Thomson Reuters continues to successfully align its brand and business strategies, but, the brand has faced significant hurdles over the past year. Under volatile market conditions, rival Bloomberg thrived while Thomson Reuters lost market share. Specifically, Thomson Reuters Eikon, the flagship product of the Financial & Risk business, struggled to gain traction with customers. Its performance contributed to a revamped organizational structure, including the installation of CEO James C. Smith. Although the new management team has already refocused the company on its core competencies, the brand’s lack of communication to the market regarding these changes (and in response to negative press) has influenced customer confidence. Thomson Reuters, however, remains invested in building a well-organized and aligned portfolio across diverse business areas. What’s more, offerings in some of the brand’s key businesses, such as Legal and Tax & Accounting, lead their respective markets. Looking ahead, Thomson Reuters has an opportunity to assert influence and leadership through its ongoing commitment to corporate citizenship and its “customer first” initiative — both within its Financial & Risk business and across the organization.

 

#48     Goldman Sachs (#38, 2011)

Over the past year, Goldman Sachs has experienced negative sentiment from both inside the financial community (in the form of analyst downgrades), and outside (Occupy Wall Street), and even within the company (Greg Smith’s “Why I Am Leaving Goldman Sachs” letter in The New York Times). Smith’s scathing missive struck such a chord that Goldman Sachs experienced a USD $2.15 billion loss in valuation in a single day. Furthermore, the firm’s cost-cutting maneuvers, in the form of layoffs, and accusations regarding betting against clients, seem to be at odds with its core client service values of “integrity, fair dealing, transparency, professional excellence, confidentiality, clarity, and respect.” In response to the controversy that has unfolded since 2008, Goldman Sachs continues to push its corporate citizenship efforts closer to the forefront and emphasizes a renewed commitment to transparency, risk management, accountability, and rigorous measurement of results. Though the firm appears to be committed to becoming a better institution, questions regarding the authenticity of its efforts continue to dampen their effect. Despite the negative press it has received, Goldman Sachs continues to meet its customer needs. Now, the firm must manage its reputation carefully to avoid further damage and restore its former luster.

 

#50     Citi (#42, 2011)

Reaching its 200th year, Citi has showed renewed commitment to its brand. The anniversary celebrations began when Citi reconnected to its heritage through a global campaign highlighting the innovation it has brought to the banking industry over the years. Its first-ever Olympic sponsorship has engaged audiences on traditional channels as well as online. In an effort to improve customers’ brand experience, Citi has delivered a more integrated online presence across platforms, including new.citi.com, improved online banking functions, as well as new products and popular mobile apps. In Asia, Citi is reinventing the retail banking environment with Citi Media Walls. These large, multi-screen LCD systems display financial data and news in real time along with information on Citibank products and services. They are strategically placed in places like Shanghai’s People’s Square and Singapore’s Orchard Road, where they are seen by millions of consumers each day. Citi is banking on consumers’ desire for real world brand experiences that confirm the choices they make. However, with the TARP blunder and 2008 bonuses scandal still in recent memory, and recent indicators that Citi’s culture has not changed — like failing the Fed’s stress test for trustworthiness and safety of investment, as well as new controversy over executive compensation packages — it seems there is a disconnect between Citi’s behavior and its image-repair efforts. To regain its reputation for leadership and responsible finance, Citi must bring its financial performance and image into alignment and begin prioritizing image-building behaviors over business as usual.

 

#54     Morgan Stanley (#54, 2011)

Morgan Stanley holds tight at #54 for a second year in a row. Market share and profits alike were up this year, but what people will remember about Morgan Stanley in 2012 is their handling of Facebook’s IPO. Worldwide expectations built for over a year, which proved difficult to manage amid rampant speculation. Stock was primed to soar at USD $40 – 50 a share as the date neared. After it debuted at USD $38 a share, Morgan Stanley had to intervene and help stabilize the price by close of market that day. Competitors in the banking and investment industry contend that the American financial services giant mismanaged the IPO, setting the price of stock too high and selling too many shares to the public. A wave of lawsuits has followed, as well as increased scrutiny at the IPO process and adherence to regulations. The controversy will likely impact the brand’s strength in the marketplace, and its dominance as lead banker of tech IPOs in particular, but it will be difficult to measure for quite some time.

 

#58     AXA (#53, 2011)

2012 was another year of solid earnings for the French global insurance conglomerate. The company marched forward with its goals in corporate citizenship by joining 26 other insurance companies in signing the Principles for Sustainable Insurance. This move solidifies AXA’s broader corporate responsibility strategy, reinforcing the brand’s image as a trustworthy and sustainable brand. On Facebook, AXA is a success, with approximately half a million friends after just one year. The brand was further enhanced by the reorganization of its advertising strategy, which aimed to create more consistency and best practice sharing across all of its markets. In America, AXA’s global theme “Redefining Standards” has replaced the iconic AXA Gorilla that has been reminding audiences that it is never too early to think about retirement. In his last campaign, the AXA Gorilla had saved enough money to retire and was accepting viewer suggestions as to where he should live out his golden years. The retirement of AXA Equitable’s mascot and the adoption of its global positioning will bring the US operation’s image and messaging into closer alignment with the global AXA brand. A cohesive global identity and deeper commitment to sustainability goals puts AXA in an excellent position to “redefine standards.”

