The emerging importance of brand energy in the financial services sector

The long-term shift in the developed world from economies based on the trading of tangible goods to the trading of intangible services has precipitated two major shifts in business thinking that have become particularly apparent over the past 20 years. These have been a shift from a focus on generating profit to a focus on creating value and a shift in the notion of the brand from something that exists in the minds of consumers to something that exists in the experiences of different stakeholders. This is no less true of financial services than any other service sector. In the UK, the Operating and Financial Review proposes that all quoted companies introduce a new section in their annual report and accounts from 2005 (now delayed to 2006) to place a greater emphasis on the importance of ‘intangible, largely human assets’. This should not be interpreted by businesses as another imposition by government but as an opportunity to develop a much better understanding of the nature of the intangible assets of the business and how these work to create value. Accountancy is rooted in a tangible way of thinking but is ill-equipped to understand the nature of intangible equity which is where the real drivers of value creation lie. The author posits a new notion of brand energy as a starting point for rethinking how businesses really work to create value in the unceasingly intangible business world. The illustrations given are all from the UK, but the trends in thinking are essentially global and the points made could apply to any country.