Abstract: For Financial Institutions (FIs), it wasn’t too long ago when outperforming the benchmark and building client relationships were often the key determinants of success. However, the game has radically changed – in today’s complex, highly-regulated, specialised and competitive markets, FIs need to deliver stand-out differentiation and create the right market perceptions. This is necessary as they battle the well-established players, to win over global institutional investors and corporate clients.
Commercial success is on the line – FIs need to amplify their specialisation, expertise, products and differentiation to the relevant investors and stakeholders. This will help move target prospects through the awareness, consideration, and decision stages of the investors/client journey
Financial institutions (FIs), defined as FIs in the global markets, investment banking, corporate & institutional banking, private equity, hedge funds, asset and fund management sectors are under tremendous pressure to attract institutional investors and corporate clients – especially against today’s backdrop of markets turmoil, regulatory barriers and constant changes, emerging new players, the rise of fintech and bespoke electronic platforms.
To successfully engage and win corporate clients and institutional investors, FIs need to carefully construct a compelling brand position and marketing engagement plan that delivers the ‘right’ market perceptions with potential investors, clients, asset owners and stakeholders. Take the big brands of BlackRock, Berkshire Hathaway, PIMCO, Amundi, KKR, State Street and WorldQuant- these well-established brands radiate personas of performance and trust, powered by perceived superior traits of foresight, relevant insights, risk management and sound investment thesis. Whether it’s marketing their services or funds or attracting investors or talent, these players have magnetic brands that drive commercial success. This naturally places tremendous pressure on smaller FI players as they battle these mega players for the same global investors and corporate clients.
Smaller FIs – Opportunities for Smart Brands
Despite the goliaths in the system, there exists market opportunities for smaller specialised FI players. Many specialised firms have emerged as the mega brands have been recently hit by declines in equity and bond markets, the emergence of smart technology and clients requiring lower cost-base models. For example, in the asset management (AM) space, specialised AM players are perceived positively by advisers and private investors, who like the idea of entrusting their funds with more entrepreneurial, performance-driven, speciality-focused AM players that charge palatable fees. The smaller firms are also perceived as highly nimble, specialised, creative (in terms of product solutions) and attentive to market opportunities versus the traditional large brands.
As there are market segment opportunities, a smaller FIs should construct a smart brand position that delivers specialisation, differentiation and meaningful value. The strengths of the FI’s product, services and expertise, in relation to the market segment opportunity and relevant clients, investors, asset owners and stakeholders, should be clearly communicated and leveraged to build trust, foster engagement, and drive long-term growth.”
Why Some FI’s Fail to Drive Market Perceptions
Not having a smart brand and engagement plan has a steep downside. Despite having the right product and technical expertise, they struggle to attract the right investors, clients, asset owners and distribution partners/channels. Often, such players fall-short due to a few reasons:
- Failure to define a brand that is positioned smartly: Here, the FI’s current brand lacks definition as it is not anchored with a specific sector, asset class, investment thesis and stand-out expertise. These FIs fail to package and communicate their unique meaningful value proposition to clients and stakeholders.
- Failure to engage target clients and stakeholders with relevant and timely insights, that will support the brand’s position: Many FIs rely on routine post-event commentary without offering deeper, proactive content that sets them apart. Specialized FIs often lack the strategic conviction to develop timely key sector and/or thematic content and insights, missing an opportunity to showcase their leadership and expertise in their defined sector.
- Failure to go beyond ‘what we do’: Too often, FIs are perceived as merely offering products, asset classes, or defined to a market segment – unfortunately, they fail to effectively communicate their broader purpose, investment thesis and solutions which deliver meaningful value to clients, institutional investors, asset owners and stakeholders.
Driving Commercial Success: The Smart FI Brand
In the intense competitive space, smart FIs need to be thrive. For FIs, a smart brand is a well-positioned specialised brand with a corresponding effective marketing engagement plan – that will build awareness and trust, ultimately converting prospects into investors. With the objective of moving target prospects through the awareness, consideration, and decision stages of the investors journey, the brand and engagement plan will drive quality leads for the FI to raise the required AUM for the portfolio. Getting the ‘right’ blue-chip clients and investors is priceless and will have a halo effect – attracting a wave of follow-on investors, asset owners and distribution channels.