 

#62     Allianz (#67, 2011)

Allianz, the German multinational financial services company with its core business in insurance, survived Greece’s debt crisis admirably. Though revenues declined and net income was heavily impacted by market turmoil, an operating profit within the expected range demonstrates Allianz’s fundamental strength as a business. A decrease in 2012 claims also helped, but part of Allianz’s resilience can also be attributed to its brand. Positioning itself as a “trusted partner,” Allianz has a strong customer focus and skillfully uses technology to connect with consumers and improve customer service. Continuing its mission to become fully digitized, Allianz has offered its annual report as an interactive iPad app and has implemented high-tech solutions that make the “design, quote, obtain” process easier for customers. Having succeeded in putting a human face on its brand, most notably through the global “One” campaign, Allianz now has a unified brand that leverages cost synergies, enhances its global presence, and supports a consistent global brand experience.

 

#74     Visa (#75, 2011)

Aiming to bring the digital currency marketplace to new heights, Visa is working to help users around the world leave the inconvenience of checks and the risks of cash behind. Through its “Currency of Progress” mission, Visa is looking to make digital currency the new norm. The brand continues to develop technologies for its online and mobile platforms, most recently showcased at the 2012 Olympic Games in London, where the brand was a main sponsor. Unfortunately, the sponsorship was blemished when credit card systems failed during peak events. Due to Visa’s agreement with the International Olympic Committee, there was no fallback to another card provider or merchant system, which meant fans were unable to make purchases — and had only Visa to blame. The brand faced another challenge this year when one of its service providers experienced a security breach that put over a million consumers at risk for identify theft. Visa turned the incident into proof of its commitment to customers, immediately removing the provider from its list of approved vendors. Despite these mishaps, Visa’s heavy media campaign during the Olympics and other major sporting events have helped the brand maintain a positive presence in the minds of consumers. Looking forward, Visa may have difficulties if it continues to neglect a clear and appropriate articulation of its brand promise and benefit to consumers.

 

#76     Santander (#68, 2011)

Over the past two decades, Santander has emerged as one of Europe’s largest banks and was named the 2012 best retail bank in the world by Euromoney. Santander has demonstrated a commitment to increasing its level of customer satisfaction by developing a special program for managing customer concerns. The program ensures quick resolution of complaints by channeling them to specialized units that keep the customer informed of progress where identifying the main causes of common customer complaints so steps can be taken to correct them. Although it is feeling the pain of both a slow-to-recover US economy and the European debt crisis, the bank’s investments in South America have shielded Santander from feeling the effects as much as its peers. Santander, however, is not totally immune — with significant losses over the first two quarters of 2012, Santander is one of 16 Spanish banks that had their credit worthiness downgraded by Moody’s Investors Service. The brand’s reputation also took a hit from high-profile legal investigations involving two of its most senior executives. This all comes as Santander is introducing US consumers to its global brand following its acquisition of Sovereign Bank. Santander plans to drop the Sovereign name early next year and has been careful to demonstrate its commitment to the US by continuing to invest in new technology and advertising for its US operations. Santander has been a solid, growing brand for decades, and has emerged as one of the world’s biggest banks. But the European debt crisis and the brand’s close association with Spain will make it difficult for Santander to continue its winning streak.

 

#94     MasterCard (not listed, 2011)

MasterCard makes its debut in our Best Global Brands report after an impressive year. The company’s leadership in mobile payment via MasterCard PayPass, the launch of its “Priceless Cities” customer benefits program, and a growing suite of solutions for business owners are steadily increasing consumer satisfaction. MasterCard gained market share from Visa over the past year in spending volume, new bank tie-ups (notably SunTrust and Sovereign in the US) and new card users. The brand’s “Priceless” tagline and accompanying slogan have resonated and succeeded in building emotional connections between MasterCard and consumers over time. Now reaping more of the benefits of those connections, MasterCard needs to continue delivering meaningful results. Despite a positive year overall, a third party data breach exposed the account information of millions of customers. As one of the world’s largest payment processors, MasterCard must work diligently to ensure its customers’ information is protected and that their experiences with the brand remain positive.

 

#95     Credit Suisse (#82, 2011)

This year, Credit Suisse launched a bold advertising campaign, aimed at positioning the firm as a luxury brand. It replaced its Roger Federer “Relaxed” with “The Roger Federer World Tour 2012” — and not a moment too soon. “Relaxed” may not be the right vibe for a global banking leader at this particular moment in history. Like other banks, Credit Suisse has been buffeted by the effects of a slow-starting US economy, the European debt crisis, and many unknowns in Asia. The brand’s new financial reality — declines in both revenue and margins — has led to cuts in global headcount and the Swiss National Bank’s recommendation to ‘’significantly expand its loss-absorbing capital during the current year.’’ Considering the challenges, the bank’s ability to hold steady is impressive. The brand has retained relevance through its continued transition to a more client-focused model, a critical move given the upheaval within its sector. This model extends to the brand’s corporate citizenship effort, use of social media channels and a multi-year talent and cultural-building effort. The hard work has paid off. This year, Credit Suisse stands as the lone representative of the Swiss banking tradition among the world’s brand elite.

 

 

 

Comments

[Christopher David Chairman the WDA /ADC]

Amex very top brand! Shows there are still a lot of gullible public possibly?