Monday, October 01, 2012

Financial Services Companies on "Reputation"

How do we fix the reputational problems still afflicting the financial services industry nearly four years after start of the financial crisis? And what are the critical challenges and potential solutions that need to be addressed?

You may recall that Makovsky went into the field to uncover the answers. Earlier this year, I wrote a blog on the results of our 2012 “Wall Street Reputation Study” of 150 marketing and communications executives of leading financial services companies. It suggested revealing answers to the questions raised above. Overall poor management of the crisis -- admitted by many of the companies involved --and a negative perception of the industry overall were among the biggest problems. (For more information, see an article about the study on our website here.

Just last week we took another deep dive.

We co-sponsored a seminar program with the Financial Communications Society on “Rebuilding the Financial Services Industry’s Reputation” in New York City on September 25 , and invited a panel of leading communications and/or marketing executives to reflect on actions being taken at their companies, as well as issues that were still on the table. The diverse group of panelists represented: Credit Suisse, Capital One, Cigna, Fitch Ratings and Legg Mason. Approximately one hundred professionals from the industry attended.

Without individual attributions, here are some of the points made by the panelists:

• Everyone agreed that each company’s CEO must take responsibility “for the poor crisis management” during and after financial meltdown.

• “We have never seen our management team as conscious of and invested in public relations as it has been since the crisis.”

• “Business models are shifting to become more sensitive to our stakeholders. Management is looking at governance issues and is committed to making relevant policy changes.”

• The survey had noted that 74% of the executives believe increased regulation will improve reputation and trust. One of the panelists said: “Our management is a big proponent of the right financial regulations, and they are working with government to develop the best ones.”

• “Many CEOs must advocate for reform and present a global vision, not just one. They must offer to increase transparency, reduce the complexity of the business so that people can understand it better, and act responsibly by balancing interests of the different stakeholders.”

• “Management is putting a greater emphasis on the need to communicate with stakeholders.” Several companies are using social media and believe it is playing an active role in influencing opinion.

• One company spoke about measuring the rebuilding of trust among each stakeholder group via the Reputation Institute and another spoke of obtaining metrics on customer satisfaction.

The Q+A session was active with questions about the value of apologies and perspectives on the future, among many others.

One panelist aptly concluded: “We do better when we engage rather than when we put our heads in the sand. When we engage, our reputation moves up incredibly.”

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