Best Brand

November 29th, 2017

Summary Analysis

A.pnglmost a decade ago, the financial crisis was in full swing, and big banks couldn’t have had a worse reputation. High-profile CEOs such as Angelo Mozilo at subprime mortgage lender Countrywide Financial Corp. and Charles Prince at Citigroup were undergoing a public thrashing during Congressional hearings, protesters were camping out in Occupy Wall Street tent cities across the nation, and the largest piece of financial regulation since the Great Depression—the Dodd-Frank Act—was enacted.

Much of the anti-bank sentiment that was sweeping the nation, although not completely gone, has ebbed. And today, a handful of big banks have strengthened their brands, increased their revenue, improved their technology and customer service, and are doing better than ever. Some of the top bank brands have been investing heavily in their brands since the financial crisis, and it shows.

The best big bank brands in our ranking are JPMorgan Chase & Co., Capital One Financial Corp., U.S. Bancorp, PNC Financial Services Group and Bank of America Corp. We looked at various metrics to analyze the 10 largest retail bank brands, including revenue growth over a two-year period, marketing spend as a percentage of revenue, social media followers compared to peer banks, corporate giving as a percentage of revenue, and customer satisfaction and brand ratings through a variety of valuation and research firms, as well as the bank’s level of complaints with the Consumer Financial Protection Bureau.

Anne Rivers.PNGJPMorgan Chase, which splits its brand into J.P. Morgan, the global investment bank, and Chase, the retail arm, is strong when it comes to marketing and advertising spending, social media and customer satisfaction. Capital One ranks high on marketing and advertising spend, revenue growth and social media. PNC is strong in corporate giving and social media. Aside from Capital One, BB&T and TD Bank have been outpacing peers in the U.S. in terms of revenue growth. TD Bank acquired Commerce Bank in 2008, and uses the motto of "America’s Most Convenient Bank," with a promise of long branch hours and excellent customer service.

In fact, the biggest banks in general have been improving their customer service and branding in the wake of the financial crisis, and are doing much better on satisfaction questionnaires, says Jim Miller, senior director of banking at J.D. Power. The biggest banks certainly took a hit during the crisis, and the reputational harm is long-term, especially in the minds of some older customers. Older customers tend to like smaller banks, Miller says, while younger customers give more credit to the larger banks for their advanced technology. Chase reported in a February 2016 presentation that 57 percent of new checking account openings were for people under the age of 35. "Customers are flocking to them for their technology," Miller says.

While that might seem odd to someone who wonders why it takes so long to get a person on the phone at a big bank call center, the big banks are offering additional ways to contact them, including online chat boxes, in-app messaging and even ways to make a credit card payment by talking to Amazon’s Alexa on the Echo device, as Capital One and U.S. Bancorp are doing. The best brands also are spending a lot on marketing and advertising. JPMorgan Chase spent close to $3 billion in 2016, far and away the largest amount. Capital One, Citigroup and Bank of America each spent more than $1 billion.

Banks are increasingly working to create an emotional connection with their customers, and good customer service is one of the best ways of doing that, since banking itself is a commodity, says Anne Rivers, managing director of BAV Group in New York City, a branding consultant. The big banks rarely offer deposit rates much different from each other, for example. "The banks leading your list are differentiating themselves in terms of customer service," says Rivers.

Not all banks are seeing their brand value rise. Citi, which is still a strong international brand, was badly hobbled by bad loans during the financial crisis, and had to sell off substantial assets. Wells Fargo & Co., which grew in size after its crisis-era purchase of Wachovia Corp., was damaged by its fraudulent account opening scandal last year. Still, Wells is one of the largest banks in the nation, is profitable and continues to grow revenue. Customers who like the people they’ve dealt with at the bank tend to rate Wells Fargo highly, Miller says. It’s sort of like the educational system. "If you ask someone about the educational system, they think it’s terrible but their child’s teacher is wonderful," he says.

