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As of February of this year, 9 of the top 10 largest banks, in terms of assets (Bankers Almanac), globally lie outside of the US. Like in the US, most of the largest banks in the world also think the best way to convince consumers to use their banks is to also simply talk about what it means to be a bank. Many of the same marketing themes seen in US banking are present in global banks as well. Themes like "Passion to Perform" for Deutsch Bank, and Royal Bank of Scotland’s "Here for you." Even the mega Industrial and Commercial Bank of China (ICBC) message is "Integrity leads to prosperity." Though true, it is doubtful consumers would do business with a bank they believed lacked integrity. Many of the others talk about their size, strength, and reliability. HSBC, Japan Post Bank and the rest of the large global banks just recycle industry's pat messages. Again, messages such as these are simply redefinitions of what it is to be a bank. Barclays, the third largest bank in the world, has served up a real winner in touting its size as a reason to choose.

Over the past five years, there has been great turmoil in our financial markets. We saw the collapse of many financial institutions, the bursting of a housing bubble, and the worst recession since the Great Depression.

During this “Great Recession,” as some have called it, governments made some unprecedented moves to save financial institutions from their own troubled assets. Financial institutions from all stripes received government aid in an effort to prevent a complete meltdown of the financial markets. And throughout all of this, consumers got angry.

They got angry because banks had over-stepped their bounds in funding risky mortgages. They got angry because banks looked to Wall Street to package and sell these risky mortgages, often multiple times, severely over-leveraging them for the sake of investment gain. They got angry when they were told “free checking” wasn’t free anymore. And they were angry when the banks got millions of dollars from taxpayers who were hurting because of the bad decisions the banks had made, only to hear about obscene bonuses being paid to the very people who created the mess in the first place.

One would think that something might change.

As sad and surprising as this sounds, very little has changed, both in terms of consumer sentiment and behavior, and in the position and posture of financial institutions – at least among the ones that did not shut down or get acquired by a larger bank.

Consumers, for the most part, have stayed with the bank they know versus a bank they are not familiar with as banks continue the monotonous droning of marketing all the features that, in reality, are market descriptions, or table stakes, of what it means to be a bank.

Banks: 2008 vs. 2011

                                   
Consolidation played a big role in reshuffling the deposit assets of some of the top 30 banks. Wells Fargo took over Wachovia, Washington Mutual came to represent all that was wrong with banking, and Bank of America and JPMorgan Chase seemed to ride out the storm under the cover of market leadership. Let’s take a look at the market-leading Bank of America, JPMorgan Chase and Wells Fargo.

Bank of America

Though Bank of America has done little in the way of changing its messaging, it has remained consistent throughout the duration of the financial crisis. Being the market leader, the consistency of staying on message about being the “Bank of Opportunity” is a decent defensive strategy. Unemotional and overly clever, especially in light of the economic tsunami, “Bank of Opportunity” remains a testament to what Bank of America thinks it is rather than being about those who should choose them.

In nearly all cases, it could be argued that the more vanilla a brand is, the less weight it can carry. However, in Bank of America’s case, it was only concerned with weathering the economic storm. Changing from an extremely vanilla, widely accepted, and completely non-offensive “slogan” to something that was unproven and unknown represented a risk for B of A. Why would the market leader want to draw attention to itself in an environment where there was such anger towards the industry? It wouldn’t and Bank of America’s quick reversal of its $5 fee for debit cards proves this.

As we teeter on the verge of climbing out of this collapse, it would make the most sense for Bank of America to remain on message, not because it resonates with customers, but because no competitor is challenging it in a way that makes Bank of America’s existing customers want to switch. Bank of America weathered the storm as the “Bank of Opportunity. Why should it change now?

Going past their main theme, Bank of America beats the industry drum of many ATMs and convenience, online accessibility and cash back rewards. With the largest investment in outdoor advertising, with more than twice the number of brick and mortar locations as its next competitor, coupled with its market leadership position, Bank of America is behaving like a market leader should – protecting its existing customer base while making sure everyone knows that you can’t go wrong choosing the market leader.

JP Morgan Chase

Chase too has remained on theme with its slogan, “Chase What Matters.” Where Bank of America’s thematic approach has been to create a universal “middle America” kind of appeal, JPMorgan Chase tends to be more urban and a bit more upscale.  However, “Chase What Matters,” given that the bank’s name is Chase, has always seemed overly clever and thus insincere.

