The word “bank” is now considered a detriment in financial institution marketing for some people, including marketers who deal with customers on a daily basis. Although the practice is still in its early stages, an increasing number of financial institutions are removing the word “bank” from their visible brands in an effort to be more appealing to customers.
Even though “bank” must be included in the official names of banks operating in Indonesia, as well as ASEAN, most banking institutions are now marketing themselves using abbreviations or without the word at all. People are more familiar with institutional brands like Standard Chartered, HSBC, ANZ, UOB, CIMB, BCA or Mandiri than their full-length, formal names. Maybank is an exception to the trend because removing “bank” from its name would sound strange.
The word “bank” is conspicuously absent from the brand names of many digital banking competitors, including Jenius, Blu and Livin. Others, including Allo Bank and Neo Bank, continue to use the word, possibly intentionally to help consumers understand that theya re more than just a financial technology (fintech) company or a mobile application. Bank Jago might be another exception, too, because it sounds like “bang jago”, an Indonesian vernacular that is similar to “bro” in English.
Financial institutions must ensure that they are not simply reacting to a current trend
Before embarking on a major rebranding effort, however, financial institutions must ensure that they are not simply reacting to a current trend. This line of reasoning can be understood when viewed in a certain light, at least partially. Although this strategy has the potential to benefit some, the vast majority of financial institutions should probably avoid it. This is because unless they operate in a market where they have a significant presence or are a massive global institution, the majority of banks risk losing mindshare with the average customer if they dropped the word “bank” from their names.
Nonetheless, a number of factors may prompt some institutions to consider dropping the word “bank” from their names. One is the meteoric rise of fintech as a competitive driver, combined with the fact that the majority of fintech companies focus their marketing and messaging on attacking banks. The names of fintech companies are typically hip, simple, easy to pronounce and exclude the word “bank”, because they are not banks.
Customers taking their money out of banks due to their religious beliefs can be another reason, at least in countries where Islam is the dominant religion, like Indonesia and Malaysia. This could also influence the decision of some banks. Removing the word “bank” from its name could be an alternative approach to encouraging Muslim customers to continue using an institution’s financial services, similar to how there is a growing trend to include halal or sharia in a company’s name.
Using simpler names could have an impact on financial institutions
The broader trend among big consumer brands toward using simpler names could have an impact on financial institutions as well. Simplifying brands in order to appeal to specific audiences with a new and relevant brand image and style that meets perceptions related to speed, simplicity, ease of doing business and overall brand experiences, can indeed be beneficial.
On the other hand, many other businesses do not benefit from the massive advantages banks enjoy. Banks have branch footprints in major areas, economies of scale as well as large advertising, public relations and social media budgets, which other consumer brands might not have. Banks are thus able to develop a significant and distinctive brand name with or without the word “bank” in their names. If a financial institution chooses a sleeker and simpler branding strategy that does not include the word “bank”, it risks losing the trust of its customers and potential customers.
The vast majority of consumers have faith in banks
Despite the many negative connotations that customers associate with the word “bank”, the vast majority of consumers have faith in banks, particularly in ASEAN, where banks are seen as symbols of stability and rigorous management. Furthermore, consumers continue to place their trust in traditional banks with physical locations and a clear and distinctive name, rather than fully digital financial institutions with customer services that consumers can hardly reach.
There is a chance that banks that choose to go in the direction of removing “bank” from their names will come to regret their decision over time. Prior to the turn of the century, there was a significant push for credit unions to drop the words “credit union” or “cooperative” from their names. This was primarily to strengthen their ability to compete with banks and attract customers who were unfamiliar with the concepts of a credit union or cooperative. At the end of the day, credit unions are taking greater pride in their unique position and emphasizing it in their marketing materials to differentiate themselves from other financial institutions, such as banks. Cooperatives, on the other hand, are required to use the term “cooperative” because they are not permitted to provide the same services as banks.
Finally, traditional banks face the challenges posed by fintech and even technology firms offering products and services that were previously only available from traditional banks. Simply dropping “bank” from their names will not solve the problem. Stringent management, innovation and maintaining customer trust will.
This article was originally published in The Jakarta Post.