the full story

Belfius is the name of the bank/insurer that used to be called Dexia Bank Belgium. The company was hit hard by the financial crisis and they are still adjusting to the changes. Income is also lower meaning they have to rethink their service and staff model. We learn how the company created and launched a new name, and we also hear reflections on their new business model. And we also come to appreciate just how hard it’s been to keep morale in the company high in the face of looming job losses.

Building from the bottom up


Everyone who hasn’t been living in a bunker for the past 6 years is aware of the global economic crisis and the massive impact this had on financial institutions around the world, and in Europe and the US in particular. No financial organisations have been immune from this but some have suffered more than others. Belfius, which is a newly constituted bank formed from the remnants of the Dexia Group in Belgium, was one of those institutions that was shaken to their foundations by the crash. Consequently, it has been forced to undertake a very long, detailed - and often painful - analysis and reinvention of itself.

Dirk Smet, Director of Communications for the bank takes up the story: “The situation with Dexia was not a good one generally. The group’s investment portfolio was too large, its reputation was fatally damaged and financially it was in a bad way. There were frequent bad news stories and it became obvious that some sort of rescue package was needed. The Belgian government stepped in and Belfius was the resultant business vehicle.”

“But this was just the beginning of the problem,” he continues. “The failure in the global banking system left the reputation of the financial industry in general – and some specific institutions – in pieces. We knew that we would have to build not just a business model but also a new organisational structure and engender a deep culture change in the business. This was always going to be a difficult and far-reaching process with a lot of casualties, a painful transition and a good deal of soul-searching and honest confrontation of very challenging situations.”


A brand new name

So how did Belfius go about this process? “The first thing we determined we needed to do was to quickly divorce ourselves from the Dexia name and the various legacies that the group had left us with. In order to give ourselves some room and time for manoeuvre we decided to develop and launch a completely new brand in a very short space of time,” says Smet. They employed some traditional – but also some less conventional – methods in this process; and they used it to begin developing one of the elements that would be crucial to the company moving forward – internal communications and engagement.

Smet explains, “We engaged the usual communication agencies to help us develop a name, brand and corporate logo and livery. But we also enlisted assistance from the employees and used Vlerick as a sounding board for what we were doing. The final name was actually suggested by an employee and not by the branding agency - but the process we went through was pretty exhaustive and we considered 4,000 options before deciding on the name: Belfius.”

The name was kept under close wraps while the strategy for evolving the brand, logo and other corporate elements, and launching them to the public, was considered. Vlerick also assisted in this process, providing additional analysis and input into various scenarios in order to get to an optimum position. “We were very happy with this unusual three-pronged approach using staff, agencies and an academic establishment. It gave us different sorts of perspective and inputs and we could use the more professional communication elements to refine the raw contributions from the less initiated. We knew that whatever emerged from the discussion would need to offer a solution that wasn’t dependent on huge sums of money being invested in advertising and other forms of paid marketing – we needed to get the message across by less expensive and more viral channels,” he goes on.

The professional agencies developed the brand properties and a logo and corporate design that promoted Belfius as a more customer-oriented, inclusive brand – the ‘us’ in the name actually references the English collective pronoun. “Someone, we don’t who or how, leaked the new brand name to the press the night before the launch,” Smet told us, “and by morning there had been 40,000 mentions in social media. In the space of a few weeks the name had a 70% recognition factor.” That was only the first, very small, step in installing and re-establishing the company in the marketplace with a new face and ‘set of clothes’ as Dirk Smet puts it. “That by itself didn’t fix the reputational issues either of the previous business or the financial sector in general nor move us on to a place where the business was viable again. These were the real challenges we faced as a company and as individual managers within the company.”


Serious business challenges

The factors that management identified as needing to be addressed fell into four areas; dealing with the consequences of the financial crisis and the global issues it threw up; new regulation of the sector; changing consumer behaviour and expectation and; the role of the bank in merchant and wholesale banking. Smet has definite views on where the industry, and hence Belfius needs to go. “The global crisis highlighted major issues on the way banks grew and conducted their business and the risk element involved in this process. Governments were no longer willing to just sit back and let them get on with it – public opinion wouldn’t have allowed them to anyway. New regulations on the way financial services operate dictate how and where you can develop and expand and we have to work within that structure. And consumer behaviour and expectation have changed and continue to do so. This is not just a response to the crisis and recession but also a result of developing technology; for example mobile applications are now the main source of interaction for younger age groups and moving quickly through other age groups also. A consequence of this is that the role of the bank is changing and becoming more consultative and advisory rather than merely providing services. We wanted Belfius to reflect this more progressive and engaging approach.”

