Driving Success: Unleashing the Power of Overall Brand Equity on Financial Performance in India's Banking Sector

Abstract

Purpose: The widespread perception that branding is only associated with tangible goods is experiencing a transition at the moment. Now, even the services space is being engulfed by the growing arms of branding. There is no exception to this rule in the banking and financial services sector. The banking business is going through a period of fast transformation, which is evidenced by the intensive expansion of rivalry that is taking place between banks and the growing expectations of both existing customers and prospective ones. The purpose of this study is to assess the impact of customer-based brand equity on financial performance indicators in the context of banking sector in India. This allows us to determine whether brand equity bolsters financial performance in respect of Banking sector in India.

Design/Methodology/Approach: The paper uses correlation and simple linear regression to analyse how the overall brand equity impacts different financial performance indicators in respect of banks part of this study. To gather this information both primary and secondary data was used, for overall Brand Equity of Banking sector standardised questionnaire was used to assess the perception of customers residing metropolitan cities among the selected Banks and to assess the financial performance, key indicators have been picked from the annual reports.

Findings: The findings demonstrate that brand equity has significant impact on all the selected financial performance indicators of Indian banks except Return on Assets (ROA) and Non-Performing Assets (NPA) Ratio.

Implications: This study enhances the existing knowledge on brand equity and portrays how it directly impacts the key financial performance metrics of Indian banks. It has implications for the bank managers who focus on attracting customers in this competitive environment while retaining their financial competitiveness. By strategically managing and nurturing brand equity, managers can attract and retain customers, enhance financial competitiveness, and make informed decisions that contribute to the long-term success of their banks.

Originality Value: Given the absence of published academic literature relating to the impact of brand equity on bank specific financial performance indicators like total deposits, net advances, net interest income, NPAs etc., this study serve as a guiding light for further studies in this direction. The insights gained from this research can inform managerial strategies aimed at leveraging brand equity to improve financial performance. Banks can use this study as a basis for developing marketing and branding initiatives that align with their financial goals and enhance their competitive advantage.