How They Ranked

      SCORE REVENUE GROWTH/DECLINE YE 2014-2016 MARKETING/ADVERTISING EXPENSE (% OF REVENUE), YE 2016
  1 JPMorgan Chase & Co 3.27 0.58% 3.03%
  2 Capital One Financial Corp 3.79 14.41% 7.10%
  3 U.S. Bancorp 4.88 5.69% 2.04%
  4 PNC Financial Services Group 5.33 -1.39% 1.63%
  5 Bank of America Corp. 5.38 -2.55% 2.03%
  6 TD Bank (U.S.) 5.40 14.53% 2.17%
  7 SunTrust 5.81 5.40% 2.00%
  8 Citigroup 6.08 -9.51% 2.34%
  9 BB&T 6.88 16.93% 0.80%
  10 Wells Fargo & Co. 7.15 4.65% 0.67%

Did You Know?

A.pnglthough almost all the big U.S. banks have grown in size, financial strength and customer satisfaction since the financial crisis, JPMorgan Chase & Co. stands alone when it comes to brand strength. The banking behemoth, really a conglomeration of banks, came out of the crisis and recession that followed far stronger than most of its peers.

JPMorgan, led by CEO Jamie Dimon and his team, made it to the top of our list of best brands because of its reputation, advertising spending, corporate giving, record on customer service and social media followers compared to peers. "They are incredibly well positioned," says Alex Corringham, a consultant with Brand Finance in London.

How did it become the strongest brand in the nation?

First, by becoming one of the biggest, when New York-based Chase Manhattan Corp. bought another big New York bank, J.P. Morgan & Co., in December 2000. Chase had a retail presence in 17 states across the nation, and was made stronger with the international corporate banking and trading capabilities of J.P. Morgan. Then, in 2004, it bought Chicago-based Bank One in a $58 billion deal, which expanded the scope of its retail bank, including adding a strong credit card business. Dimon, then in his late 40s, was Banc One’s CEO at the time and a year later would become CEO of the combined bank.

Joe Sullivan.PNGBut even then, the newly consolidated JPMorgan was still outranked in terms of assets and deposits by Bank of America Corp., which had grown through its own wave of mergers. A pivotal moment came during the financial crisis. JPMorgan, with relatively strong capital and liquidity, had avoided making major bets on subprime mortgages. Dimon was known as a manager who personally took responsibility for the risks facing the institution, and encouraged open and honest debates among his management team. In 2008, it picked up the failing Bear Stearns & Co. for the equivalent of just $2 per share, and later bought the failed thrift Washington Mutual after it had been seized by federal regulators. Other banks struggled during and after the crisis, and the effects have been long-lasting. "Their strength came during the recession when [JPMorgan] managed financially so well," says Joe Sullivan, CEO of Market Insights, a bank marketing firm based in Chicago. "They managed better than almost any of the other banks during the recession. They really got their sea legs."

It’s not always the no. 1 brand on J.D. Power’s customer satisfaction surveys in categories such as retail banking, small business banking or mortgage, where nonbanks and smaller banks tend to do better, but it’s consistently strong, says Jim Miller, senior director of banking at J.D. Power. "Chase is one of the most consistent banks out there," he says. Its customers also lodge fewer complaints with the Consumer Financial Protection Bureau than they do for the other three largest banks.

In terms of brand recognition, Chase has been investing heavily on marketing, spending nearly $3 billion in 2016, more than any other bank brand. For advertising, it has used its sizeable resources to run advertisements featuring Serena Williams and Kung Fu Panda 3. For strategy, it has zeroed in on Generation Y, the 84 million young people otherwise known as millennials, who are digitally savvy and demand that of their banks. JPMorgan consistently has one of the top mobile banking apps, which grew 16 percent last year to 26 million active mobile users. It has increased its brand recognition with Chase Quick Pay, a person-to-person payments app, and has reconfigured bank branches with self-service touches such as cardless ATMs that look like a iPad.

But it’s not just young people who like JPMorgan for its technology. The bank grew its customer base by 4 percent to 60 million U.S. households last year, so it now does business with nearly half of all U.S. households. More than 70 percent of the bank’s consumer households use it as their primary bank, according to the company’s 2016 annual report.

Its financial performance also has been strong. Commercial banking nearly doubled revenue last year, and the company earned a record $24.7 billion in net income on revenue of $99.1 billion. The bank has assembled a team that has driven performance and consistency, including Gordon Smith, who is CEO of consumer and community banking. And Dimon himself hasn’t been afraid to take a stand on current events and insert himself into the 24-hour news cycle.

"He is very recognizable guy, and very admirable guy," Cunningham says. "He’s a major asset for the bank."

Bank Director Research Group