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05 July 2018, 11:50

What if?...Open Banking is open season for brands?

We’re living in the era of open banking. Since this January, the Second Payment Services Directive (known in the trade as PSD2) has been in force in the UK. This means that, in theory, the big banks have to allow smaller players open access to their systems so that others can provide a wide range of new and innovative applications. You can choose hundreds of ways to save, invest, manage your money, pay your friends, even save money on behalf of your dog (Ok, I made that one up, maybe…)

FinTech is opening up a brave new world and everyone seems to be scrambling to get a foothold. We’re told it will be the way that we, as consumers and small businesses, wrestle back control of our finances from the big institutions. Since the banking crisis, we don’t trust the banks anymore. In fact, according to a recent nfpSynergy survey, only 35% of people have even a small amount of trust left with their bank. 

This leaves the door wide open for new entrants to create useful and innovative products and services and ask that we sign up by the thousand. But is it as simple as that? Are we effectively asking that we move our money – and our trust – from the banks to people we know absolutely nothing about? And a closer look at that brand trust research shows that since 2009, trust in banks has actually risen.

How are these smart FinTech businesses going to maximise their chance of success? If the learnings from the other “new sector” stories of the past have taught us anything, success will come to those that put the foundations in place and start building a brand now. 

Love them or loath them, AirBnb and Uber, to name but two, all saw the importance of starting off with a thought-through brand. All had a clear vision, a defined purpose, and a long-term and unwavering commitment to a brand proposition that would ensure every interaction and appearance would, bit-by-bit, build their value and trust.

FinTech hasn’t quite worked this out yet. Many of the new products and services have brands that are seen by the business owners as temporary and plan to replace them “when they get time”. This is a huge missed opportunity, as a well-developed brand can be the way in which that crucial ingredient, consumer trust, can be established and a key reason why new customers are attracted to them in the first place. 

We all know that getting the brand right is way more than having a “cool logo”. It’s about having a clear and compelling narrative that actually means something to the various target audiences. It’s about having a shared understanding of a purpose, goals and values inside the business. It’s also about putting in place the strategies and plans that are designed to actively build trust in the brand. And crucially, it’s about building the brand for who they want to be when they grow up.

Investing the funds and energy now in developing a brand that will stand the test of time and will help build consumer trust will pay back many times over in the future. Great brands win in the end – even the big banks are starting to realise that.

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