To say Co-operative Bank has faced a tumultuous few of years would be an understatement. In 2013, former chairman Paul Flowers was involved in a widely publicised drugs scandal, while at the same time a £1.5bn shortfall in finances almost pushed it to the point of collapse.
The brand has had a tough job on its hands to rebuild consumer trust, but marketing director Alastair Pegg is determined to change perceptions once and for all with the launch of a new brand campaign that claims ‘It’s Good To Be Different’ in a bid to set it apart from competitors in a positive way.
The road to recovery began two years ago when Co-op Bank unveiled its £5.5m ‘For All The Right Reasons’ campaign to highlight its ethical values, which has already gone a long way to rebuild trust judging by the fact it was named YouGov’s most improved brand across all categories in 2015. But Pegg, who joined the business in 2014, admits the brand hasn’t given much focus to redefining its identity since the Co-operative Group lost full ownership in 2013, which it is now addressing.
“As we split away from the Co-op Group in terms of our ownership structure, we needed to have some of our own identity. It certainly needed a bit of polishing up and some modernity and vibrancy to reflect the organisation we are [today], rather than the old [business],” he explains.
The new campaign is also an opportunity for the brand to highlight some of the positive initiatives it has set up, such as the fact customers won’t be instantly penalised if they miss a payment on their credit card, and its relaunched ethical policy.
“We are aiming to demonstrate through our products and services that we’re still a bank that has customer-led ethics at its heart. We’re trying to put the unfortunate events of the past behind us by making sure we’re doing the right things for our customers,” he says.
Marketing has played an important role in the company’s recovery, which Pegg believes has improved confidence internally, as well as with customers.
“We still exist, we still stand for the things we always stood for. It’s important to raise the awareness of the bank as a credible provider of current accounts and other products. Marketing has provided that awareness but also depth when providing the stories that customers and employees want to hear about the bank, where it is going and what it’s trying to achieve,” he says.
Rebuilding and recovering
All these measures are having an impact on consumer trust. Co-op Bank now ranks 14th out of the 30 banks listed on YouGov’s BrandIndex, which measures the public’s perception of brands on a daily basis across a range of measures including value, reputation and satisfaction – up seven places on last year.
“We saw an improving picture throughout 2015, and so we need to do a combination of customer service, marketing and product development in order to continue that. We want people to choose us as their bank, not only because we are ethical, but because we offer great banking products and services,” Pegg says.
The bank isn’t out of the water yet financially though. In August last year it reported a loss of £204m, compared with deficit of £77m a year earlier, and it confirmed that it will not make a profit for another two years.
It is not just competition from other high street banks that the brand is now having to deal with as the emergence of players in the financial technology sector is giving rise to new challenges.
London-based ‘fintech’ businesses aim to revolutionise the way people use money and transact with businesses, but while Pegg admits he is “fascinated” by the sector and is determined to keep an eye on competitors, he is not particularly worried.
“Fintech has a bit to go in terms of developing brands that are known and trusted by a broad audience that are prepared to put their money there.”
Alastair Pegg, marketing director, Co-op Bank
The entire industry faced a decline in trust after the financial collapse of 2008, which Pegg believes will affect emerging brands too. “New brands coming into the market have the challenge of making customers trust them in significant numbers to make the business work. But from [our] brand point-of-view, we’re focusing on what is right for our customers and making it work at a profit.”