CHAT BACK: A clear advantage

With Australia’s banking system dominated by four monolithic institutions, smaller financial brands and regional building societies may find their disadvantage is now a clear advantage.

We believe the current conditions in Australia offer challenger financial brands a significant opportunity to grow market share and brand value.

Ongoing financial uncertainty, interest rate and fee pressures combined with consumer unease with the way the big four enjoyed government protection to rake in massive record profits during the GFC while at the same time increasing the fee burden on their customers give smaller financial brands a chance to position themselves as viable and attractive alternatives.

The local financial planning industry is also undergoing significant change in terms of branding and communication thanks largely to the GFC and the discredited commission system.  

Many Australian financial planners have spent the past year busily rebranding to put recent scandals behind them with commissions now 'asset-based fees'.

In the US, the global financial crisis has seen many financial services providers rethink their branding. It’s almost an American tradition for discredited companies to shed their old skin and get a new one – think of Worldcom and Phillip Morris.

But all the rebranding in the world is useless if the underlying core issues are not addressed.

In Australia, people want real alternatives to the very limited retail and business banking options currently available.

Banking consumers, unlike the long loyalties of the past, are moving much faster than we may think with their financial decisions. People are open to change.

The biggest challenge for smaller financial brands is to be heard above the noise generated by the massive amounts spent on branding and advertising by the big four banks and their sub-brands.

This coupled with customer inertia, and the time and cost involved for people wanting to switch brands, makes the task greater.

We believe smaller financial brands in Australia have an opportunity to focus on what makes them different to the monolithic four.

Brand managers for smaller building societies and companies trying to offer an alternative need to give consumers an authentic and genuinely different choice.

They need to clearly identify and define their purpose, service proposition and product offering and distill these advantages into their simplest form.

Focus on what it is that makes them different from the ‘bigness’ of the major banks that puts so many people off doing business with them.

The second step is to communicate these advantages through every single customer touchpoint with one powerful idea – one brand voice.  

But good brand advocacy is always built from one core business truth. Find this and do it well everyday and you are on your way to success.

Underdog brands have the opportunity to gain psychological, and real power in the marketplace. Australians have always identified with the 'underdog' and relate well to the idea of the 'battler'.

At the same time, research also demonstrates many customers look for size and credibility when choosing a bank. So challenger brands need to be careful not to overplay their 'smallness'. The GFC showed us how quickly consumers will desert small banks and rush back to the big names when panicked.

Our history is steeped in determination and passion to succeed – demonstrated in our ability to punch well above our weight on the global stage today. Our national psyche is not bound by old conventions or obstacles.

We believe Australian consumers are eager to engage with brands that deliver this kind of value proposition.

For smaller financial challenger brands this means going back to their roots, finding the original facts and stories about how the business began and what needs in the community they aimed to meet.

Challengers must create brand stories about the earlier visionaries of the business, find the human truths in the way their business is conducted every day that focuses on the needs of their local and ‘every day customers.

The big banks spend millions telling customers how dedicated to service they are. Unfortunately this is not always the reality when you walk into any branch of a major bank.

Customers want to know the business has a story that brings to life the history and reason behind the brand as it is today within the context of being genuinely different to the big banks.

We see the underdog challenger brand everywhere these days.

Almost every major election campaign around the world recently has been a choice between an established contender and a challenger who firmly positions themselves as the underdog alternative.

Today more than ever, these branding strategies have enormous traction.