What did all this mean in hard terms for the business? This was where the reality of the situation really hit the management and workers. “The business could not continue to operate the way it had been nor go back to the way things were 20 years ago. These were no longer tenable options. We had to find a new means of moving forward. Unfortunately that meant taking some very difficult and painful decisions,” Smet explained. “First we had to completely detach from the parent group and the services and support they provided – and then recreate these for ourselves. But we also inherited certain responsibilities and liabilities that we couldn’t just shake off. Now we’re in a situation where we know our income will drop, in truth because we have had to stop certain operations that had generated significant revenue in the past, and some of the business areas we’ve now moved into, to replace them, offer lower margins. So immediately we had a structural problem within the business – too many staff, insufficient revenue and an organisation and business model that didn’t necessarily reflect and support the new marketplace we were in.”

“We were faced with the task of adapting and preparing the business for a different environment while still trying to grow income and profitability in a difficult climate and from an unfavourable position in the market.”


Clear objectives moving forward

These were major challenges for the company to grapple with at a time when the whole economic and cultural environment was hostile to business, and the financial sector in particular. How did Belfius go about achieving their goals? “Well the first thing was to make sure we had crystallised, meaningful and communicated objectives,” says Smet. “We had to be realistic as well as ambitious and we had to take staff along with us. The truth was we had too many staff and we needed to move to different skillsets. In practice, this meant that we needed to fundamentally trim our workforce. On top of that the company can’t afford the levels of salary and other remuneration that were in place until just recently. The business is just not sustainable at that cost level. The staff too therefore has to contribute to the bottom line and understand that their position, and the future of the company, is dependent on them continuing to offer a cost-effective return. As a start, we have reduced the board and senior management numbers also by similar proportions.”

Belfius Enjoys Change

What sort of effect did this have on the staff – morale, industrial relations, and public perception? “I believe people accepted that things had to change and that if they hadn’t lost their job they had to find a way to make themselves valuable and integral to the success of the business. I think it shocked many inside and outside the business to see the scale and rapidity with which we made the cuts and began to move the model away from staff-intensive areas such as the branch network and into channels like mobile and online banking. We will also shift the emphasis away from pure banking towards insurance, as this is also a part of the Belfius Group. This extra dimension gives us added diversity and a business advantage when banking conditions become difficult. The insurance business has a different emphasis to banking with after sales being much more important; this was another feature that had to be factored into our reconstruction.”

 “We decided that to help the business and the people move on we would need a more active internal communications strategy with clear values and mission; ones that were new and exclusive to Belfius and not handed down from the Dexia legacy. A more flexible and fluid decision-making structure also emerged from this process and this also helped with inclusion and engagement,” he explains. “What is starting to emerge is a more responsive and accountable business where everyone is signed up to the corporate plan and where the values are demonstrated top down and all the way through the company.”


Vlerick Brand Management Centre

Vlerick have played a part in many of the activities that have got the business this far – but they’ve taken a more central role in another project that Belfius was keen to develop in their step towards renewal.  This related to meaningful KPIs for marketing communications and relating them more directly to growth and profitability. This turned out to be more difficult – and interesting – than anyone had anticipated and it took a whole year for the Vlerick Brand Management Centre to really get to the heart of the issue. “We thought that we were just not smart enough to link these things, but it turns out that it isn’t that straightforward,” Smet concludes. “But they have managed to develop some useful and relevant measures which we now use in drawing up contracts with communications agencies. So it is a very practical and important element in our planning and evaluation now.”


A word from Vlerick

 Professor Frank Goedertier: There are at least three key success factors to pull off a successful re-branding endeavour. One, a company has to make sure that the re-branding is sufficiently noticed to avoid ‘lost’ customers that suddenly don’t find their old brand anymore and do not recognize the new name. Two, a company should avoid that its re-branding is perceived as merely cosmetic (i.e. just a name change, rather than a renewed offering/approach to the market). And three, successful re-branding endeavours are supported from the inside-out, meaning that that should focus on creating an internal brand culture that ‘lives’ the new brand identity.


In the Belfius case these three elements were explicitly considered. The 70% brand recognition rate a few weeks after the launch proves the company succeeded in taking the first hurdle of getting into the attention zone of its target group. The fact that the name was leaked was likely a blessing in hindsight from this perspective.
The resultant social media buzz, carefully monitored and managed by Belfius and its communication agencies, created an attention window that was quickly further opened by mainstream media thus generating large scale exposure around the new brand name. To make sure the name change isn’t perceived as cosmetic, Belfius takes every opportunity to link the name change to changed consumer needs and expectations in terms of banking. The advantage of a drastic name change is that it creates a psychological opportunity to start from a clean slate in terms of brand building. Finally Belfius realized that probably the most crucial factor in a re-branding exercise is having the brand supported by a strong internal brand culture. A new name can be announced with a big fuss, but if there is no real behaviour supporting the new identity claim in every consumer contact moment that follows, a lot of the identity re-building momentum is lost. As Belfius truly sees this a key priority the company is taking all precautions to make the re-branding a long-term success.


the full story

& Rankings

Equis Association of MBAs AACSB Financial Times