Do financial services have to be so predictable?

Why financial services businesses are massively undervaluing themselves.

Take a quick tour around the online world of financial services, and it gets pretty hard to differentiate one from another. You’ll see blue. More blue. Men in blue suits. Some vague and generic promises about client service blah blah blah. Ooh, look, there’s another man. In a blue tie.

It’s all so…predictable.

Why do all financial services look and sound the same when the industry desperately needs to attract the business and skills of younger and more diverse communities? Shouldn’t they be tearing themselves away from the blue and the bland and surprising us with something new and unexpected? And how easily can they do that?

We wanted answers. So we got two of our favourite brand and communications experts in the hot seat - Michael Gough, Strategy Director at brand and design agency Sparks Studio, and Julia Streets, CEO at Streets Consulting - for the first episode of the upfront podcast.

They didn’t hold back. Here are some of the highlights from the show. Listen to it in its full glory on the upfront podcast.

Let’s get straight to it, do financial services have to be so predictable?

“The consumer doesn’t know who to choose because everyone is generic, bland and vanilla.”

Michael No is the quick answer. I think they’re only that way because it’s a service industry that has largely grown through word of mouth referrals, so they’ve never really had to think about the role of brand and marketing beyond their natural network. They’ve completely lost sight of the difference, the benefit they can have on their clients. The consumer doesn’t know who to choose because everyone is generic, bland and vanilla. There’s no point of distinction. There’s a massive opportunity for these businesses to think about their positioning and how they engage the market. The whole industry could do with a rethink.

Julia Part of it is because older financial institutions have centuries of pedigree. If you’re hundreds of years old and had a brand that’s evolved and probably been tweaked over time, you’re going to fall within certain very corporate colourways naturally. The key thing ultimately is trust. You might trust a blue or red brand. Lime green is fun to see but will evoke a very different emotional reaction when you’re talking about people’s money.

“The whole industry could do with a rethink.”

Does that mean there’s only so much that financial services businesses can get away with?

Michael Trust is important, but so is recall and memorability. The first thing about brand and brand strategy is ‘can we make sure we’re remembered?’ and colour is one of the tools to create that memorability. Julia’s right, you can go as far as you like to create that memorability, but there’s a balance to make sure there is a sense of trust as well; that you’re dependable, reliable and a safe pair of hands. I think the industry has relied too much on that. The point is, will your target audience remember your business at the point when they are going to instruct someone?

This goes beyond choosing between Midnight Blue and Screamin’ Green on a Pantone chart, right?

Michael Yeah, there’s a growing awareness that brand is more than just the logo's colour. The best description of a brand I’ve heard is often associated with Jeff Bezos. He describes brand as what people say about you when you’re not in the room. You’ve got the opportunity to shape the narrative - why do you exist? What difference do you make? Finance, in particular, talks about client service, experience, and the performance of funds under management, but those things are features. Purpose helps to shift the narrative to talk more about benefits. What are the consequences of those things for your end-user? What does good client servicing mean? There’s a real need to help people see the value of financial services beyond the features it offers into the difference it’s going to make, and that’s all about purpose.

Julia We also have to be mindful of conscious and unconscious biases, and we could have a whole other conversation on how you tackle it in organisations. If you’re producing creative content that reveals itself to be primarily male, macho and white, you need to turn around. Hold yourself to a higher account. Ask yourself, ‘Is this good enough?’ And does it align with your values - your purpose?

“There’s a real need to help people see the value of financial services beyond the features it offers into the difference it’s going to make, and that’s all about purpose.

Surely financial services already know what their purpose is?

Michael This industry is largely undeveloped when it thinks about this opportunity. I don’t think many brands are doing it that well. Businesses are too quick to assume their relevance rather than work out what connects with their audience. They’re massively undervaluing themselves. Companies need to spend more time working out where they fit in the market. What are they bringing that is distinct from others? That requires thinking about much harder and more rigorously. Everyone thinks they know the relevance of finance and financial services. Actually, no, they don’t. No one’s ever explained it.

