BBDO KNOWS Banking Industry Challenges Part Two
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Transcript of BBDO KNOWS Banking Industry Challenges Part Two
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KNOWSBBDOBANKING INDUSTRY CHALLENGES PART TWO2013
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KNOWSBBDOMISTRUST
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KNOWSBBDOKNOWSBBDOWHAT ARE THE BIGGEST CHALLENGES FACING THE BANKING INDUSTRY TODAY?
BBDOEXPERT VIEW:
LEILA GHORASHI, Senior Director, Corporate Executive Board Financial
Services
THE TRUST DEFICIT
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KNOWSBBDOKNOWSBBDO
Source: Edelman Trust Barometer/nVision | Base: 5,200 informed public respondents in 25 countries aged 25-64 (see notes), 2013
0% 20% 40% 60% 80% 100%
Technology
Automotive
Food and beverage
Consumer packaged goods
Telecommunications
Brewing and spirits
Pharmaceuticals
Energy
Media
Banks
Financial services
2011
2012
2013
% who trust the following industries | global average | 2013
TRUST IN DIFFERENT INDUSTRIES
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KNOWSBBDOKNOWSBBDO When the institutions deemed too big to fail failed us,
consumer confidence was irrevocably shaken
Trust in banks is low and has decreased since the height of the crisis in 2008
Banks and financial services providers ranked lowest on Edelmanns trust barometer in 2012
MISTRUST
IMPACTS REVENUES
IMPLICATIONS FOR THE BANKING INDUSTRY
Lack of trust can severely impact a local banking industry, in Greece confidence was shaken so much that customers have transferred more than 22BN Euros abroad, a situation likely to be replicated in Cyprus
Source: BBDO Greece, Edelmann, Ernst & Young
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KNOWSBBDO
The fallout from the financial crisis in 2008 continues to impact banks and importantly the IMAGE of banks. The customer, the media and the investors remain sceptical and continue to express mistrust and a lack of confidence
CHALLENGE:
Banks need to change the conversation, they need to dissect mistrust and understand exactly what issues customers have, equally they need to improve the perception of safety and security
IMPLICATIONS FOR BANKS
IMPACTING POTENTIALREVENUES
CRISIS OF TRUST
LIMIT THE IMPACT
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KNOWSBBDOTHE CUSTOMER
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KNOWSBBDOKNOWSBBDOWHAT ARE THE KEY CHALLENGES FOR THE BANKING INDUSTRY TODAY?
BBDOEXPERT VIEW:
ANNABEL GORRINGE, Head of Content for Banking, Datamonitor
CUSTOMER, CUSTOMER, CUSTOMER.
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KNOWSBBDOKNOWSBBDO People power will continue to demand more honesty, improved
quality and transparency
Banks need to build a new model to generate revenue and need to identify and target customers that can be a source of profitable growth
Ernst & Young suggest the challenge will be to ensure banks continue to own the customer relationship and focus finite resources on the right customer. Booz & Co identify that banks will need to resolve long-standing customer pain points
Datamonitor identify customer centricity as the new battleground and suggest those banks that put the customer at the heart of their business are the ones making the most progress
THE CUSTOMER
REDUCES REVENUES
IMPLICATIONS FOR THE BANKING INDUSTRY
42% of customers globally claim to have switched banks, 12% are planning to switch banks in the next 12 months
Source: Ernst & Young, Booz & Co, Datamonitor
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KNOWSBBDO
The customer today is cynical, mistrusting, disgruntled and disloyal especially when it comes to banks. They are increasingly difficult to win over and are increasingly likely to switch or bank with multiple financial institutions, this is not good news for banking profits
CHALLENGE:
Banks need to better understand the needs of todays customer. They are looking for a relationship with their bank, banks need to win favour again and ensure they own the customer relationship
IMPLICATIONS FOR BANKS
DIMISHING REVENUES
INCREASINGLY COMPETITIVE LANDSCAPE
LIMIT THE IMPACT
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KNOWSBBDOIMAGE
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KNOWSBBDOKNOWSBBDO
Bank of Dave, UK TV Show
PEOPLE WHO ROB BANKS GO TO PRISON, BANKS WHO ROB PEOPLE GET PAID BONUSES, ITS GOT TO STOP.
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KNOWSBBDOKNOWSBBDO
Jones LaSalle
BANKS NEED TO INVEST IN PERSONALITIES, IMAGE IS EVERYTHING.
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KNOWSBBDOKNOWSBBDO
Source Kanatar, Jones LaSalle
IMAGE
NEGATIVE PERCEPTION
IMPLICATIONS FOR THE BANKING INDUSTRY
In the US in 2012, 1 in 10 political TV ad dollars spent between mid-April and September went on advertising castigating the financial sector, thats $91m of non category advertising spent on diminishing the reputation of the finance industry
Banks endure outside attacks and constant negative media coverage. Bashing banks has been commonplace over the last 5 years and will continue across the decade according to Jones LaSalle
Bank brands suffer an emotional deficit, they rate quite highly on rational measures but very poorly on emotional engagement. According to analysts they have poor personalities
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KNOWSBBDO
The banking industry is mid-image crisis, the industry continues to be characterised by greed, blame, mistrust. Banks rate higher on rational measures but suffer when it comes to emotional engagement
CHALLENGE:
Banks need to address the image crisis and improve their overall perception, individual banks must work on improving their reputations from the inside out, starting with the relationship they have with their customers
IMPLICATIONS FOR BANKS
IMAGE CRISIS
GREEDBLAME
MISTRUST
CHANGE THE CONVERSATION
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KNOWSBBDOCOMMUNICATION
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KNOWSBBDO
WHAT ARE THE MAIN CHALLENGES FOR THE BANKING INDUSTRY?
BBDOCLIENT VIEW:
Ensuring tonality of messages truly reflect the current mindset of Canadians... It will be difficult to strike the right balance of encouragement without seeming insensitive or unconnected to the average Canadian.
VP Marketing, Royal Bank of Canada
KNOWSBBDOFINANCE
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KNOWSBBDOBBDOCLIENT VIEW:
Its a dual agenda, one part of it is managing the present agenda which is business as usual from a communication perspective. Its about making sure you have communication that works for your topline, that delivers results and that spreads relevant value propositions but at the same time, times are not normal... It is about really understanding how the world is going to move forward. When you work in the financial sector and in brand and communications you couldnt have chosen a worse or more challenging environment where you have a tremendous amount of change everywhere.
Global Head of Marketing Communication, BES
KNOWSBBDOFINANCE
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KNOWSBBDO
The difficult external backdrop and numerous other challenges makes choice of message and tone a challenge in itself
CHALLENGE:
Banks need to utilise their communication to encourage better customer relationships, and in turn a better reputation
IMPLICATIONS FOR BANKS
DUAL CHALLENGE
HOSTILE ENVIRONMENT
IMPROVE RELATIONS
REPUTATION REVENUES
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KNOWSBBDO
SUMMARY
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KNOWSBBDOCATEGORY CHALLENGES
SLOW MOTION RECOVERY
MISTRUST
SUPERVISION
CUSTOMER IMAGE COMMUNICATION
COMPETITION MODELBUSINESS CHALLENGES
COMMUNICATIONCHALLENGES
KNOWSBBDOFINANCE
Financial category challenges are hindering growth and profitability. Certain challenges are operational and highlight a need for continued efficiency. Other challenges relate to the continued negative perception of the banking industry THE IMAGE CRISIS, here the communications industry has a significant role to play