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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 69th place. 

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

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

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

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

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

Rebuilding Trust in
Troubling Times

By Carola Jain and
Mike Rocha

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

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.

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

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


#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.




About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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