Chase at least attempts to create a message that is a reflection of those they wish to influence but falls woefully short on dialing in the emotional intensity of its prospects. The cleverness removes the intensity of a consumer being able to “go after what matters most to them” and does little to incite a competitor’s customer to consider switching to it.

However, much like Bank of America, Chase viewed its options during the financial crisis as limited and opted keep its message consistent rather than risk unnecessary exposure and risk. Furthermore, in typical market leader fashion, it continues to reinforce the idea of chasing what matters through the promise of convenience, online tools, cash back cards, and ATMs.

Wells Fargo

While Bank of America and JPMorgan Chase have lead the consumer banking industry, Wells Fargo’s acquisition of Wachovia displaced JPMorgan Chase as the country’s #2 bank in terms of deposits.

Over the past few years, the focus of Wells Fargo has clearly been on the conversion and integration of Wachovia. The vast majority of advertising dollars has been spent both in educating consumers and the promotion of Wachovia branches becoming Wells Fargo branches. To do a conversion of this size is admittedly not an easy task. And like Bank of America and JPMorgan Chase, Wells Fargo opted to keep a consistent message throughout.

Much like JPMorgan Chase, however, the advertising theme line of “Together We’ll Go Far “seems a bit too clever, especially in light of the Wachovia acquisition. While Wells Fargo has used this position for several years, it misses the connection completely with consumers. This is especially true when you consider that the vast majority of the advertising over the past few years has been centered on letting people know that Wachovia is becoming Wells Fargo. And as most of the advertising has been done on the local level, the theme line seems even more out of place.

If, however, Wells Fargo were not in a lengthy conversion process, the themeline would not seem as clever and have more merit and likely resonance with the target audience especially when compared to JPMorgan Chase. Even still, it is too reflective of Wells Fargo as a company and not of those they wish to influence.

Important Movers

While there has been a continuation of the status quo throughout much of the consumer-banking segment, with most of the players shuffling around only a bit, there are two notable exceptions that have forged ahead and substantially grown their businesses – Ally Financial and USAA Federal Savings Bank. Though the reasons they have been successful may be different, they both demonstrate the power a financial services brand can have in the marketplace.

Ally Financial

In 2008, GMAC Bank came into existence as a conglomeration of automotive and mortgage finance companies and products that had been mostly held by General Motors. Perhaps as a way to shield its financial assets from consumer wrath or a benefit of impeccable timing, GMAC Bank became Ally Bank a year later in 2009 and then Ally Financial in 2010.

What is both remarkable and surprising about Ally is how well it seemed to insulate itself from the general negativity that was present in the market place both around TARP and the US Government bail out of the automotive industry. Where most banks were only under the fire for TARP, Ally was in the thick of both TARP and the bailout of the automakers. It seemed like it should have been getting it from all sides. But, astonishingly, it survived and prospered, making it in to the top 30 financial institutions in 2011. So what happened?

Ally quickly recognized and adapted to the anger that was going on in the banking industry and aligned itself with it for its benefit. Incidentally, that is one of the reasons Ally “Bank” became Ally Financial. Ally saw the writing on the wall – consumers were fed up with banks – and, more importantly, saw an opportunity to grab share, any way it could.

In 2009, Ally used the theme of “Straight Forward.” Its ads and messages highlighted some of the more ridiculous bank practices and let people know there was a new bank that did things right simply because, “its just the right thing to do.”

Because Ally had basically no brick and mortar branches, it could advertise like crazy, offer slightly better rates and employ some aggressive and programs to help grow its fledgling consumer deposit business. These early ads did a great job of portraying “banks” as inflexible and maniacal, tapping into the pent up emotion the rest of the market was ignoring. It was the elephant in the room and only Ally addressed, all the while being a bank itself.

Further, it positioned itself as a real alternative to the big banks not only in its messaging but in its color pallette as well.

Quite unlike the big three that have already been discussed, Ally opted to not only change its name, but also its advertising slogan as well recently. It rolled out “No Nonsense. People Sense,” promising you will be able to talk to a live person no matter what time of day you call.

Again, that fed into an anger we all feel about dialing a number and going through telephone automation hell to get to talk to someone. A recent visit to the Ally Financial website showed a phone number with a “call wait time of 0 minutes.”

Clearly its message has resonated with consumers. Its strategy has been to be the “anti-bank bank” and it has reflected it well in its messaging.

However, messaging alone does not drive business. Not only has its messaging been able to attract consumers, Ally Financial has been paying off what it promises in its operations. Its customer satisfaction ratings have been very good and it continues to grow deposit share.

