Written by Claire Keating, principal of the Financial Services Leadership Team at Marks & Clerk
The landscape of banking has changed in recent years. With smartphone apps and the internet making banking easier, consumers have increasingly moved away from traditional high street banks toward so-called “Neobanks”.
These banks are 100% digital, with no customer-facing premises and no services provided in person, offering all of their services online or via apps. They allow customers to make deposits and withdraw money, they provide credit and lending facilities, and even allow management of investment portfolios, all controlled from the palm of your hand.
A key difference between Neobanks and those on the high street are that the lack of a bricks and mortar presence means fewer overheads, and these can translate to lower fees and higher interest rates for customers, which is of course a selling point. From a branding perspective, different considerations also appear to be at play, with high street banks traditionally preferring descriptive product names that customers can understand, whilst Neobanks appear to be more focussed upon brand identity and customer experience.
Most Neobanks do not hold their own banking license, and so collaborate with a licensed bank, to enable them to provide financial services. However, whilst many of the early-established Neobanks follow this model, there is a subset of Neobank known as “Engine 2” banks, which are Neobanks established by traditional banks as a subsidiary; these are run separately to the parent, but with the financial security of the parent behind them.
This provides an interesting interplay between the parent and Engine 2 bank in terms of branding decisions. As a new bank, a link with the established name and reputation of the parent will be a benefit, at least initially. However, in general, Neobanks aim to have a different “personality” to traditional banks; they do things differently, and they want their brand to be attractive and memorable, in order to appeal to customers.
Of course, these different brand identities can be used to the banks’ advantage, if the Engine 2 can target a customer base for which the parent bank is not a good fit. For example, Mettle only serves small businesses that meet specific criteria, and these types of business are statistically less likely to bank with its parent, NatWest. The two operate under separate brands with unique visual identities and different “personalities”. Their communications and websites use different tones of voice, and for Mettle, there is a stronger emphasis on digital marketing, with focus on speed, ease and flexibility of service.
The personality of a brand is key in attracting the “right” customer, whomever it might be that you are targeting. Your brand is not only your name, but also a combination of the elements that portray the personality of your business. These can include logos, typefaces, tag lines, and even colour schemes, and careful consideration is needed before launching a new brand, in terms of both whether it portrays your desired personality and – crucially – whether it is as unique as you need it to be. The last thing a newly launched business needs is for their chosen brand to conflict with that of a third party, and so comprehensive clearance searches are a vital part of the planning process.
