BrandZ: Financial Services
The Financial Services category includes retail, business and investment banking institutions; insurance players from both the business-to consumer (life, property, and casualty) and business-to-business sectors and payment brands (i.e. brands used to pay for things either in stores, over the phone or on the internet). These are the debit or credit card networks companies whose logo is displayed where debit and credit cards can be used and online payment systems whose logo is displayed when you make an online payment.
Most top financial services brands declined year-on-year, as the category’s recent successes gave most brands breathing room to prepare for more challenging years ahead.
This year, the category expanded and was renamed (from the earlier ’Banks’) to encompass a wider range of financial operations. The big credit card companies are all at the top of the ranking, with the large North American and Asian banks. But they are joined, this year, by insurance brands like UnitedHealthcare and AIA, as well as the fintech pioneer PayPal.
Macroeconomic headwinds have placed a damper on the stock prices of publicly traded financial brands – which in turn negatively affects brand valuations for Kantar BrandZ rankings. In the US, the failure of Silicon Valley Bank highlighted the risks smaller banks faced amid rising interest rates and jittery investor confidence; in Europe, the collapse of Credit Suisse further underscored the importance of reputation management. Meanwhile, in some Asian markets especially, brands are being challenged on brand equity by new, disruptive payments platforms and superapps.
By the beginning of 2023, it began to seem like for every bit of good news for financial services brands, there was a potential risk to match.
Many big banking brands, for instance, began to report record or near-record profits for 2022 (representing the final crescendo pandemic-era monetary and fiscal stimulus efforts). But at the same time, they announced they were setting aside more money to prepare for a possible slowdown in economic activity (and deal-making) for the rest of the year.
A wave of instability in crypto and smaller-sized banks could, in theory, reinforce the trust credentials of the more highly regulated big banks – unless that instability begins to erode confidence in the wider banking system.
After two years of parking their money and saving more conservatively, debt levels among North American consumers have begun to rise. On paper, this kind of borrowing is (literally) an asset for banks and credit card brands – unless that debt reaches a tipping point, and a wave of painful defaults ensues.
But if banks themselves are navigating uncertainty, consumers are doing so, too – and with even less of a war chest to mitigate risk. And therein lies the brand building opportunity for top financial services brands, relative to the 2008 financial crisis: brands aren’t being blamed in the same way for causing today’s economic headwinds, which gives them more of a right to act as helping hands.
That help could take the form of smarter ‘financial assistants’ to help people navigate their finances. (While chat AI and other breakthrough innovations won’t be able to give investment advice in many markets, it can be used to help people understand their historical spending and saving patterns, and alert them to changes in indicators like their credit score.) It could take the form of risk-mitigating products like the guaranteed income plans offered by HDFC Bank and AIA in India, which are marketed to help household money managers (especially women) contribute toward long-term insurance policies, while also setting aside money to be invested and returned sooner in the form of tax-exempt payouts. And it could take the form of new innovations around the marketing of CD and money market accounts – both of which are newly hot again in the context of higher short-term interest rates.
