In a nutshell, Icelandic people borrowed a lot of cheap foreign money from local banks financed by the big global banks. So when the Icelandic krona collapsed, the people (and companies) in Iceland could no longer afford to buy foreign currency to pay off their loans so a lot of them went bankrupt.
The result was the same as in this country. People lost faith in the banking system even though they (and us) always looked for quick, cheap financial solutions for their everyday debt.
The Icelandic banks pretty much stopped brand-building advertising. But now one bank, Islandsbanki, has resumed marketing efforts for its wealth-management unit with a stunning (yes, stunning) series of TV commercials attempting to accomplish what U.S. banks have never tried: educating consumers about the perils of financial shortcuts (in the case of Iceland, borrowing foreign currency to get cheaper interest rates).
Since the financial collapse two years ago, rebuilding trust in the banking system remains the major challenge. A background paper on the rationale of the campaign stated: "The banks cannot go forward in their marketing efforts by trying to ignore the past. Everything the banks say is still put in the context of the collapse."
Added Stefan Sigurdsson, managing director of the wealth-management unit: "It will both take a lot of time and honest hard work to build trust again."
As part of the campaign, the wealth-management unit rebranded itself VIB Wealth Management, a name it had from 1986 to 2001. The VIB moniker stood for conservatism, long-term thinking and for educating clients on financial issues. Using the Islandsbanki name would have been viewed as a negative, since in 2008 all three of the major banks -- including Islandsbanki -- went bankrupt in the same week. New banks were founded, but the past still haunts them. That's a key reason for bringing back the VIB name.
In meetings with VIB's senior management, marketing and ad agency Hvita Husid hit on the idea of using professionals in various businesses to get across what VIB stands for. In the ads, the professionals -- a horse trainer, a trawler captain, a watchmaker and a painter -- talk about their philosophy for success, and what they say is related to the philosophy of wealth management.
Here's how the trawler captain explains his job: "I always bear in mind that I've got a lot of valuables on my hands, and it's my job to bring it home, both the crew and the catch. A sound preparation reduces the risks, but the main principle is to always know what you are doing. That makes you ready for all kinds of weather."
The TV and print campaign, according to Mr. Sigurdsson, "reflects the transformation that has been within our unit in the last two years. The campaign's core themes are respect for professionalism and real achievements, things we will strive to stand for in the future."
I like the idea of relating the work ethics and patience of professionals in other fields to the VIB wealth-management professionals. Too many financial-services ads in the U.S. use empty slogans about how they care about us, but too few come at it from the client's view -- how they run their businesses and how they expect the same professionalism from their financial provider.
And U.S. financial firms don't have the luxury of delivering the same old bromides. Respondents to an Edelman survey not only trusted financial-services firms less than the previous year, but they believe more regulation is needed.
What they most want is "honest communication" and "open and transparent business practices."
The likes of UBS's "you and us" and John Hancock's "the future is yours" seem woefully inadequate.