Julia There’s a huge opportunity to show the impact financial services make on society, which also has commercial benefits for firms. Purpose or profit shouldn’t be remote. It’s about creating wealth for all - economic impact for all. Think about social inclusion and financial inclusion. It’s reaching out to people in society who can get themselves on their feet, get into the workforce, start earning, providing and saving and having better financial pathways through their life journeys. Imagine how you could inspire a future generation and bring communities together to make an impact as well. We tend to look at it siloed through a corporate direct to customer point of view, but you can extend its potential so much wider, which can only be good for everybody.

Michael The idea of brand purpose and business purpose is current. Many people are thinking about the difference they’re making in the world and is that difference positive. My frustration is that it always becomes a dichotomy - you either have to choose a purpose or choose profit. That just seems naive. There needs to be much more nuance on the topic of how these two central planks of impact can work together rather than compete together.

What do financial services have to do to prove they are relevant to people?

Julia It’s about making a connection. Why would I care about them? What do they mean to me? Why would I go with a bank that’s hundreds of years old and has a red or blue logo when I could be working with a challenger bank like Monzo? Younger generations are coming through, and marginalised communities say, ‘it’s just an alien world to me’. Businesses also have to position themselves as places where people want to work. This is one of the biggest challenges facing financial services right now - in that is a really important conversation about diversity, equity and inclusion. If we want to be out empowering communities to engage with financial services, we have to bring in talent that understands what those communities need.

Michael The vast majority of the population just don’t see the relevance of financial services. They don’t understand the difference it can make to have a financial planner working alongside you to help you understand and plan for your future. The fantastic thing about financial services is that they have a great opportunity to create freedom and liberty, free people up to do the things they want to do because they are no longer beholden to their finances. It’s making sure that people know the benefit of what financial services do means you can retire early or do X, Y, and Z. Financial brands have to demonstrate the value of that point.

What one thing should financial services businesses stop doing right away?

Michael Move away from its obsession with features. Stop talking about how important your client servicing is. Of course, it’s important; you wouldn’t be in business if it weren’t. Stop talking about the obvious stuff, and work out what you’re bringing to the market that nobody else is.

Julia Ditch the assumptions. Incredible assumptions are made daily about what consumers need, what investors and organisations need, and there are so many ingrained assumptions everywhere. They need to be ripped up.

What is your advice to help financial services be less predictable?

Michael Be clear who you’re going after - your target audience - in as much granular detail as you can. There’s no unique methodology here, just sitting in their shoes and working out what is going on in their lives. Where is the point of connection and point of relevance for your service? Remember that you are tiny in terms of your influence in their world. You’re one of a thousand things they are thinking about that day. What you’ve got to do is be distinctive and clear, concise and compelling. Speak to their needs. That will go a long way to help you connect to your audience.

“Stop talking about the obvious stuff, and work out what you’re bringing to the market that nobody else is.”

Julia You’re only a small part of people’s lives, but you’re also only a small part of the ability to create and distribute. Collaboration is one thing the industry needs to think about - and I am seeing it a lot more. It’s important to align and collaborate with others to extend your services. We’re at the most incredible inflexion points where financial services could embed into people’s lives. Historically financial services have always taken the view of ‘it’s our institution, it’s our products and services, we will never integrate with anyone else. You come into our doors, our branch’. Now that’s been thrown on its head by Open Banking, and now it’s all about how do we as an institution that may be hundreds of years old, how do we integrate with a fintech that’s probably a matter of months old? How do we get it to all work together?

Do you think financial services have what it takes to be less predictable?

Michael Business owners are going to have to take some risks. Moving away from the bland and predictable sincerely and authentically will require some strength of character.

Julia And there are loads of them out there. The wonderful thing about fintech innovators is that they don’t tend to be young PhD graduates. They tend to be people who’ve worked in the industry and are at a life stage where they’re prepared to take risks. They understand it, so they are very open-minded about the best way to innovate and take the regulators on that journey. The enlightened leaders - the ones who can reach out to communities, find and harness talent and innovate - will do incredibly well. They will fly.

Listen to the upfront podcast for the full conversation as Michael and Julia talk greenwashing, what they love about financial services and getting angry in the House of Commons.

Do financial services have to be so predictable? Share your opinion with us at upfront@iress.com