The brand values of eight of the UK’s biggest banks declined last year — potentially due to neobanks

, Internet, Modernización de Empresas, Tarjetas y Pagos Electrónicos, Telecomunicaciones

The brands of eight of the largest banks in the UK — including HSBC and Barclays — declined by an average of 7% over the last year, adding up to a collective $2 billion in lost brand value, according to data from Kantar, which uses financial data and survey results to determine brand value, cited by Yahoo.Customer Numbers Of Select NeobanksNotably, NatWest was the only major bank studied to see an increase in brand value, rising 7% to $2 billion. The other banks’ losses were attributed to the rise of popular challenger banks like Monzo, Revolut, and Starling, as they’re biting into incumbents’ business.
The threat that neobanks pose to incumbents’ brand value likely stems from their success in managing their brands across banking channels:

  • Neobanks are physically recognizable. For example, Monzo’s coral-colored debit cards are easily recognized and highly visible, which can help keep the neobank in consumers’ minds when they see others using the card. And this tactic seems to be catching on across the banking sphere: American Express, for example, brought back a rose-gold edition of its American Express Gold Card in the US in June for customers that apply through a friend’s personal referral link, according to Business Insider.
  • Their banking tools are high-tech and intuitive. Successful neobanks excel at impressing with their online banking offerings and giving consumers features that offer them intuitive control over their finances; and they’re continuously boosting their suites of tools. For example, Monzo recently announced that it was beta testing a feature that lets consumers block their own spending at specific retailers. And neobank Starling added Cybersecurity startup CyberSmart and Digital Risk, an insurtech providing coverage for SMBs to its marketplace for businesses to expand the services it makes available to business account customers.
  • And challenger banks market themselves well. Earlier this year, both Monzo and N26 prepped major ad campaigns designed to accelerate growth beyond what word of mouth was providing. Both campaigns use minimalist, eye-catching imagery designed to draw attention and are located in high-traffic areas like the London Tube.

One step incumbent banks can take is to revamp their marketing strategies, but they should be careful in creating «edgy» campaigns that mirror neobanks’, which could incite customer backlash. Major banks have plenty of brand recognition, and there’s no doubt that they have the resources to design digital tools that care equal to or exceed those of their challenger rivals: Chase alone set aside $11.4 billion for IT initiatives in 2019, for example.
That leaves marketing as a channel where banks could improve, potentially by employing edgy strategies like those their neobank challengers employ. However, they should be careful not to take this too far, as neobanks have inadvertently brought backlash upon themselves by trying to stand out with their ad campaigns: For example, Revolut was called out on Twitter for «single-shaming» ahead of Valentine’s Day 2019 with an ad saying: «To the 12,750 people who ordered a single takeaway on Valentine’s Day — You ok, hun?» according to Yahoo.

Source: Business Insider Intellligence

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