Marketing consultancy Millward Brown has released its
2010 annual top 100 brands survey, including the world’s most
valuable banking brands. Peter Walshe, global director at Millward
Brown, tells Farah Halime how banks in the emerging markets,
notably ICBC and ICICI, are creeping into a usually US-dominated
list.

 

Industrial and Commercial Bank of
China (ICBC) has been ranked as the world’s most valuable banking
brand for the second year in a row, signalling the growing
dominance of brands from the emerging markets, according to
research from consultancy Millward Brown.

ICBC, which is also the biggest
bank in the world by market capitalisation, boosted its brand value
by 15% to $43.9bn in 2009, with India’s ICICI Bank making a debut
into the list at number 10 with a brand value of $14.4bn.

Millward Brown global director
Peter Walshe told RBI that ICICI’s entry was a “momentous
occasion”.

“[ICICI] is a very interesting
brand because it’s bringing banking to the people in an area where
most financial Indian brands wouldn’t touch,” Walshe said, adding
that the bank had created a “vision of a leader saying ‘we’ll bring
democracy to a wider portion of the population’”.

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Walshe added that there had been a
general shift towards emerging markets, when looking at the top 100
list in its entirety, which includes leading social media and
technology brands.

“We have a full-set of
representatives from the BRIC countries [Brazil, Russia, India and
China] for the first time,” he said.

“Five years ago there was only one
brand from China – there are now 13 from the BRICs and Mexico, so a
massive increase in terms of brands that are coming in.”

Despite the prominence of China in
the rankings, with Bank of China and China Construction Bank also
in the top five, no bank from a BRIC country featured in rival
Interbrand’s top most valuable financial brands released last
year.

Instead, the US dominated
Interbrand’s rankings with American Express coming out on top with
a brand value of $14.97bn, closely followed by Citi, Chase and
Goldman.

The only UK-headquartered bank to
feature in its top 10 was HSBC, with a brand value of $10.4bn, less
than half the $23.4bn the bank’s brand is valued on Millward
Brown’s calculations.

But Walshe said Millward Brown’s
rankings were “much more rigorous and robust” than Interbrand’s due
to the direct consumer input which its rival lacks.

“We are not measuring the corporate
brand, which they tend to do,” he said. “It is the only study in
the world that inputs the consumer and the business-to-business
consumers.

HSBC and Barclays are the only
UK-based banks to feature in the top 20 of the Millward Brown
ranking. But in terms of brand momentum, or potential brand growth,
HSBC was one of the lowest scorers at three, while Barclays’ brand
contribution, or the proportion of intangible earnings driven by
the brand, ranked bottom alongside ICICI at just one.

The US banks fared better, with
Wells Fargo ranking as the most valuable US bank with a 16% rise in
brand value to $18.7bn. It scored top marks for brand contribution
and had a brand momentum of 7 out of 10.

Overall, the brand value of the 20
top financial institutions grew by 12% in the last year; the
biggest jump for any market sector in the top 100 ranking, but the
major credit card brands, MasterCard and Visa boosted their brand
value by the most, with a 57 and 52% jump respectively.

The brands benefited from a
customer shift to debit cards in an effort to reduce debt and a
rise in card usage for smaller transactions. But crucially, the
brands were not exposed to the toxic financial products that hurt
many banks during the recession.

Walshe said that consumers have not
recovered as quickly as their banks and consumer trust of financial
institutions was “at an all time low” as many people remain with
their banks only to “avoid the pain of switching services”.

Looking ahead, Walshe said banks
faced tough competition from major retail brands such Tesco, Virgin
and Wal-mart.

To counteract increasing
competition from retail giants, Walshe predicts banks will carry
out an overhaul of their strategy, including:

  • Banks will turn to social
    networking and one-to-one communication;
  • Banks will compete for the most
    affluent consumers, and turn away from less credit-worthy
    customers, and
  • Technology will drive many
    changes, including mobile banking and more interactive touch
    screens in branches.

Walshe said: “[Banks] have got a
lot to rebuild to regain the trust of the brand. And together with
a number of retail brands coming in, it makes life pretty tough for
them. They have got to be on their toes.”

BRANDING

Brand value – top 10 banks,
ranked by brand value

Brand

Brand value
($bn)

Brand value
y-o-y % change

Brand
contribution

Brand momentum

ICBC

43.9

15

4

7

Visa

24.8

52

5

9

HSBC

23.4

23

4

3

Bank of China

21.9

4

3

6

China Construction Bank

20.9

-8

3

7

Wells Fargo

18.7

16

5

7

Santander

18.0

12

3

9

Royal Bank of Canada

16.6

12

5

9

Bank of America

16.3

6

2

9

ICICI

14.4

n/a*

1

9

*n/a = not applicable because new
entrant to list. Source: Millward Brown Optimor (including data
from BrandZ, Datamonitor and Bloomberg)