Technology as an Enabler of the Global Branding of Retail Financial Services

The author argues that, though there is little doubt that technology has transformed the delivery of retail financial services in the past decade, this transformation also has implications for the global branding of financial services. The article presents a conceptual framework that illustrates how new distribution and processing technologies on the supply-side and changes in consumer attitudes to banking on the demand-side have driven the global branding of retail financial services. On the supply side, the change process has occurred through the removal of geographic and cost barriers to global distribution, which have enabled insurance companies, supermarkets, utilities, Internet-only banks, and other new players to enter traditional banking markets. Technology has created globally accessible internal information management systems, reduced the need for physical branch networks, stimulated greater brand awareness through interactive Web sites, fuelled the expansion of multinational banks and consolidation through mergers, and ultimately has eroded product differentiation and distribution channels as sources of competitive advantage. The combination of these supply-side elements increases the need for, and the effectiveness of, global brands. On the demand side, the change process has been driven by global convergence in key benefits sought by banking consumers in developed countries. The move to electronic delivery of retail financial services has increased competition and consumer sophistication, and consumers have become less loyal, more informed, and more willing to switch providers and use multiple providers in order to maximize the value of the unique mix of savings, loan, and transactions services they seek. Yet, at the same time, the ongoing need for security and reliability when performing financial transactions means consumers place value on brands that have established images as trusted parties. The result is an increased consumer preference for globally recognized brands and a willingness to purchase financial services from firms other than traditional financial institutions, provided the brand name is a trusted one. The author concludes that for managers of firms providing retail financial services, the major implication of these technology-induced changes in supply and demand is the need for customer-focused marketing strategies