How established financial services firms can leverage privacy and security expertise to bolster and reinvent their brand

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Nearly 58% of customers say privacy and security are top concerns that deter them from seeking financial services from technology firms.

There was a time when consumers had far fewer choices, and quality drove business success. However, in the mid-1900s quality was standardized as industrialization and mass production became the norm, and companies needed a new way to stand out.

Enter branding. A way for companies to differentiate products and services by touting benefits. Over time, promotional messages shifted emphasis from functional benefits to emotional value or status, while delivery moved from text to images, and later expanded from newspapers to include broadcast media.

As companies began to charge more for popular brands, prestige-minded consumers were prepared to pay the differential as brand premium for products.

Internet giants level the brand playing field

Consumers switched gears again as the market became digitized and twenty-first-century e-tailers (think Alibaba, Amazon, eBay) made low-cost goods available with a few smartphone clicks. Lesser-known brands gained ground via open marketplace platforms. Today, more than 70% of all consumer product searches on Amazon are unbranded, which means customers are conducting generic searches (HDR TV versus LG, Samsung, or Sony).[1] Moreover, consumer reviews have become a go-to resource for shoppers rather than company product descriptions – indicating a shift in customer trust.

Little by little, brand value appears to be in decline. Technology threatens traditional branding methods but also creates channels through which businesses can deliver easy, inexpensive, quick, and broad-reaching messages. And, as consumers digitally convey messages, insights, and reviews, companies can use this communication data to design personalized products/services.

Organizations have switched from blanket marketing to more targeted branding approaches. Today’s consumers seek customization and continuous, on-the-go access to services/products. In response, more and more organizations are investing in data repositories and predictive analysis. Data privacy cannot be neglected, however, amid data analytics-based services.

Evolution of branding within a cybersecurity context

With power comes responsibility, and in today’s digital world, data is power. However, we have seen organizations known for data supremacy undergo data breaches and missteps, for example, Equifax, which in September 2017 announced the exposure of personal information of 147 million people, the 2018 Facebook/Cambridge Analytica political scandal, and Google’s failure to comply with the EU’s General Data Protection Regulation (GDPR) concerning new Android users.

Nearly 58% of customers say privacy and security are top concerns that deter them from seeking financial services from technology firms and almost 48% said a lack of trust was their top concern, according to Capgemini’s World Insurance Report 2018.

Organizations are acknowledging the importance of data security and privacy. With a nod to confidentiality, Apple said, “What happens on your iPhone, stays on your iPhone,” and limited social media platforms’ access to iPhone customer information such as fingerprints, likes, and shares.[2]

These trends are spurring some players within the financial services industry to modify branding practices. Proactive promotion of security and privacy practices is a branding approach that may keep established financial institutions ahead of new-age challengers.

How is this an advantage for financial institutions?

Incumbent banks offer superior experience and expertise in risk and compliance compared with BigTech and non-traditional FS players. Traditional institutions must comply with regulations such as anti-money laundering (AML) and know-your-customer (KYC) that keep them informed about risks.

A Capgemini cybersecurity and privacy survey found that 83% of consumers consider established banks and insurers to be trustworthy, while only 28% said they trusted e-commerce firms. Customer trust is a considerable advantage that incumbents can leverage as a compelling brand differentiator.[3]

Within the context of today’s ongoing data scandals, financial institutions can leverage their risk compliance expertise and hard-earned consumer trust to differentiate themselves and more aggressively compete with non-traditional financial services players.

FS incumbents can reinvent and bolster their brand around trust

Increasingly tech-savvy customers are privacy-conscious and use various tools to ensure their data security and confidentiality, but they also are prepared to share data in return for value-added and personalized services. Overall, 60% of consumers (56% in banking and 64% in insurance) say they are willing to share personal information in return for benefits.[4]

Within today’s cybersecurity context, we recommend a three-pronged approach to FS brand reinvention.

  1. Give customers control over data sharing. Let them choose the kind of data they want to share or not share based on their level of comfort.
2. Be transparent about where, what, and how your organization uses customer data. 3. Offer value-added and personalized services in return for customer data.

Financial institutions should focus on enhancing the consumer experience while empowering customers to authorize the use of their data. Regulations that drive higher customer control of data (such as the GDPR) are already proving beneficial to the brand of compliant firms.

81% of GDPR-compliant firms say the regulation has had a positive impact on their organization’s reputation/brand image, and 84% say customer trust has increased.[1]

An outgrowth of the twentieth-century need for product differentiation, modern branding is undergoing renewal. Within today’s dynamic, multi-player, open financial services ecosystem, incumbents can use rebranding to boost growth and retain customer loyalty.

If you love trilogies, then alongside Return of the Jedi and Return of the King, financial services firms may now be moving into the Return of Branding era.

To learn more, feel free to get in touch with me on social media.

The author would like to thank Vaibhavi Padma, Latika, and Tamara Berry for their contributions to this article.

 

[1] Capgemini Research Institute, “Championing Data Protection and Privacy,” September 26, 2019, https://www.capgemini.com/wp-content/uploads/2019/09/Report_Championing_Data_Protection_and_Privacy.pdf

[1] Buy Box Experts, “Why Amazon: 2 Huge Reasons Brands Need to Focus on Amazon in 2019,” James Thomson, June 5, 2019, https://www.buyboxexperts.com/why-amazon-2-huge-reasons-brands.

[2] 9To5Mac, “Ahead of CES, Apple touts ‘what happens on your iPhone, stays on your iPhone’ with privacy billboard in Las Vegas,” Chance Miller, January 5, 2019, https://9to5mac.com/2019/01/05/apple-privacy-billboard-vegas-ces.

[3] Capgemini, “The Currency of Trust: Why Banks and Insurers Must Make Customer Data Safer and More Secure,” July 2017, https://www.sogeti.com/globalassets/global/clickable-images/our-services/cybersecurity/privacy-and-cybersecurity-in-fs__dti-research-report.pdf.

[4] Ibid.

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