Could Do Better

Banking Technology, October 2005, by Sandra Roesch

In the latest BusinessWeek ranking of the top 100 most valuable global brands, UBS achieved a 16 per cent jump in brand value - one of the big winners for 2005. UBS’ continued ascent among the world’s most powerful brands demonstrates that strong brands are now a must-have in order to play in the global banking game. Yet the only other European bank in the top half of the list is HSBC. So how did those two get there while others are nowhere in sight?
Many European banks have not yet built, or are still in the process of building, a sizeable international retail business. While some have recently expanded to new markets most of them are still mainly national players.

And, many of them are still operating under multiple brands (HBOS has about 40 different brands), which not only confuses customers and spreads the marketing budget very thinly, but is often a sign of internal barriers to working as one firm. Those banks are probably not leveraging their customer base for cross-selling and may even be competing for the same customer with the same offering (for instance Barclays and Woolwich offer the same mortgage products to the same target customers).

Moreover, brand promise and clients’ actual experience with the bank often don’t match. Mass affluent customers at Deutsche Bank were soon disappointed when their up-graded brand didn’t result in a similar up-graded service. Shortly after the launch of their two brand strategies, Deutsche Bank 24 and Deutsche Bank were back to being one Deutsche Bank brand again.

Creating one brand with one promise - both UBS and HSBC moved to a unified brand, courageously letting go of long-standing brand names that had earned the trust of their clients and employees. UBS combined both names for a three-year transitional period (UBS PaineWebber, UBS Warburg), whereas HSBC rolled out the HSBC corporate design to all acquired banks first, making the later name change feel less radical. Both banks have invested heavily in building global awareness: UBS with its award-winning “You&Us”, HSBC with its global/local advertising campaign.

Brand changes are often dismissed as superficial initiatives purely relating to advertising and logos. For banks that have been through a series of rebranding programmes, cynicism is widespread. Yet, even cynics acknowledge that in the case of UBS and HSBC, the rebranding effort is far more important and represents a strategic move that is fundamental to their respective business strategies.

Integrating smart acquisitions to create a global business - UBS and HSBC went on a multi-year shopping spree in the late 90s. They integrated these businesses not by injecting their HQ-based senior management talent to run them but by creating global management teams. At UBS there are as many Brits and Americans as there are Swiss in the senior management ranks.

So who will be the next new entrant in BusinessWeek’s list? Most of UBS’ and HSBC’s competitors have already realised that if they don’t soon join the club of strong global financial services brands they risk becoming irrelevant.