Baby with the bath water
A distinctive brand asset is invaluable. It should be rejuvenated, never jettisoned.
Issue № 111 | London, Sunday 13 October 2024
Read on to learn why:
① Only a fool would scrap a distinctive brand asset.
② You should never succumb to the temptation to modernise for the sake of it.
③ Regulation and taxes are denting Britain’s financial services sector.
④ CBDCs may be just a testing ground for the real prize: tokenised deposits.
⑤ Brand equity is a long-term game but essential for staying relevant.
⑥ Art can be a powerful relationship builder.
⑦ AI’s utility in wealth management depends on its ability to feel human.
What's new
A pensions firm plans to euthanise its old widow in a brand refresh, Citwire reports.
In short:
“Scottish Widows is ‘phasing out’ the widow model with the trademark cloak used in its advertising since the 1980s. The provider has already started using a digital logo of the widow – a red silhouette of a woman wearing a superhero-style cloak. The new widow was launched in August and will run in parallel with the traditional widow until the latter is phased out next year.”
“The 209-year-old business, part of Lloyds Banking Group, has used the ‘living logo’ since 1986, with Deborah Moore, daughter of late actor Roger Moore, the first to wear the iconic cloak, followed by Amanda Lamb, Hayley Hunt and Martinez. The figure is now one of the most recognisable brands in the financial services industry.”
“The firm is said to be keen to move away from being seen as an old-school provider. It wants to be seen in the same way as other pension providers with platforms, such as AJ Bell and Hargreaves Lansdown.”
Why it matters
① Apple infamously called eliminating the headphone jack on its phones “courageous”. This isn’t that. It’s stupid. Only a fool would scrap a brand asset of such distinctiveness, one with such inherent and positive associations, to replace it with something that lacks character and any sense of the brand’s values.
Buried in Citywire’s story is a hint at the deeply flawed thinking driving the change. Chira Barua, CEO of Scottish Widows, said:
“Since we started building the app and digital tools, we’ve been encouraged by the phenomenal uplift in engagement we’ve seen; these investments will be game-changing in helping people take the right steps now to get the retirement they want. We’re also updating the Scottish Widows brand so it feels more intuitive in digital channels, like our app. Our new brand remains true to our heritage, while introducing a new look, including a ‘digital widow motif’ across our app and platforms, to bring it into a new era.”
Customers are adopting their digital channels because that’s what customers are doing. Everywhere. We talked about it a couple of weeks ago. That doesn’t mean it should determine your most distinctive brand asset.
What to do about it
Take action
② Never succumb to the temptation to modernise for the sake of it. The ‘shiny new thing’, ‘the new era’, aren’t for every brand.
When thinking about your brand assets the question that should guide you and any changes you make is: does it convey our core principles? Is it true to our brand’s DNA?
Brand assets sometimes benefit from being refreshed, but never at the expense of losing what made them distinctive and compelling in the first place.
Get help
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Top stories
The other articles that are worthy of your time.
FINANCE
Top UK bankers warn prospect of windfall tax is spooking investors
③ Regulation and taxes are denting Britain’s financial services sector.
“Top UK bankers have warned that tough regulation and high taxes are denting investment in Britain’s financial services sector ahead of Labour’s much-anticipated Budget on 30 October. Senior executives privately sounded the alarm over potential risks to competitiveness arising from government policy and the regulatory rulebook.”
“The banking sector, which enjoyed record profits last year, is considered an easy target for a tax raid as Labour scrambles to fill an alleged £22bn ‘black hole’ in the public finances. Since the general election, the Treasury has neither committed to nor ruled out tax hikes on the sector. The UK financial services industry has warned that high tax rates relative to other European hubs risk dragging on the City’s international standing. The sector contributed record tax receipts of more than £110bn to the Treasury last year.”
“Banking trade body UK Finance has called for a dedicated government champion to review and tackle regulation that hurts the sector’s competitiveness.”
TECHNOLOGY
Tokenised deposits are the real game changer in the financial sector
④ CBDCs may be just a testing ground for the real prize: tokenised deposits from commercial banks.
“Deposit tokens are privately issued stablecoins, i.e., blockchain-based tokens whose value is tied to the U.S. dollar. They offer several advantages over traditional commercial bank money, which accounts for over 90% of circulating money today. The first is instant settlement, a quantum leap compared to the days and sometimes weeks currently prevalent in international transactions. This is enabled by a simultaneous exchange of assets and money (called atomic settlement), which speeds up many transaction types such as cross-border payments and slashes the hefty costs associated with it. The second is their programmability. Thanks to blockchain's smart contract capability, the tokens can be instructed to perform specific actions upon meeting certain conditions. In other words, banks can set up if-then scenarios on a tamper-proof, incorruptible ledger and thus highly automate processes.”