USAA Federal Savings Bank

Ally Financial has grown via a direct assault on the banking industry as a whole, positioning itself as a clear alternative to a traditional bank. What USAA Federal Savings Bank has done is brought precise focus to its customers, both current and potential.

Though it may seem a little counter intuitive, the best brands in the world are not meant for everyone, as a single enterprise cannot be all things to all people. If you are for everyone, you are in fact really for no one. World-class brands understand this and tell those they wish to influence that they are ONLY for them.

Not quite a bank, USAA call its customers “members.” Not quite a credit union (it does have a limited field of membership), USAA occupies a very unique position in consumer banking – it is only for active duty or honorably discharged US military personnel.

It could be argued that USAA sacrifices a “traditional” brand message if one considers MESSAGE only. However, USAA’s brand is not in its message. It is in its singular focus to a single customer. Its messaging comes out of that.

What is interesting and demonstrative of the singular focus of the USAA brand is that, to most people who have no association with our brave men and women of the US military, seeing a USAA ad or being exposed to the brand does not mean anything to them nor do they notice. However, if you are active duty or discharged military or you have a family member who is, you notice the USAA message and its brand. Not only do you notice it but actually take time to digest it.

The Banking Industry’s Non Message

For the vast majority of players in the banking industry, there is a single “macro” message. In conventional speaking terms, it would loosely be translated as “Yes, We Have That.” What we mean here is that the fall back message for nearly all banks, including the market movers and leaders, tends to deal with simple functionality of a generic bank.

At Stealing Share, we call these kinds of messages “table stakes” as they are the bare minimum one needs to “sit” at the banking industry table.

Typical bank messaging is filled with ideas like being most convenient, having friendly people, providing cash back reward cards, being here to help you and having good service. First off, are these not all descriptions of a modern bank? Secondly, the inertia of the status quo, or doing nothing, is much too great of a force in retail banking to be overcome by an undifferentiated message. Let’s face it. Switching banks is not an easy or quick process. It takes a real commitment by the one choosing to switch. Promising something that the consumer already believes it has or can be done better in and of itself does not incite a switching behavior.

This is even truer in the retail banking industry than others. What the financial crisis and the resulting anger against banks shows us all is that, even when consumers are fed up and angry, they have not been given a reason to switch. So they don’t.

Granted, some do. But, as the market share data shows us, most stay with the “devil” they know. Although other banks promise the best service and all those other table stakes, most of us dismiss them or ignore them entirely because their messages are not based on a deep seeded, emotionally intensive, and most importantly, switching inducing belief.

What is so remarkable is how similar the ads are from one bank to another:

In looking at these ads, there is something that is really striking. It is almost as though banks are positioning themselves to attract consumers who have NEVER had a bank before. It is almost like they are trying to educate consumers on the reasons they should choose a bank: You need a bank for online access of your money. You need a bank to give you a loan to buy a car. You need a bank where the people don’t anger you when and if you go inside. You need a bank so that you can have a place to deposit your paycheck and pay your bills.
Don’t most people who already use a bank, use it for those reasons? The ads, offerings, and messaging is so similar from one bank to the next that they provide absolutely no reason to choose. It’s the single biggest reason why most of us stay.

As research suggests, most people choose a bank based upon its location. Since Bank of America has the most locations, it is easy to see why it is the market leader as few have given consumers any other reason to choose.

Which brings us to credit unions.

A Missed Opportunity

Throughout the duration of the financial crisis, the anger and angst toward traditional banks was at an all time high. It is not a stretch to say that people HATED their bank, even it was not front and center in the news or the recipient of millions of federal bail out money.

For credit unions, there was a real opportunity to change the retail banking landscape. They had a moment in time to redefine who they were, what place they occupied in the industry, and, most importantly who they were for. Not being a traditional bank by definition, they needed to grasp this opportunity and aggressively position themselves directly against banks and, like Ally, present themselves as a true alternative the status quo.

Unfortunately for them, most did none of that.   

Granted, there were some who tried and some of those had measurable and sustained growth that continues today. But as a whole, credit unions missed a golden opportunity.

Credit unions believe themselves to be a very collegial group. Speaking from experience, they tend to operate, at least outwardly, like they are all in it together and that the moniker of credit union has some sort of innate value that somehow suspends what the general public’s real perception of what a credit union is.

