management, emerging as the private bank with the highest level of
familiarity among high-earning individuals in the leading OECD
nations, new research shows. But Citigroup still commands huge
global awareness.
In a special ranking of private banking brands, HSBC Private Bank
just pipped Merrill Lynch and Citigroup, according to Ledbury
Research, a specialist wealth management consultancy. JPMorgan and
BNP Paribas also scored higher than average (see chart
below).
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The Ledbury ranking was conducted among high earners with income of
more than $200,000 in the US, UK, Japan, Germany and France. It was
based on the number of high earners who are either clients or very
familiar with the brand in question.
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By GlobalDataLedbury’s research was motivated by the growing importance of
branding in private banking and tried to find which brands have the
highest-penetration and where gaps in the market exist.
Private banks have traditionally shied away from spending large
sums on marketing, with 51 percent of the main players estimated to
be spending less than $500,000 a year apiece. But, in evidence of
changing attitudes, private banking CEOs recently voted branding
the key differentiator between institutions. A further 47 percent,
in a PricewaterhouseCoopers survey, stated that branding’s
importance would grow over the next three years.
One factor behind the new support for branding, Ledbury thinks, is
that private banks have been unable to increase their share of the
high net worth market because many wealthy investors “are simply
not aware of them, let alone the difference between the various
brands.”
Ledbury didn’t explore reasons behind HSBC’s top brand ranking. But
its global advertising campaigns involving themes like “The World’s
Local Bank” are known to have been very successful in raising
awareness.
The consultancy’s research also shows that Credit Suisse, Barclays
Wealth and Societe Generale Private Banking all fall below the
average awareness score (100). Surprisingly, UBS, acknowledged as
the world’s biggest private bank by assets under management, can
only aspire to 9th place with a score of 86.
Ledbury also measured total awareness of private banking brands, by
including those earners with only some knowledge of the brands. On
this measure, Citigroup Private Clients is the most widely known
with an indexed score of 108.
It was closely followed by JP Morgan with 107, Merrill Lynch with
106 and Credit Suisse at 105.
Credit Suisse is a brand carrying the largest “deficit” between
high earners having heard of the brand compared to those that are
very familiar with it. Ledbury suggests that more could be done to
educate the consumer about the brand’s attributes.
Indeed, Credit Suisse is moving aggressively to raise its overall
profile, announcing earlier this year that it will be investing
$300 million annually in its private banking operations and is
looking to hire more than 1,000 advisors by 2010.
Ledbury goes on to show that, unsurprisingly, awareness and
familiarity is greatest for banks within their home market. BNP
Paribas and Deutsche Bank have near total domestic awareness, with
BNP Paribas doing especially well in France as high earners are
more than twice as likely to have heard of it compared to most
other private banks.
The analysts believe that this may well to do with BNP Paribas’
long-standing sponsorship of tennis competition such as Roland
Garros and the Davis Cup. Ledbury has previously found tennis
competitions to be the favourite event of high earners and the
second most-watched on TV.
BNP Paribas is this month launching its first-ever worldwide TV ad.
Featuring fans invading a professional tennis match, picking up
rackets and playing the game themselves, the aim of the ad is to
show how people from different backgrounds and levels of expertise
can get involved with the bank.
In the US, while potential clients have heard of all the domestic
private banks, they appear to be less well versed in what the
brands actually stand for. Fewer than 35 percent stated that they
were very familiar with Merrill Lynch Private Clients, Citigroup
Private Bank or JP Morgan Private Bank compared to the scores of
more than 50 percent for Societe Generale and Deutsche Bank in
their home markets.
“Further education is therefore needed if brands wish to stand out
from the competition,” Ledbury asserts.
Overall, high earners in the US and UK are least aware of private
banking brands, with just over 20 percent on average stating that
they were very familiar with them. France scored higher with 27
percent while German high earners were even more knowledgeable with
29 percent.
However, it was the Japanese who proved the most able to
differentiate between brands, with an average of 32 percent of high
earners stating they were very familiar with all the main global
private banking brands. In fact, no domestic Japanese financial
institution made it into the leading positions, suggesting that
foreign banks have a significant marketing advantage in
Japan.
Brand positioning
Private banks mostly position their brand based on familiarity,
stressing the importance of this metric as a way of measuring
marketing effectiveness.
Differentiation, or the USP of the brand, is the second most common
method of positioning. Lastly comes the banks’ service
capabilities, according to PricewaterhouseCoopers research. But
this focus looks set to change, with most private banks viewing
“emotional branding and attachment to a brand and their USP” as the
most common positioning tool for the future.
Ledbury suggests however that based on its findings among high
earners, “much more needs to be done to grow brand familiarity
before they can be differentiated.
