Rebranding Santander: Triumphs of “the world’s most boring bank!”

January 11 was Re-Brand Day for the 1,000 Abbey and Bradford & Bingley branches across the UK as they were renamed Santander. DAVID MacKAY explains the philosophy behind the change, and how the same lessons will be applied to Alliance & Leicester, also part of Santander, which will rebrand later this year.

Spain’s Banco Santander has been travelling for 152 years and, says David MacKay, there are striking lessons from the journey that has made the bank into an acclaimed global player which has continued growing through the turmoil and volatility of the world financial crisis.

Delivering Edinburgh Napier University’s Confident futures, values and ethics lecture, MacKay, Santander’s Divisional Director for the North of UK, explains how it has successfully integrated its Abbey and Bradford & Bingley operations in the first part of a major and complex rebranding of its UK operations across 1,000 branches. He identifies seven lessons.

1. Vision of the journey:
The bank has been fortunate, he says, in the visionary leadership of the Botín family which has led Santander for 80 of its 150 years. That has provided an unusual degree of stability to develop the bank’s strategy. And one of the core reasons for its success has been chairman Emilio Botín’s insistence on the bank “sticking to its knitting” as a branch-based deposit-taker and lender.

Botín ’s central vision has been to “demonstrate the power of the Santander’s retail brand through its branches”. The branch is the core of the bank’s operational philosophy – to show its power through its presence in almost 14,000 high street locations throughout the world.  

2. Consistent strategy:
“We’ve been described as the most boring bank in the world,” MacKay recalls. “But that’s great! It’s actually stimulating being the most boring bank in the world.” It exactly describes the bank’s strategy. At its heart is active management of the market, liquidity, and credit risks it faces. Its Risk Committee meets twice a week. “This is a huge, huge internal culture in our bank.”

Named “Global Bank of the Year” in December – the latest of a string of awards – Chairman Botín amplifies the philosophy: “If you don’t understand an instrument, don’t buy it and don’t sell it. And, if you don’t know your customers, then don’t lend to them.”

Santander was “never prey to the easy money mentality prevalent during the past cycle” and withstood criticism for holding back during the boom times. The Bank of Spain prevented Spanish banks doing business in so-called ‘toxic instruments’ but, says MacKay, “it’s always been the culture of Santander to be hugely averse to those sort of things”. 

3. Ready for opportunity:
“If you want to grow and grasp things, you have to be set up for opportunities as they arise.” The deal with HM Treasury to buy Bradford & Bingley’s £20bn of retail deposits and 2.7 million customers was accomplished in a single weekend. “And the winners were also the customers with savings accounts who were guaranteed that their money was safe and stable.”

A similar opportunity arose when Alliance & Leicester was bought for £1.6bn and “brought into the Santander family”. The lesson was the same: “Be set up for opportunity. Make quick decisions. Don’t stand around asking ‘shall we do this?’. Plan everything”.

4. Ambitious in transformation:
“You’ve got to get everyone onto the same IT platform. That’s quite a challenge. We had completed the transfer of Abbey onto Santander’s global IT banking system in 2008, and taking the experience and learning from that, completed the transfer of Bradford & Bingley in just 12 months.” It wasn’t just a question of migrating millions of customer records onto the same IT systems and it was about more than asking staff to wear the same uniforms.

The learnings were all about communication, “getting people behind what you’re trying to do – it’s a real cultural job of making sure they all feel part of things. That’s being ambitious in transformation”.

5. Customer-led proposition:
“Banks want your current accounts. And that’s because, if you have a current account with a bank, you’re more likely to do more business with that bank. Our approach is to be a challenger in this marketplace with very good offers. In fact in 2009, Santander achieved more ‘best-buy’ mentions across all products than any other bank.

“If you bank at Santander, you receive 5% in your current account up to £2,500 for the first year – so it’s effectively worth £125. We’ve just introduced free use of cash machines in Spain for certain types of current account customers which has gone down very well.”

Other loyalty-inducing offers include zero credit cards, zero current accounts, specifically for mortgage customers, and – importantly in today’s low interest rate environment – access to cash products at 5% or 6%.

6. Invest in the brand:
The bank’s huge Formula One investment has associated it with winning teams. It caused some “light-hearted internal frictions” globally – “the Brazilians love Felippe Massa, the Spanish love Fernando Alonso and, in the UK, we follow Lewis Hamilton – so, when Hamilton was winning there was hell to pay in Madrid, although all that changed in the first race in Bahrain this year as Alonso romped to victory!”

But the investment has paid-off. High street awareness of the Santander name rose from just 20% in 2006 to over 90% last year. And that also encouraged a positive media response about Santander’s strength and stability at a time of marketplace disquiet. 

7. Pride in the badge:
“You can have your visions, strategies, quick decisions, your ambitions, great products and big TV spend – but if your staff don’t buy into it and don’t deliver, then it’s all a poor investment. “Standards are very important – of dress, behaviour, the way you receive and deal with customers. You spend a lot of your life at work and so you want to enjoy it. That’s the really crucial bit. As one Rotherham colleague says: ‘With all the work beforehand, we’re pumped-up at being Santander!’”

The corporate game-plan
by STEVE PATEMAN Head of Corporate and Commercial Banking, Santander UK

“Financial strength and stability”
Moving to the Santander name was very important for Corporate Banking. In fact, we were one of the first businesses in the UK to take the Santander name once we announced our intention to rebrand Abbey, Alliance & Leicester and Bradford & Bingley in May 2009. 

For our customers, the financial strength and stability Santander represents is crucial and it’s helped us win new business at a time when many corporate customers are reassessing their banking relationships. In addition, the name has attracted quality staff as we have taken the opportunity to recruit over 170 additional managers as competitor uncertainty meant some very good people were prepared to move.

“More deposits, more lending”
Our approach has always been based on a real understanding of customers’ needs that puts the customer at the heart of everything and we have added innovative products in deposits, current accounts and payments. Alongside this, we’ve developed new services, such as asset finance and invoice discounting, fulfilling one of Santander’s core principles of being a full service bank as well as a force for change in any market it enters.  

And the results speak for themselves: we attracted in excess of £9bn in new deposits as businesses looked for a ‘safe haven’ to put their money, while lending to SMEs was up 16% in 2009. 

The High Street story
by ALISON BRITTAIN Executive Director Retail

“Confidence, motivation and pride”
The benefit of being part of Santander has been evident in the retail bank in recent years.  Although we were still Abbey, the backing of Santander through its IT, processes and product development has meant a step-change in what we can offer customers. 

We have sought to continually improve the competitiveness of our products, culminating in the launch of the Santander Zero current account in January 2010.  This is the only account that has zero fees if overdrawn. As a result, sales and service have improved and we have a confident and motivated workforce who is proud to work for Santander

“Others have been forced to follow”
The move to the Santander name from Abbey and Bradford & Bingley has practical advantages as it created 1,000 Santander branches across the UK. Abbey customers now have access to 50% more branches and B&B access to three times more branches.  

Our products are now second-to-none - we had more best-buy mentions that any other bank in 2009 – and we’ve challenged the status quo by driving product improvements others have been forced to follow. I firmly believe Santander has been a force for good in UK retail banking.

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