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Does Product Branding Make Cents?

Establishing product differentiation in Banking

In an industry generally considered to be commodity driven, banks and financial institutions are seeking ways to create competitive distinction. One way has been through the branding of products and services that highlight key features most meaningful to their target audience. A classic example was when the ubiquitous automatic teller machine was recast into brands like AutoTellerCashpoint, and Versateller. These were attempts to create brand “ownership” as well as infuse personality into what was essentially the same service regardless of the bank.

Banks and other financial institutions have historically been very conservative and traditional in their approach to product and service branding. They have typically relied on the brand equity of the parent brand rather than creating product brands that might require significant investment support. This more traditional approach also resulted in product brands that were self descriptive and easy to understand: Bank of America – BankAmeriDeals®; Wells Fargo – Way2Save®; Citibank – Citi Thank You Points®; and Chase – Premier Platinum Checking. While there are advantages in being descriptive they do not necessarily make strong emotional connections nor do they have stand-alone brand stature if divorced from their parent brand.

Recent trends in financial product branding has been driven by on-line payment and money transfer services that has created unique and distinctive brands such as VenmoSkrillDwollaStripeDueand Zelle.

The big national and multi-national banks are following suite looking to create product brands that have been built around stronger perceptual signals intended to attract attention and engage with customers in a more memorable way. Last year Wells Fargo introduced Greenhouse by Wells Fargo touted as their new mobile bank experience to help their customers manage their money and plan for the future.

A bank account that doesn’t require overdraft fees or a trip to your local branch seems like a dream.”¹

JPMorgan Chase introduced FINN by Chase also an all-mobile bank offering for checking and savings accounts.

 

Your New All Mobile Bank. Do all your classic bank stuff, and use some shiny new tools to help you take control of your money.”

Marcus by Goldman Sachs® was launched shortly after Goldman Sachs acquired General Electric’s GE Capital Bank in 2016 to create an online lending service to provide unsecured personal consolidation loans.

 

Personal loans with no fees. Ever.”

FRANK by OCBC (Oversea-Chinese Banking Corporation) was launched to specially target a Gen-Y audience.

 

Home of Making Money and Sense. Life’s a blank canvas. And we’re here to help you make it awesome”

These are just some of the emerging brands arising out of the financial and banking industries that are positioning their offers to target and attract key target audience segments through feature and brand differentiation. Brands like Greenhouse, Finn, Marcus and Frank all seek to make strong emotional connections and engagements very specific to their audience as part of a growth in product and service segmentation among banks.

What’s common among these brands is the importance of brand linkage to their parent brand.

All of these brands are clearly connected to and endorsed by their parent. The product brand’s credibility is reinforced through its parent’s brand reputation and recognition. The parent brand, in turn, is amplified through product brands that reinforce perceptions of innovation and the associations of staying current with the rapid evolution of digital services. This is proving to be symbiotic relationship that leverages the power and tradition of legacy brands with products that are more relevant to millennial and younger audiences.

While these brand strategies are common among the national and multinational banks, Community Banks seem to be sticking to a much more straight forward approach. They are either relying on the strength of their local brand recognition or taking a very conservative approach to launching unique product and service brands. Among several of the top 20 performing Community banks of 2017² with assets under $1B, few were active in creating unique product brands. The top performing community bank, Metro Phoenix Bank has no sub-brands. The number 4 bank, Texas Republic Bank, took the more traditional approach of Star Checking, Gold Star Checking and Shooting Star Checking.

 
Top Performing Community Banks of Assets Under $1 Billion²

The only danger with brands like FINN by Chase or Greenhouse by Wells Fargo is whether they will be as relevant in 5 or 10 years from now or be perceived as part of an era gone by? Technology and the development of unique product and services are happening at such a rapid pace that brand relevance, at the product level, may be difficult to sustain.

Building brands for the future can’t be based on the present.

Committing to supporting a brand for the long term is equally as important as it is to invest in the creation of the brand in the first place. Product branding requires particular attention to: who is the product targeted to; what are the features and benefits; how distinctive is the product in the category; how does the product differ from other products in the parent brand portfolio; and what does the brand life expectancy look like.

At Diverge Branding we understand how important it is to carefully take into account all of the considerations that factor into a product and service line branding strategy. Each brand is an investment that requires the will and commitment to support it for a sustainable BrandLife.

1“Wells Fargo Debuts “Greenhouse” Digital Bank Accounts withoug Overdrafts”, TheStreet 2“Best Performing Community Banks of 2017”, S&P Global Market Intelligence.