Financial Services: Moving Towards a New “New Normal”
By Carola Jain
As memories of 2008 recede, the financial services landscape is settling into a “new normal.” Maintaining margins in today’s financial marketplace requires more creativity than ever due to increased regulations and heightened public scrutiny. Only a handful of truly global players have had the scale and operational proficiency to navigate the choppy waters of the crisis and remain profitable, with brands like J.P. Morgan Chase and Goldman Sachs continuing to retain top talent and clients. Regional players, on the other hand, are scaling back to their core strengths and reprioritizing key markets that show a clear need for their specialized expertise.
Back to basics in the reset economy
As market players are refocusing their offerings to ensure that their financial performance meets investors’ expectations, each firm has to review how
to best position its brand in the reset marketplace. While many firms have reached out to investors declaring “rebuilding trust” as a primary goal moving forward, studies confirm that the industry as a whole may be well on its way. As of May 2013, the Chicago Booth/Kellogg School Financial Trust Index found Americans’ trust in the sector rose 13 percent since a year earlier. In order to continue strengthening relationships with key constituencies, financial services leaders must focus on clearly identifying their competitive advantages while ensuring transparency and consistency in their operations and interactions with stakeholders.
Scale back to grow smart
Efforts to drive profitability and create a clear positioning will require financial services brands to rethink previous aspirations of becoming financial supermarkets. As banks continue to retrench from unsuccessful foreign expansions and shed unprofitable units, they must do so with a clear understanding and articulation of their unique capabilities and differentiating value. On the Main Street banking side, this is perhaps even more pressing, as future competition may increasingly come from non-traditional financial services providers and retailers such as Sam’s Club or peer-to-peer lenders such as UpStart.
Embrace digital, learn from non-traditional brands
More agile social and digital startups necessitate new ways to stay relevant with target audiences. Whereas homogeneity currently defines the industry, financial services brand leaders must draw inspiration from outside of their category. Brands such as Nike and Amazon offer rich examples for brands looking to innovate around customers’ changing digital needs. Recent in-category successes such as Chase Quick Pay and Barclays Family Springboard illustrate how brands must tailor their efforts to meet customers’ mobile and geographic needs. Brands aiming solely for one-size-fits-all innovation will miss out on the storytelling and loyalty that more customized relevance can yield.
— Carola Jain (email@example.com) is Senior Director, Strategy, Interbrand New York