Meaningful Monzo?

Unlocking the power of brand in banking

Martin Guerrieria
Global BrandZ™ Research Director
Kantar
Martin.Guerrieria@kantar.com

Sara Reid
Global Consultant – Search & Social
Kantar
Sara.Reid@kantar.com

The nine banks featuring in BrandZ™’s Top 75 most valuable UK brands 2019 are very valuable brands indeed. Their combined value of $42.3 billion accounts for more than 16 percent of the total value of the entire Top 75. HSBC alone comprises more than half of this total, with a brand value of more than $23 billion, placing the brand in second place overall.

These are brands with a long history – an average age of 183 makes them some of the oldest brands in the world and by definition some of the most successful.

These huge values suggest an industry awash with brands with very strong brand equity – but in fact the data suggest a very different picture.

Brand Equity - Vitality Quotient

On average, banking brands in the UK perform below average in terms of their collective strength of brand equity compared to brands in other categories, with an average equity score of just 97, where 100 is an average performance (the nine brands of UK origin fare a little better with a still-below-par 99). This suggests that it is the sheer financial might of these brands that propels their stellar brand values, rather than necessarily their strength of brand equity with consumers. This highlights a clear opportunity for banking brands to add greater value to their businesses by building brand to better attract and retain customers in the short and long term.

Two areas underpinning this performance are generally low perceptions around brand experience and innovation, both drivers of brand equity and brand value in their own right. UK banks under index in both areas, with scores of 97 in each.

The history and heritage of UK banks suggests that impacting the banking landscape in any meaningful way is a difficult and long-term task. However, enter Monzo.

Founded in 2015 as the first digital, mobile-only, branchless, chequebook-free “Bank of the future”, Monzo is beginning to make waves, with a unique proposition attracting around 40,000 new customers each week. The brand’s tech-focussed, disruptive message is clear, with co-founder Tom Blomfield describing the brand’s target as “those who value convenience and technical innovation”. However, Monzo is certainly not yet well known to the UK population, which both search data and BrandZ™ salience data clearly illustrate.

At present Monzo has a very low profile versus other banks in the UK

That said, salience alone is clearly not enough to begin and sustain brand success – rather, establishing genuine “Meaningful Difference” from the competition is key – clearly communicating a leading point of difference, combined with relevance and an advantageous emotional connection via delivery of a positive experience.

Monzo is clearly already a VERY well-differentiated proposition for those aware of the brand, resulting in comparatively strong overall brand equity given the brand’s comparative youth. This is underpinned by strong perceptions of innovation, disruption and great brand experience, resulting in a sense of growing momentum. Consequentially this is a brand with a clear opportunity to add relevance and meaning to a broader group of potential customers.

Monzo offers a VERY well differentiated proposition, which underpins strong brand equity considering a comparatively short time in market

In fact, the brand has already begun this journey with under-35s, for whom the brand already has much greater meaning, (though perhaps surprisingly, no greater salience, suggesting further headroom to grow). The brand’s potential is also clear amongst the older population, who clearly also understand that the brand offers a genuinely unique proposition.

Brand equity by age

Adding a detailed understanding of search terms and social conversations brings an additional layer of insight and a more holistic understanding. Customers clearly have a great deal of positive sentiment towards Monzo, with an overall net sentiment of 15 percent compared to other large players (for example Nationwide and HSBC have figures of 6 percent and 2 percent respectively). The most commonly discussed topics around Monzo are the brand’s innovative digital offer (app and online banking) and strong customer service credentials.

Search Terms and Social Conversation

Social Data

It seems that Monzo’s defining feature and attraction lie in the brand’s ability to truly redefine great customer service and convenience in a branchless world. By understanding the way customers’ banking needs are changing, and developing an ever evolving proposition accordingly, the brand is in a strong position to penetrate much further in future. Incumbents beware: the time has arrived in which to invest, modernise, adapt, re-invigorate and re-emphasise brand proposition, if historic success is to continue for the next 100 years and beyond.

Incumbents beware: the time has arrived in which to invest, modernise, adapt, re-invigorate and re-emphasise brand proposition, if historic success is to continue for the next 100 years and beyond.

Implications for Brand Building

  1. Successful brand building is possible in a  comparatively short space of time, even in very  well-established and heritage-heavy financial categories; consider how to best draw on depth of heritage as a foundation from which to differentiate from new entrants. Consistency of communication and deployment of recognisable distinctive assets as helpful customer shortcuts will help
  2. Technological competence will become increasingly important as the evolution of the digital world continues to influence consumer needs and behaviours. Informing perceptions of progress and innovation in this space is critical
  3. Customer service and brand experience remain key differentiators regardless of the touchpoint – every touchpoint counts, and all should deliver consistent excellence
  4. Monitoring the right combination of survey and non-survey consumer data is crucial to continually assess attitudes, needs and brand performance as well as to guide strategy and areas for investment

This article draws on the power of primary survey data via BrandZTM in combination with deep thematic analysis of secondary search and social media data, using proprietary AI tools and processes developed by Kantar.

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