Mr Darling’s promise/threat to break up some of the high street retail banks is expected to bring some new banks to our high street. Will these be completely new brands or bolt-ons to existing institutions?
I have observed brands and brand management in the financial sector with mixed emotions, though the predominant emotion is probably ennui. The truth is that more retail bank brands will probably do little for the consumer unless someone is bold enough to come up with a seriously innovative and differentiated offer. What I fear is just another smaller clone of one of the existing banks.
I am sympathetic that there is little leeway for retail banks within the current environment – if the three possible directions of differentiation are price, product and service, there is no margin in price, I would suggest, so banks must look to the two other routes. Will we see some creative new products emerging from new business models? Perhaps new approaches to customer service and delivery will present exciting new brand offerings?
Banks have not been noted for the bright ideas springing from their fertile imaginations. ‘First Direct’ was a good idea which failed to capture the market’s imagination and was quickly put into the shadows by the growth of internet banking. The web brought a raft of new approaches, but again failed to thrill.
Will this new opportunity bring fireworks or damp squibs?