Never one to miss out on an opportunity, I was invited to speak at the “International Branding Conference” in Ankara, the Turkish capital in early December last year. I joined esteemed speakers from music to engineering to shipping in reflecting on change that will shape the next decade to come.
Financial services is no different – the industry continues to experience disruption and change. Building your brand in the right way is hard, especially when trust in the industry remains fragile. One big driver of change is digital transformation and ever-increasing expectations from today’s consumers.
Sitting in London, it’s easy to presume that we have one of the most developed and advanced banking industries in Western Europe. But when it comes to digital transformation Turkish banks are more advanced than their European counterparts .
Banking dominates Turkish finance, accounting for 78% of the financial services sector. As of April 2019, there were 52 banks in Turkey, the top ten are all local Turkish banks including Ziraat Bank, Isbank and Garanti Bank, with HSBC one of the largest of the international banks (this was the first brand that I met when I got off the flight).
According to a 2015 ING survey, Turkey had the highest percentage of internet users who use digital banking (65%). As of December 2018, the number of active customers using digital banking transactions reached 44 million. Ninety-six percent of the customers were household, and 4% were corporate. While 29 banks are in the race to get their licenses in the U.K., Turkey hasn’t opened a single new bank in the past few years.
Why hasn’t there been a digital bank in Turkey sooner? The answer is quite simple: the so-called ‘traditional’ Turkish banks have been so innovative and customer experience-friendly that they have been faring much better than the newly launched digital banks in other countries. Turkish banks and their leadership teams have embraced digital much quicker than their European or American counterparts. Most of their core systems where developed after internet banking became the focus. They don’t therefore have the burden of dealing with legacy systems that hobble many Western banks.
Garanti – 39.9% owned by BBVA – has maintaining its initial concept of a bank for millennials and the digital banking needs they demand. BonusFlas, its new app, is a clear example of the success of digital banking in Turkey. In a little over a month after its November 2015 launch, it was downloaded more than half a million times.
My market research revealed (I surveyed my Turkish colleague and her friends over dinner) that the average 30 to 40 year old has three banking apps, checked at least three times a day. Everyone in Turkey is attached to their mobile phone; it’s very normal to have a long conversation on your phone over dinner.
One trend less discussed is the emergence of sustainable finance it. Turkey has one of the youngest populations in Europe (15.8% out of a population of 82 million people) and they will want their financial products, to ensure sustainability in the long term. I think here we’ll see the biggest focus in the coming years, especially in a world where banks and financial institutions will need to take a purpose driven approach to marketing.
Turkey is ambitious. While energy has been a driver of economic growth in the last few decades, Turkey will need to diversify to hit its economics targets by 2023. One of these is to turn Istanbul into a global financial centre. Turkey’s young population, highly qualified workforce and rapidly developing markets along with its geographical and cultural proximity to the Middle East, all make Istanbul an ideal candidate.
Driving around Ankara and meeting government officials, I experienced first-hand the huge investment the local authorities and governments are making in Ankara – new hotels opening, conference centres, fintech hubs. This is a country keen to prove to international investors that it’s open for business.
My talk on “how to build a successful brand in financial services”. It went well. The audience was very respectable and engaged, despite my 6pm slot. I think speaking after a famous music influencer helped.
Invitations to speak at conferences in far flung places will be gladly accepted in 2020, we always need to learn and share our experiences with others.
Yvonne Maher is the deputy managing director of Cognito’s London office