For BoB, Vijaya, Dena Bank, single brand is the first challenge

If a name does not unify the three, there could be continued clash of identities, which could splinter the brand even before it takes shape, say Abhijit Lele and Nikhat Hetavkar.

Illustration: Uttam Ghosh/Rediff.com

Even as the three public sector banks grapple with a tangled legacy of financials, software and branch rationalisation and employee relations, there has been some speculation over what may appear to be a trivial issue: the name of the future entity.

Will it be, as some initially suggested, Bank of Baroda (BoB) with Dena and Vijaya as sub brands?

Or will there be an umbrella name that captures a little bit of all banks?

There are no clear answers yet and while the matter of a name may not be of pressing importance, especially when the banks are still setting up coordination panels to drive the merger forward, it could be critical in defining the ethos and nature of the future brand.

Besides it could well be the first big speed breaker in the merger process, say brand experts.

Ambi Parameswaran, brand strategist and founder Brand-buiding.com says, “The merging companies need to be under a unified brand.”

If a name does not unify the three, there could be continued clash of identities, which could splinter the brand even before it takes shape.

Parameswaran brings up the example of another big merger, Vodafone-Idea.

“Even in the case of Idea and Vodafone, I see the two brands consolidating eventually.”

Ashish Mishra, managing director of Interbrand offers another view.

“The current merger seems to be bringing in more disparate entities across regions.

"The opportunity of creating a ‘salad bar’ with individual brands held through an umbrella so that their identities and strengths are leveraged better, may be worth exploring,” he said.

He believes that this is more effective than the ‘melting pot’ approach that was the case with the SBI merger, where the merged banks lost their identities altogether.

A lot rides on a name The brand is more than its moniker but, a name works as an identity holder.

A study by Nielsen Global done in 2015 for the consumer goods sector showed that the name of a brand had the biggest influence on purchase decisions.

We buy because a familiar name inspires trust, said more than two-thirds of developing-market respondents (68 per cent).

Many also said that they bought brands that had a name they liked. It is a different story for banks.

Still, finding a name and fixing the character of the future brand has the full attention of those in charge of the merger process, say sources in all the banks.

None is willing to speak officially, but they said that senior management is vexed over the right name; one that helps not just customers, but employees too, to make a smooth transition.

A senior executive with Bank of Baroda said that it is too premature to arrive at a name, but the nature of the brand and the future character that the three banks will embody as a single entity is of paramount importance.

The name should reflect that. A senior Dena Bank executive said that there has to be a way to retain the identity of each bank under the merged brand. And the name should convey the strengths of all three.

“We cannot afford to lose out all that was built over period of time. Our brand equity has to be protected,” he said.

Parameswaran believes that the merging banks must understand the underlying principles of consumer behaviour for the name change.

“The customer will not change banks due to a change in name. Research has shown that customers mostly change banks only when there has been a major life change - like marriage, moving to a new city, a new job,” he says.

In his view, the three banks should be unified under BoB, for as long as staff and service remain the same, a name change won’t upset customers.

Mapping relationships, building trust

A 2018 study by Brand Finance on India’s most valued brands found that public-sector banking brands have taken a big hit in both their brand value ranks and growth in 2017-18.

Most of the top 100 PSU banks have seen a decline in brand value growth: SBI at 19 per cent, IDBI Bank at 30 per cent, Punjab National Bank at 16 per cent, Syndicate Bank at 9 per cent, Central Bank of India at 21 per cent, and Bank of Baroda at 14 per cent.

Trust has been a casualty in the customer-brand and the employee-brand relationship for public sector banks.

How does an old brand, beginning life anew under a new name, address this?

Mishra said that the transactional culture of the sector makes it difficult for the banks to appreciate the nuances for employee, customer and brand navigation especially during a merger or a big transition. But it is an opportunity for signalling change, of telling customers and employees that the new bank offers a new way of banking within the old system.

The most important thing that banks must look at is maintaining employee morale, says Parameswaran.

Employees need to be reassured that their jobs will not be lost.

Mishra says that employees and customers, in that order, need to be constantly communicated with.

A larger vision and purpose needs to be framed as a guiding principle for the merger, thereby projecting a superior branded future for stakeholders.

According to the senior BoB official, the new brand must reflect a combined force.

It is important that both internally and externally, through the merger process and afterward, the brand is viewed as a joint force rather than three regional entities working together.

And that is the biggest challenge.