Nation’s banks sell Canadian prudence to rest of the world
When Royal Bank of Canada created advertising for its European wealth management business last year, it built some ads around the image of a shimmering gold maple leaf, playing on Canada’s reputation for financial prudence.
Embarking on an aggressive expansion, Canada’s largest bank wanted to emphasize its roots in a country whose banking sector wins plaudits as the soundest in the world. With Europe’s debt crisis dominating the headlines, it was a message designed to resonate with prospective customers.
“We actually restructured some of the launch ads to dial up the Canadianness, because all of the research was demonstrating that is a value to the consumer right now,” said Jim Little, chief brand officer with Royal Bank. “If instability is sadly the word of the day in Europe, then stability in Canada is a good message to lead with.”
Royal’s ad strategy is just one example of a shift in tactics by Canadian banks, which were once seen as a backwater bastion of stodginess.
Far f rom hiding t heir roots, now Royal and other Toronto-based banks believe the strength of the Canadian brand can help them close foreign expansion deals and win over Europeans and Americans who have lost faith in local lenders.
Bankofmontreal, the country’s fourth-largest bank, has rebranded its U.S. Harris Bank arm as BMO Harris Bank, adding a Canadian link to what is now one of the biggest personal and commercial banks in the U.S. Midwest.
BMO, based in Toronto, made the move when it added Wisconsin bank Marshall & Isley to its existing Harris Bank network last year.
“We have never run from the fact that we were owned by a Toronto-based organization, but it’s never been as critical as it is today, just because of the safety and soundness that the Canadian banking system has,” said Dave Casper, head of U.S. commercial banking at BMO.
While the banks do their own in-house research into the strength of their branding, prominent surveys bear out the strength of “Brand Canada,” as some call it.
London-based Brandfinance, which releases an annual bank brand survey, said four Canadian banks were among the five global bank brands which gained the most value last year.
The consultancy put Toronto-dominion Bank second, with year-on-year brand value growth of $1.9 billion, followed by Bank of Nova Scotia, Royal, and BMO. The four banks trailed only American Express.
“There’s more confidence that the Canadian brand name is now an asset,” said Alan Middleton, a marketing professor at York University’s Schulich School of Business in Toronto.
Middleton sees the shift as part of a general increase in Canada’s profile within the global banking industry. Last year Bank of Canada governor Mark carney was named to head the G20’s Financial Stability Board, putting a Canadian at the top of an institution charged with making the financial world a safer place.
Unlike their counterparts in Europe or the United States, Canadian banks navigated the global turbulence in fine form thanks to their conservative lending style.
The banks needed no U.S.style bailouts, although the government did inject liquidity by buying up mortgage assets. They have expanded their business since, while foreign competitors cut jobs and sold assets.
The Canadian bank sector, which is now also taking advantage of the European bank industry’s troubles, has been named the world’s soundest by the World Economic Forum four years running.
Rick Waugh, CEO of No. 3 lender, Bank of Nova Scotia, said that reputation has helped Scotiabank as it expands into its preferred markets of Latin America and Asia.
The bank was selected last year as the winning bidder for a 20 per cent stake in China’s Bank of Guangzhou, which would give it a strong presence in China’s third most populous city once the deal closes.
“It was an open process, but they wanted Scotiabank, a successful international bank from a successful financial sector. They wanted Canadian over American or European,” said Waugh.