HSBC's head offices in London's Canary Wharf
HSBC's head offices in London's Canary Wharf
A view from Nir Wegrzyn

Is HSBC using legislation to cover a more questionable decision to rebrand?

The news that HSBC is choosing to rebrand itself in a move that preemptively ring-fences its retail offering from its other operations, ahead of new banking rules, suggests that the business is aware that it has brand issues, says CEO of BrandOpus, Nir Wegrzyn.

This indicates confusion between a business challenge (the requirement to ring-fence ahead of new banking rules) and a brand solution (the decision to re-brand)

The decision to rebrand their retail offer prompts speculation. It appears that HSBC's name and logo will disappear from the UK high-street, and some – including HSBC Chairman Douglas Flint – have suggested that HSBC may return to Midland, the UK bank it bought 23 years ago.

This indicates confusion between a business challenge (the requirement to ring-fence ahead of new banking rules) and a brand solution (the decision to re-brand). We can hypothesise over perceived brand issues: has it suffered irreparable damage as a consequence of the banking crisis? Do the stakeholders think that creating a new brand will distance them from the public lack of faith in the banking system, and re-establish customer confidence with a blank slate approach? Or do they have even more ambitious plans to redefine the entire customer experience in banking (I would hope so), but harbour concerns that the existing brand would inhibit reappraisal?

Public perceptions at all-time low

Public perceptions of the banking industry are at an all time low, with 74% of us having less than complete trust in our banks. With customer confidence lacking, we are more promiscuous in our banking choices than ever – over 600,000 of us switched banks in the last six months of 2014. 

On one hand this means the high street is ripe for a new bank that disrupts the market. On the other, it makes the challenge of getting it right even more tricky.

They could hardly maintain ‘The World’s Local Bank’ positioning with a name anchored in the Midlands

The Midland brand brings with it some latent equity – even if it has been dormant for the last twenty years – and values of establishment, heritage and familiarity (albeit with an ageing demographic) could generate trust and confidence. Added to this, the fact that the name drives a specificness – rather than associations of a global conglomerate – could implicitly code positive old-fashioned values of "doing things properly", which have long been lacking in the industry. Put differently, "Golden Era" nostalgia could be a route to re-establishing public confidence. More fundamentally, the switch to Midland would mark a significant shift in strategy, with consequences affecting the wider marketing mix. They could hardly maintain ‘The World’s Local Bank’ positioning with a name anchored in the Midlands.

Global versus local

This raises another question: balancing the significant investment and support HSBC has put into the getting the ‘World’s Local Bank’ positioning to stick in the minds of the Great British public. This has been a sustained and effective campaign, and the decision to dismantle the global retail brand and in doing so write off that success – either resurrecting Midland or starting again with a new brand – should not be taken lightly.

If the issue is that the ‘World’s Local Bank’ no longer resonates, then this is of course an advertising challenge that should not affect branding.

HSBC should give serious consideration to its existing brand equities – aside from any communications issues. Focusing on the brand identity alone, what we do know is that our brains are considerably more receptive to symbols than words. Could those distinctive red triangles be retained, and if so in what capacity? A brand is the connection between a company and its customers, much more than simply a tool for recognition it is a lens that frames the way people feel about the product, service, organisation. The consequences of getting it wrong therefore are easy to imagine, and potentially disastrous.

Senstitive approach to rebranding

Rebranding should always be approached sensitively; after all, the brand is a strategically potent asset.

Rebranding should always be approached sensitively; after all, the brand is a strategically potent asset. Take with you what works and introduce new layers, new ideas, in line with your strategic objectives. Major brand redesigns – Abbey to Santander, Marathon to Snickers, Opal Fruits to Starburst – have shown that a complete rebrand is possible, that the consumer has very little memory (even though we are typically averse to change when asked) and that with enough support and strategic planning a brand can shift its name and icon. But why? All the above were prompted by what we know as the globalisation of brands. There was no issue per se with Marathon, people still remember Opal Fruits – they were just not efficient enough for their parent companies. The values merged, the identities switched. As was the case for a small UK brand called Midland, which at the end of the last century was transformed into what we now recognize as the global HSBC brand.

Momentarily setting aside the argument for preserving memory structures, any solution that resembles the transition strategy from Midland to HSBC branding almost 20 years ago should only expect marginal effects. The HSBC name will be forgotten in a few years, possibly replaced by the ever-so-slightly more emotive but equally forgettable Midland name. Regardless of how successfully the rebrand side-steps the impending legislation, and whatever the corporation’s vision might be, if the changes to the branding are slight, so too will be the changes to public perception. If indeed the underlying issue is one of perception.

What neuroscience can teach HSBC

These days customers are exposed to more brands than ever when deciding what to do with their money, with a proliferation of financial services brands to consider, particularly online. We have learnt from neuroscience that functional messaging (interest rates etc) will not change behaviour, entice new customers, retain existing ones, nor affect perceptions. An emotive brand story and identity, effectively executed, can. Thus HSBC need to clearly define what their vision is, what their business objectives are, and that will inform the approach moving forwards. Rather than postulate over whether we think the Midland brand should be brought back to our high streets, for whatever reasons, the conversation should be altogether more fundamental.

Brands manifest strategic intent, and the real question here is whether the next move for HSBC is one of resurrection or inception. Whatever the motivations – legislative or otherwise – that decision will be critical for the future of high street banking.

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