This year is the five year mark for the Financial Crisis, and this week, we’re seeing the majority of large Banking and Financial Services companies release encouraging Q4 results. Yet, the turnaround in stock and business performance is not matched by the trust placed in these industries. In fact, trust in the Banking and Financial Services industries has dropped to only 50 percent among the global, informed public. Why is that?
Moments of crisis stay with us and also leave reverberations
The media was credited for its comprehensive coverage of recent corporate scandals, but just because they are in the past does not mean that they have not left negative, lasting impressions. Bad news sticks. More than half (56 percent) of global respondents said they are familiar with Banking/Financial Services scandals and, two-thirds of those surveyed reported trust in Banking below 50 percent. Notably, Germany, UK and Ireland came in at 23 percent, 22 percent and 11 percent respectively, and the U.S. saw a 20 percent decline.
Trust linked to behaviors
To take the conversation a step further, we asked respondents who were aware of the Banking/Financial Services scandals what they believed caused these scandals. A variety of reasons were cited, including corruption (25 percent), a compensation driven culture (23 percent) and lack of regulation (20 percent). The most interesting take-away was the fact that 59 percent of respondents cited causes that were within the company’s control, thus casting doubt on the leadership team.
Beyond the scandals, the 2013 Trust study also polled the informed public on how they believed banks performed in the day-to-day aspects of their business. The scorecard is below.
The past year has been one of particular turmoil within the Financial Services industry but there are lessons to be learned by all. The majority of respondents (63 percent) said that Banking and Financial Services behaviors are common across all business. So, who do we pivot from the current crisis of leadership to building trust and, over time, gaining a license to lead? At Edelman, we believe inclusive management is the starting point.
Laura Burke is a senior vice president in Corporate/Public Affairs at Edelman in New York.