Unfortunately, for most consumers, when they think of credit unions, this is what they think of:

And this is no where near the worst of the worst. This ad, in terms of production, is one of the better ones, but the message is all about happy people banking at a credit union because the people are all so nice - as if to say you will actually be a happier person if you use the this credit union.

This is not to say that all credit unions are like this. There are a great many credit unions that are more upscale and really no different in operation or appearance than what most of us think of when we think of a bank. The problem is that research shows that people associate credit unions with the lowest common denominator in the category. So, unless you are already a member of a credit union, the ad above is what most think they all are.

For credit unions, their problem is really two fold. Not only do they have to try to change the perception of what a credit union means, they also do not want to bad mouth the least of their brethren. To hear a credit union association talk, you would think that the only competition they have is against the banks, when in fact, most executives at the largest credit unions (the credit unions with the most money to spend on advertising) know it is both banks and all the other credit unions.

This is why there has been a movement with many credit unions over the last few years to drop “credit union” at the end of their names and opening up their charter to a wider customer base. Because the largest credit unions can spend money and know that they actually compete with both banks and other credit unions, they do not invest in changing the image of credit unions as a whole. To these credit unions, it would be like filling up your friend’s car with gas for him to take you a block down the street. Sure you wouldn’t have to walk the block, but your friend could drive anywhere they wanted on your dime.

There’s also one other problem with credit unions. Their tone. Few of them, if any, tapped into the anger that exists in the market and, instead, trotted out the happy imagery and non-threatening marketing they always have. Emotionally, most credit unions are duds and it’s one of the reasons why few take them seriously.

That was the missed opportunity. You had people marching through the streets to “occupy” and credit unions, in the best position to align themselves with those emotions, stayed passive.

An International Perspective

As of February of this year, 9 of the top 10 largest banks, in terms of assets (Bankers Almanac), globally lie outside of the US. Like in the US, most of the largest banks in the world also think the best way to convince consumers to use their banks is to also simply talk about what it means to be a bank.

Many of the same marketing themes seen in US banking are present in global banks as well. Themes like "Passion to Perform" for Deutsch Bank, and Royal Bank of Scotland’s "Here for you." Even the mega Industrial and Commercial Bank of China (ICBC) message is "Integrity leads to prosperity." Though true, it is doubtful consumers would do business with a bank they believed lacked integrity. Many of the others talk about their size, strength, and reliability. HSBC, Japan Post Bank and the rest of the large global banks just recycle industry's pat messages. Again, messages such as these are simply redefinitions of what it is to be a bank.

Barclays, the third largest bank in the world, has served up a real winner in touting its size as a reason to choose.

In a time of global economic uncertainty, "big" may mean safe to some. Safety is still a table stake of what it is to be a bank. In the UK, where the pound is still strong relative to the Euro, being large only means that consumers have access to their money, like the “many ATMs” messaging in the US. To the local Barclay's customer, being big is meaningless.

BNP Paribas, the largest bank in the world in terms of assets, like many others touts its size. However, they have used their size to claim that they are the "Bank for the changing world." Although still rather unemotional, it does attempt to differentiate itself as being a bank of the world, one of the only banks to claim this position.

Credit Agricole, the 5th largest bank in the world in terms of assets, has recognized that bank messaging worldwide has become a rehash of tired and worn out ideas and themes. So, it has introduced "Green Banking."

This is interesting on two fronts. First, it assumes that being "green" is the highest emotional intensity in choosing a bank. Europe is much "greener" than the US, but it is clearly not an emotional driver in choosing a bank. Secondly, in this particular ad and much of the description in their materials, Agricole does not go into a lot of detail as to exactly what "green banking" is. Rather, Sean Connery's few words, "Back to common sense, it’s time for green banking" is vague at best and provides no real reason to switch.

But that is nothing new for a bank.

Moving Forward

One of the things that is infuriating is that banks are perfectly content to “keep on keeping on.” There are offices full of smart and creative people and it seems almost impossible that they all are saying, “Wow, our brand messaging is really, really good and it shows us in sharp contrast with our competition because of our brand promise.” Nearly all of their messaging is so vanilla and forgetful, it is almost like they really are satisfied to not rock the boat or stick out.

Or, it may just be that most of the large financial retail banks are afraid of having to stand for something. Perhaps they are afraid of being held to a standard higher than Wall Street without considering that they are not mutually exclusive. Having a brand takes courage, fortitude, and consistency.

The banks have proven they can do the latter. The ones that will win, and grow their market share over the next five years, will have to demonstrate they can do the first two as well.