Finance marketing

Recent news coverage of the cosmetic name change from AIG to AIU at the failed company's New York headquarters reminds us that a brand is a precious asset. The value of any brand asset depends upon whether it has delivered on its past promises and is believed likely to do so in the future. It takes years of effort to build brand trust but only a few months--or minutes--to squander it. A brand that has lost consumer trust is no longer a brand; it is merely a name.

Merrill Lynch is no longer a brand. Both before and after the collapse of the Internet bubble, Merrill and its commission-based executives were challenged by investors and government regulators for hyping stocks and other questionable practices. The last CEO spent over one million dollars to redecorate his office and pushed through $3.6 billion in executive bonuses the day before he agreed to a takeover by Bank of America. The Merrill Lynch brand is now close to worthless. It drags down Bank of America's brand every time it is mentioned in the same breath. The Merrill Lynch brand is unlikely to ever recover and Bank of America should drop it.

Merrill Lynch was one of 25 financial services brands that appeared on BrandZ's 2008 top 100 most valuable brands list. The rival 2008 Interbrand ranking of the top 100 global brands included 13 financial services brands. Citi appeared on both lists. Today, with its brand reputation seriously damaged, Citi's stock price is in the doldrums and the bank is all but insolvent (depending on how much credibility you place in the bank's valuation of its assets). Why then has there not been a run on the bank? Being too big to fail is hardly a solid basis on which to build brand equity. The true answer to the question is that retail depositors who do not trust Citibank do trust the Federal Deposit Insurance Corpopration.

Today, the FDIC is the most important ingredient brand in the world, way more important than Intel. Trust in the FDIC and the United States Government enables consumers to confidently deposit up to $250,000 in any insured bank in the USA. In these uncertain times, only FDIC insurance persuades consumers across the nation to deposit funds in higher interest CDs in Puerto Rico banks and in non bricks-and-mortar low cost Internet banks such as ING.