The Erosion of Bank Brands: A Pre- and Post-Recession Story
In case you think that that loss of trust doesn’t matter much – perhaps because banks’ balance sheets generally seem to be recovering quite nicely post-recession – it turns out that improvements in trust are now one of the strongest predictors of stock market performance. Indeed, in our data, the Top 25 trust gainers through the recession outperformed the S&P500 by over 100%.
There are already indications that the banks’ slippage has opened new threats to their business. When we asked people which of a wide range of companies they would open a checking account with, the first bank showed up at #8, behind such brands as Amazon, Wal-Mart, and Target. Google, Apple, and Microsoft also showed up ahead of many of the banks.
So what is it that these non-bank brands have compared to the top bank brands? The top attributes where those nonbank brands outperformed the top banks are visionary, up to date, socially responsible, progressive – and of course, trustworthy. Compared to banks, these brands are viewed as looking and moving toward the future, and doing it in a way that values the communities and people they live among. That’s the roadmap banks need to follow for reinventing themselves for today. With these nonbank brands like Amazon and Apple already processing billions of dollars in payments online, and Google making forays into the banks’ territories with products like Google Wallet, the time for the banks to act is now.