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Bank branding was once non-existent in China; now it is growing rapidly © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 0 Save 8 HOURS AGO by: Don Weinland In the early 1980s, people in China had a one-stop shop for all their banking needs: the People’s Bank of China. It was, in fact, the only bank in China at the time, as well as the central bank. During the early years of economic reform in the country, citizens, government-owned enterprises and the first green shoots of private business had little choice about who to bank with. Marketing and branding for the state monopoly was virtually nonexistent. More than three decades later, branding for banks in China has taken on new urgency. The banking sector has opened up, adding thousands of new institutions. Choice has proliferated for consumers. Speed, efficiency and convenience in financial services has fashioned new household names, mainly for the internet companies that have experimented in finance. Meanwhile, the brands of powerful state banks are in an early stage of decline. “Beyond the bank’s traditional image, another important thing is convenience,” says Yang Cao, chief operating officer at Yirendai, one of China’s largest peer-to-peer lenders and one of the institutions competing head on with banks. “Younger consumers value convenience a lot. They will look at how convenient your mobile app looks and they pick the bank because of that.” The 2017 BrandZ Top 100 Most Valuable Global Brands ranking shows China’s top four state-owned banks losing ground in 2017. Bank of China, the oldest and most international of the four, tumbled 23 rankings to 94th, while Agricultural Bank of China fell 10 places to 72nd. China Construction Bank fared slightly better, losing eight positions to 54. Industrial and Commercial Bank of China, one of the world’s largest banks by market capitalisation, fell one place to 28th, retaining its position over global competitors such as Citi, JPMorgan and ANZ. The four Chinese banks did not respond to requests to comment on the fall in ranking. By comparison, Tencent, an internet group that launched one of China’s first privately owned banks in 2014, is ranked eighth in global brand recognition, climbing three places in 2017 and trumping the likes of IBM. Alibaba, an ecommerce company that now runs the world’s largest money market fund, rose four places to 14th. Banks are late to the branding game because they have focused mainly on servicing state-owned companies, experts say, often ignoring the rapidly building wealth of Chinese people around them. In sharp contrast, companies such as Tencent and Alibaba founded their businesses on directly serving customers over the internet and have been much more in touch with the financial needs of ordinary people. Alibaba, for example, founded Alipay, an online payment service, in 2004. State companies such as China UnionPay followed that lead more than a decade later in December 2015. Alibaba’s Yu’e Bao became the world’s largest money market fund in March when its assets under management hit $165bn, a testament to how non-financial companies have enjoyed the same trust as banks.

[Source”indianexpress”]