The Trust Cure for Germany’s Financial Services Industry

Travellers riding through Germany on one of the shiny white ICE-trains read stories in free newspapers about a thriving economy, robust labour market, low unemployment, humming exports and growing pension plans. The Euro may have its ups and downs, but it is far from failing. Yes, Germans have lost money investing at wrong turns in the cycle. Yes, Germans have suffered from the latest financial crisis. Germany is not without issues. But these effects were far less devastating here than, for example, in the U.S.

Yet looking at the 2016 Financial Services Trust Barometer, one gets the opposite impression. Only one-third of Germans trust their country’s financial services companies – the lowest rate among all countries surveyed. Trust in German financial services CEOs is also low – again, only one-third of Germans trust industry leaders to do right.

When the Edelman.ergo team presented this data to an exclusive group of financial services communicators and marketers in Frankfurt at April’s end, reactions were mixed. No one, however, doubted the data. About the findings, one passionate guest at the event said, “given that our industry has burned up people’s money during the last decade more than once, why should anyone trust us at all?”

This is a fair question with a difficult answer. The good news: The latest Trust Barometer yields actionable insights into how to regain trust. Taken from the perspective of a German financial services CEO, these leaders must:

  1. Work on the corporate narrative. The public wants to know what your company is about – beyond earnings reports. They question the licence to operate, value societal engagement and want to know how your company makes their lives easier and keeps their families safe. Trust data very clearly displays a huge gap between demand and performance in these behaviours.
  2. Work on your personal narrative. The public wants to know who you are, where you come from, what you believe in and what obstacles you overcame. They want someone visible who relates bad news with as much grace as good news; not a caricature who pumps out quotes and shies away when the seas get rough.
  3. Get social. Stop wasting time and money on top-down messaging. It is a lost cause telling the public how great your company is. Instead, start engaging honestly with your stakeholders and the public. Tear down the siloed walls between PR, advertising and marketing. Unlock the potential of communications marketing to get the engagement right.
  4. Engage and support your employees. Listen to them, and they will become your most essential advocates. The data shows that employees are among the most credible spokespeople (along with technical and academic experts, financial industry analysts and “a person like yourself”). Financial services employees are also the most trusting of their industry. Financial services may be the least trusted sector among the general population, but it is the most trusted employer.
  5. Start now – and be prepared for the long haul. Though still at the bottom, the financial services industry is gaining trust faster than other sectors surveyed (up eight points over the last five years). Building trust takes time. People may not forget, but they do forgive and eventually re-assess the value the industry offers.

There is no easy way out of this trust crisis. Germany is an overbanked country with further consolidation on the horizon. CEOs must make communications marketing part of their ongoing efforts. Now is the time for German companies to tell their stories, and tell them well.

Tobias Mündemann is senior partner at Edelman.ergo in Germany and former Co-founder of ergo Kommunikation.