In the current climate — which is unpredictable at best — many people are feeling anxious and craving stability and guidance in their financial planning. Due to their concern, consumers’ usual antipathy to the financial services category is weakened and they are prepared to engage with an industry that they previously disliked.
These three points starkly highlight this dramatic consumer shift:
24% of Americans have reached out to a financial professional for the first time because of the pandemic
68% of millennials feel strongly financially impacted by COVID-19, the highest of any generation. Considering their age and prospective earning power, there is a huge opportunity for long-term growth within this demographic
People are saving at levels that haven’t been seen before
This presents a major opportunity for brands that can boldly step in to offer true guidance rather than empty platitudes, as emphasized by Mastercard CMO Raja Rajamannar:
“This is not a time when you want to sell. This is the time to serve. Consumers don’t want you to keep sending ads to them in a tone-deaf fashion. They’re going through a crisis with a lot of fears and apprehensions … If you’re trying to solve some problem or pain point for people, do it. If you’re not trying to solve some pain point, then do something for the community.”
In other words: To truly engage audiences, a brand story has to be not only relevant to consumers right now, but also differentiated from the rest and marked by a true authenticity that reflects its unique DNA.
The financial services category relies on longevity; it is based on long-term relationships and commitment to financial plans that span decades of good years and bad. For that reason, it’s crucial to establish consumer loyalty. In attempting to do so, most financial services brands fall back on universal — and often hackneyed — appeals to comfort and peace of mind, underpinned by products that are indistinguishable from competitors’. This “safe” route cunningly avoids the perceived risk of having an actual point of view.
Many brands in the genre, to their credit, have made some attempts to pivot and adapt to an increasingly unpredictable world. But these hasty, panicked efforts have exposed an underlying problem: While they strive to be distinctive, they don’t yet have a truly relevant perspective that can cut through consumer fears and anxiety and drive positive change at a pivotal moment of economic uncertainty, financial anxiety, and social inequality. Our analysis reveals that most financial service brands aren’t offering either relevancy or differentiation in their messaging — and certainly not both. This doesn’t bode well for long-term success.
Observations of the category: Concerted efforts at a differentiated message
Brand Experience:
As part of one of the least trusted industries, financial services brands are attempting to gain confidence with clients by easing their unique financial challenges with bespoke solutions, an approach that has been particularly evident during COVID-19. Personalization technology can strengthen the bond between consumers and financial services brands; after all, 72% of consumers say they only engage with personalized messaging, according to a 2019 study by SmarterHQ. TD Ameritrade, for example, used IBM Watson to shift to a more custom-tailored comms approach. Leveraging its traditional digital display channel in an innovative way to lead consumers through a process of self-directed discovery, the brand empowered clients with a new level of choice and agency in pursuing their financial goals.
Brand Message:
Most brands in the category attempt to insert product-focused narratives within emotionally charged lifestyle scenarios. The few brands that tell stories about themselves or their beliefs stand out from the crowd. For example, highlighting their insight into financial challenges Americans face, Prudential has established a clear, emotionally engaging narrative around “The State of Us.” By offering a Financial Wellness Assessment, they show consumers that they understand their unique concerns. With a combination of empathy and practicality, a brand can establish a clear role in consumers’ lives simply by meeting them wherever they are. This inherently shows a brand’s willingness to embrace individuality and diversity of experience, rather than march forward with a stilted, one-size-fits-all approach. That emotional aspect is something people connect with: In fact, 64% of consumers cite shared values as the primary reason they have a relationship with a brand, according to the Harvard Business Review.
Brand Equity:
Fictional mascots are another common way for financial services companies to differentiate their identity. An enduring brand mascot succeeds by personifying the values, aspirations, and promises of a corporation to prospective customers. From the Geico Gecko to the TD Ameritrade Green Room Guy to Voya’s Vern the rabbit (shown above) and Val the squirrel, the financial services sector is rife with characters whose function is largely — or, in some cases, completely — symbolic. Strategically obviating the particulars of liability coverage, Roth IRAs, and other obscure shop talk, financial brand mascots deliver an entirely different class of information: narrative storytelling. The success of such appeals has been documented by brands and marketing scholars, from corporate-mandated revenue reports to academic studies (Tsai and Honka 2018).
Truth is the first step to a relevant story
In a period of intense uncertainty, consumers are craving concrete truths. For other categories, this can be an opportunity to lean into messages of reliability, nostalgia, or safety; for the financial services category, such messages have much higher stakes. A food company, for instance, can give you warm and fuzzy feelings by celebrating the comfort food we enjoyed as kids — but the financial services category concerns a much more stressful topic: the security of knowing you can continue your lifestyle into your old age. Brands must commit to — and invest in — a true message and offering that connects honestly and viscerally with their prospects.
Even though it’s a tougher sell around the boardroom table than an innocuous, fun tagline, this commitment to purpose pays off, especially given our predominant cultural conversation on diversity, equality, prejudice, and racial bias in the world in general (not to mention the financial world). Beyond facilitating clear communications, an engaging mission drives results: 66 percent of Americans would switch from a product they typically buy to a new product from a purpose-driven company, and 77 percent feel a stronger emotional connection to brands that lead with purpose (2018 Cone/Porter Novelli Purpose Study).
The most effective of these campaigns are ones with longevity. Brands that delve into this space need to commit to regular measurement and optimization to not only clarify their stories but ensure they are being applied to maximum effect across channels. Most importantly, they must unwaveringly commit to big-picture thinking: Maintaining and optimizing a story that remains meaningful, relevant, and differentiated not just through these topsy-turvy times, but over the long haul.