From Libor to money laundering and trading to executive compensation, it is no surprise that trust in U.S. banks, and the industry at large, remains low. The comprehensive media coverage of these events put bank scandals on a very public stage.
The 2013 Edelman Trust Barometer showed that more than half of the global public consider themselves informed about the banking scandals and, of those respondents, almost half of Americans (49 percent) report they now trust banks less. Further, Americans are also holding companies responsible with 62 percent of respondents citing corruption, greed and conflicts of interest as the primary causes of the scandals.
Deserved or not, the U.S. banking industry has a lot of work ahead to earn back the license to operate. Earlier this year, Fed Governor Sarah Bloom Raskin summarized the challenge by saying, “Social trust is the glue that holds markets and societies together. In the context of banking, social trust and reputation are related concepts.” This year’s Financial Services Trust Barometer data uncovered some directional trends that help inform a path forward.
- Beyond Performance: Business performance is now table-stakes. When asked to rank which attributes would build their trust in Financial Services, seven of the top 10 attributes cited centered on a company’s integrity and level of internal and external engagement. Delivering consistent financial returns to investors was 10th.
- Communicate Company-wide: Of course, the CEO plays a critical role here but not everything should fall on his or her shoulders. When asked which person they would trust most to provide information about a company, responses varied based on the situation. For the company’s business performance or information on senior leadership, the CEO remains most trusted. However, when discussing community programs, company employees and media spokesperson(s) as more trusted than the CEO. And, in a time of crisis, a company employee was 15 percent more trusted than the CEO as a spokesperson.
- Message, Market, Channel: While repetition is important, with 47 percent of respondents stating they need to hear information more than four times before believing, it is not enough. Understanding your market and marketing mix is essential. For example, trust in banks is almost double in developed versus developing markets (37 percent, 68 percent respectively). Traditional media remains 21 percent more trusted then owned media in developing markets. Navigating this complexity is the difference in whether or not your company’s message is received.
The past few years have been bleak but there are very early signs of recovery. Global trust in Financial Services is above the 2011, 2012 levels and 44 percent of Americans believe the banking industry is headed in the right direction. It’s still a long road ahead but looking beyond quarterly performance and engaging across the enterprise in a way that is both globally consistent and regionally relevant is the best way to come back from the brink.
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