“Titans of traditional finance are leading the charge. As with many other blockchain applications, JPMorgan Chase is at the forefront of deposit tokens. America's largest bank already introduced its JPM Coin in February 2019 for its institutional customers. Later it participated in Project Guardian, a collaboration with the Monetary Authority of Singapore. Citi piloted Citi Token Services for its institutional clients, boosting efficiency in cross-border payments, liquidity management and trade finance. The deposit token is clearly seen as the base for further digital asset solutions, basically building the rails for tokenising all kinds of real-world assets.
“In essence, deposit tokens bridge the gap between the innovative world of digital currencies and the established trust of the traditional banking systems. With their clear regulatory framework, unified risk management and potential for deposit insurance, deposit tokens share more with CBDCs than with cryptocurrencies or even private stablecoins, yet they don't suffer from the same problems.”
MEDIA & MARKETING
How The Economist reached young audiences through new formats and brand marketing
⑤ Brand equity is a long-term game but essential for staying relevant.
“Only around 40 per cent of young people trust news media. Traditional news outlets are being shunned by this generation, who do not see the value of news and generally do not pay for it. Plus, a whopping 80 per cent of young consumers access news primarily through smartphones, deepening the shift away from traditional media. Even when presented with opportunities to subscribe, half the audience say that nothing could persuade them to pay for the news.”
“The Economist focused on creating new formats to meet the needs of Gen Z. One example of this is Economist Espresso, which appeals to those with limited time, offering five short articles per day alongside quizzes and a handful of longer reads. In an increasingly audio-focused market, The Economist is also turning podcasts into a revenue stream. Since October 2023, a podcast only subscription has been available for those exclusively interested in its full suite of shows.”
“The major takeaway from The Economist’s strategy is the critical role of brand marketing in order to achieve growth in a highly competitive media environment. The Economist's marketing extends across various channels, including sponsoring tennis championship t-shirts, podcasts, and even radio spots in the US. These efforts build long-term brand recognition, setting them apart in a crowded market and justifying premium pricing. It also helps create emotional connections, encouraging repeat purchases which builds a flywheel of brand advocates that can fuel growth.”
WILDCARD
Do corporate art collections have a point?
⑥ Art can be a powerful relationship builder.
“As return-to-office mandates tighten, employers see attractive work environments as key to drawing staff back to their desks. Art should have a ‘positive impact on employees [providing] a vibrant, creative environment for them to work in’, says Britta Färber, Deutsche Bank’s global head of art and culture, and should be a way to attract ‘talented new employees as well as clients’.”
“Corporate collections are still an investment opportunity but they are also now deployed as a way to develop relationships with potential customers. Increasingly, in-house expertise is a way to engage with wealthy private clients.”
“Collectors are grappling with new trends — hybrid working but also diversity, and employee sensitivities to subject matter. The corporate social responsibility mission intensified after the pandemic, says Delphine Munro, who is head of arts and culture at the European Investment Bank, which runs an artists development programme and holds a collection of around 1,000 works. The Black Lives Matter movement was one factor that pushed many collections to review their work. At EIB, the criterion broadened from European nationals to artists living in Europe. At Deutsche there has been a push to make women more visible as artists and subjects.”
Off cuts
The stories that almost made this week’s newsletter.
FINANCE
💈 HSBC targets senior bankers in cost-cutting plan
🇨🇭 Ermotti succession at UBS: Mission impossible for Sabine Keller-Busse
💸 BlackRock’s assets under management surge to record $11.5tn
🇬🇧 Barclays appoints ex-Coutts asset management chief as head of UK wealth
📲 Monzo to hit £4.5bn valuation in employee share sale
TECHNOLOGY
🪨 How BlackRock's embrace of tokenisation could reshape global finance
💰 Citi Token Services for Cash goes live
🇪🇺 ECB on tokenisation to support EU Digital Capital Markets Union
🦾 Former UBS chief Ralph Hamers joins AI wealth management start-up
🪙 State Street on tokenisation: Bonds soon, real estate further off
MEDIA & MARKETING
📰 Financial Times battles misinformation and rising costs
🤖 How The New York Times uses A.I. for journalism
💻 Why LinkedIn should be your primary PR channel
📊 Impressions vs engagement: Which should you report on?
✂️ Why companies are cutting the CMO role (and what happens next)
The last word
⑦ Juan Luis Perez, former global head of research at Morgan Stanley and former group head of research, data and analytics at UBS, on AI in wealth management:
“Human advisers may be increasingly assisted by AI but remain in control of the inquiry. But if Silicon Valley is right and the AI agents progress to the point that our conversation with them is fluid enough to give us comfort, we may witness a new wave of industry disruption.”
Don’t settle for marketing.
Strive for InMarketing.
Wishing you a productive week,
