Public sector banks sport a new look
May 26, 2011 01:37 AM
Trust and tradition had been the strong points of public sector banks for long. But many of them have recently undergone an image overhaul and their sparkling history is no longer their main selling point. The re-branding exercise was led by Bank of Baroda, which spent around Rs 20 crore on the facelift, and followed by Canara Bank. Mumbai-based Union Bank of India is the latest to jump on the re-branding bandwagon. It has allocated Rs 75 crore in the current fiscal for the image makeover.
Re-branding is a transformation process, which involves a major change in the brand's positioning and brand elements like logo, colour and slogan. At the same time, it is an expensive and risky venture because the brand is set to change the image, which has been established in the customers' mind for long. "Re-branding without substance is of little use. Just by changing the logo and colour without bringing about any transformation in its processes, products and services, a bank cannot be successful. Genuine changes in its processes and technology transformation to suit customer requirements must accompany a brand change," said Bobby Pawar, chief creative officer, Mudra Communications. Pawar is the creative mind behind the re-branding and the new logo of Union Bank of India. "The challenge was to embark on customer-centric exposition to get the reason for the change. We had to reflect the dynamic face of the brand without destroying what lies at the core," he said.
The re-branding exercise of Union Bank of India was started with a project called Nav Nirman by Boston Consulting Group 18 months ago. Mudra conducted a study and assessed the market perception of the bank in the emerging market scenario before planning the makeover. It also refurbished its human resources processes.
The bank entered a tie-up with Narsee Monjee Institute, Mumbai, and Dale Carnegie Institute to improve the soft skills and product selling capabilities of its frontline officers. Today, every relationship officer takes care of 100 customers each of the bank's top 5-lakh customers, providing value added benefits. Said M.V. Nair, chairman and managing director of the bank: "We could roll out the core banking solution to 1,000 branches within a record time of four months from December 2007 along with our technology partner Infosys Technologies."
The bank claims to have added more than 2 million customers each in the past two years. It has a joint venture with KBC Group of Belgium, an asset management firm with a global standing, and has tied up with Edelweiss Securities Ltd and Wealth Advisors India for the distribution of wealth management products. Also, it has opened its first full-fledged overseas branch in Hong Kong, and representative offices in Shanghai and Abu Dhabi.
Canara Bank underwent a brand change in December 2007. The new look, designed by Ray+Keshavan, is aimed at giving the century-old brand a youthful look. It is also running a series of campaigns as part of the image makeover, and the advertisements are based on the theme 'change'. More significantly, the bank's repositioning exercise has taken a number of measures to improve its competitiveness, like reduction in administrative tiers, improving the skill levels of employees through training programmes and introduction of new technology. It has tie-ups with HSBC and Robeco to bring in the latest insurance and mutual fund products. A recipient of the 'Best Public Sector Bank of India' award, it is set to launch an online trading platform for share trading. But why should a bank, which has a legacy of over a hundred years, change its brand elements? In the case of public sector banks, the obvious reason is to attract young customers, as most of them have been hit by the aggressive marketing of new generation banks, which lured away the youth. New-generation banks are widely perceived as more technologically advanced and customer friendly. On the other hand, old banks are usually perceived as boring and slow. Hence an image makeover makes a lot of sense. Besides, the changing environment often forces brands to restructure or reinvent. The new generation demands a new set of brand values. Hence brands often have to embark on repositioning.
The re-branding exercise needs to be carefully executed and promptly evaluated. The result often depends on the depth of the exercise rather than the superficial changes. Sometimes methods like celebrity endorsements also work, as in the case of Bank of Baroda. After it roped in cricketer Rahul Dravid as brand ambassador, there has been a surge in the number of new customers.
Re-branding throws up a lot of internal and cultural issues. An institution breaking its century-old culture to embark on a new set of values and systems on a fine day is easier said than done. Also, the managements will have to make sure that it delivers on the new set.