BfG News Issue 8 - Editor's Column: Brand Authenticity in the Financial Sector
08 Jan 2008|Added Value
There seems little doubt that consumers are increasingly considering ethical issues when making choices. It may not be the primary factor in all decisions or for all people, but we already know that many at least consider social and environmental options when choosing everyday items such as light bulbs, vegetables and even ultilities. So, does this carry over into financial services?
There is some activity on that front to suggest that it does. The UK government is asking banks and building societies to create mortgages that will allow people to invest in energy efficient measures for their homes. Banks such as Abbey and HBOS Group (Halifax Bank of Scotland) have launched green mortgages and HSBC offered a green benefit in their January sale this year.
The question is: will consumers take up these products? Are they interested in green or ethical initiatives from a bank?
A bit like saving, being green is something that nearly everyone now recognises is a good thing to do, but reality gets in the way. Green mortgages specifically are a ‘nice to have if all else is equal’ product for a couple of reasons. First, getting on the housing market – and staying on the housing market – is a real challenge for many people. Getting the deposit together and keeping the mortgage payments going are difficult when your income is uncertain. If they are able to get a mortgage they go for the cheapest deal they can find. This looks to be even more challenging in the year ahead. With the looming credit crunch, ethical issues could take a backseat to the more immediate availability of affordable credit.
The second issue with green financial service products is one of positioning. Most consumers aren’t interested in the banks helping them to be green. They want the banks to sort out the basics first – be honest, don’t charge too much and treat me fairly. Don’t preach about being green or socially responsible whilst you are behaving badly. It is okay for the bank to do their part – to reduce carbon emissions and support social causes but the bank telling a consumer to be green is a step too far.
That said, as ethical and environmental issues continue to become mainstream, offering green options and demonstrating authentic ethical credentials will become increasingly important for consumers of financial services. As with many other industries, ethical may well become a threshold attribute, something that all banks must speak to, in order to be in the consideration set. We believe it is therefore a case not of ignoring this area but of building ethical credentials that are true to your brand’s DNA and offering ethical options alongside other initiatives to rebuild trust and support the consumer.
Join us to explore the importance of brand authenticity at our ‘Green 2.0: Avoid the Greenwash’ on 6th March this year.
Director, Added Value UK