Well-positioned FIs usually demonstrate four critical competencies:
- First, they intentionally construct a clear meaningful brand proposition that is supported by columns of relevant products, expertise and services that are meaningful to a particular market segment. For smaller FIs, deep specialisation is important.
- Second, such FIs have a firm understanding of what alpha and beta means to the defined institutional clients and investors, and their specific pain points.
- Third, these FIs deliver smart marketing engagement programs with their target clients and stakeholders, with well-timed and well-packaged insights. Meaningful and timely insights and content help facilitate the commercialization and authenticity of the FI brand proposition.
- Lastly, these FIs are digitally savvy, using the digital space to reach, influence, engage and deliver both quality leads and build the brand.
For specialised FIs, building a well-positioned brand and engagement plan is achievable – especially in today’s digital world. Here, smaller players can punch above their weight class against the more established players, allowing them to better position, market and engage meaningfully with clients and stakeholders.
For FIs seeking to smartly position their brand and engage smartly, the FI must package and communicate its corresponding ‘smarts’ and key differentiators, which includes:
- Deep sector or thematic expertise & insights
- Investment thesis & methodology
- Capabilities – including relevant proprietary investment tools, products, asset classes, solutions & advisory
- Robust risk management model, including Sustainability (ESG framework) compliance
- Proactive regulatory & compliance management
- Other high-services value (e.g. markets access)
- Past performance
- Seamless execution & reporting
Lastly, a final key strategic consideration for FIs – in today’s world of risk management and ever-changing regulatory frameworks, FIs need to get serious about building and marketing its sustainability credentials, in a relevant precise manner – this is essential to attract global institutional investors and clients who are preoccupied with regulatory and risk compliance. FIs that authentically utilize the relevant ESG-risk decision making frameworks in their respective investment thesis and methodology should communicate this to investors, stakeholders, asset owners and clients. In doing so, there are distinct commercial and reputational advantages for such players:
- It enhances the appeal of the FI’s products/corporate brand to global institutional investors – especially those based in North America, Europe and Middle East. Afterall, the pool of institutional investors there are far larger than in Asia.
- It builds corporate reputation and trust with clients and stakeholders.
- It differentiates and distinguishes the FI, as the majority of smaller FIs lack sustainability thinking
- It facilitates employee acquisition and engagement, especially Gen Y & Z
Should your team require any assistance with FI (brand and product) positioning, marketing, communications and sustainability branding, please contact our Global Banking, Markets, Corporate & Institutional Banking team at info@corpmediapl.com
About the Author
Dennis Susay is a senior partner at Xp2, co-leading the firm’s counsel across the Global Banking & Markets, Corporate & Institutional Banking and the Life Sciences sectors. He has more than 25 years of Asia Pacific and international leadership experience – across marketing, brand, communications and BD with the world’s top brands including Bank of America Merrill Lynch, Yahoo!, Nike, Baxter Healthcare, and Johnson & Johnson.
Dennis served as the Asia Pacific Head of Marketing for Bank of America Merrill Lynch (BoA) for 12 years, overseeing the marketing and branding of the bank’s overall core business units which include Equities & FICC, Research, Investment Banking, Corporate and Institution Banking, across international markets, covering both EMEA and Asia Pacific. With his experience in such a highly regulated sectors, Dennis is well versed in working alongside regulatory, compliance and legal partners.
About cmXp2
cmXp2 (‘Xp2’) is a strategy services firm with deep communications, brand, engagement and advocacy expertise – designed to serve organizations operating in highly regulated sectors, specifically:
• Global Banking & Markets, Institutional & Corporate Banking
• Life Sciences
• Food & Nutrition
• Agriculture & Agri-Food and Aquaculture
Xp2 is a division of the award-winning Corporate Media Services Pte Ltd (CorpMedia) that has 32 years of experience. The firm is based in Singapore, serving Southeast Asia Pacific.
