Neobanks shake up banks’ brand values

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In the wake of the rise of the neobanks, it is perhaps no surprise that the brand values of eight of the  big high street banks, such as HSBC and Barclays, have dropped by a massive 75% over the last year, according to data from Kantar, reported by Business Insider.

This amounts to a collective $2 billion in lost brand value, Kantar revealed, which uses financial data and survey results to determine brand value.

Significantly, NatWest was the only major bank studied to see an increase is attributed to the rise of popular challenger banks like Monzo, Revolut, and Starling, because they are taking business away from the established banks.

How are the neobanks posing a threat to big bank brand values?

The short answer is that they are more successful at managing their brand across all their product offerings. Here are some points from Gregory Magana, writing for Business Insider, that explain the situation more fully:

  • Neobanks are physically recognizable. For example, Monzo’s coral-coloured debit cards are easily recognized and highly visible. This helps to keep the neobank in consumers’ minds when they see others using the card. And this tactic seems to be catching on across the banking sphere.

 

  • The neobanks’ banking tools are high-tech and intuitive. Successful neobanks excel at impressing customers with their online banking offerings and giving consumers features that offer them intuitive control over their finances, plus they’re continuously increasing and upgrading their suites of tools. For example, Monzo recently announced that it was beta testing a feature that lets consumers block their own spending at specific retailers.

 

  • Neobanks also market themselves extremely well. Earlier this year, both Monzo and N26 delivered major ad campaigns designed to accelerate growth beyond what word of mouth was providing. Both campaigns use minimalist, eye-catching imagery designed to draw attention and are located in high-traffic areas like the London Tube.

 

The heritage banks could revamp their marketing strategies, but they should be careful in creating “edgy” campaigns that mirror neobanks’, because that won’t win them customers. They could improve their marketing, by employing edgy strategies like those used by the neobanks. However, it does require a subtle approach. Just last February, Revolut was ‘shamed’ on Twitter for its Valentine’s Day ad that suggested ‘singletons’ were sad, lonely people.

But will marketing be enough to stem the tide of customers flowing towards the neobanks, or does it really require a major rethink on the part of the banks with regard to their products and customer service. Smart marketing and funky advertising campaigns will not be enough alone.

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