Six Years Later: What’s Holding Up the Financial Services Industry’s Reputation Recovery?

Makovsky

The financial services industry still struggles with chronic reputation issues, but there are some green sprouts appearing in the scorched landscape devastated by the fires of the financial crisis and Great Recession. Our recent seminar with the Financial Communications Society (FCS) focused on this slow recovery and on the key ingredient missing from the current economic recovery mostly only characterized by more jobs and an upwardly moving stock market. That key ingredient is a “healthy” reputation and the industry still lacks one.

At the FCS event, executives from Wells Fargo, Fannie Mae, Moody’s and Bank of America/Merrill Lynch participated on a panel moderated by FT star Tracy Alloway to discuss what was working at their companies to bolster reputation and new threats to their company’s standing. Cybersecurity was one areas that all companies were mobilized to prevent a major reputation fallout, but the hacking threat was put forward as more of a question of when, than if.

When we synthesized the finding of our 2014 study and listened to the panelists, we came up with a few things that are prolonging the reputation recovery for the industry and individual companies…

• First, 81% of executives said the financial crisis still had a major effect on stakeholder perceptions
• Second, executives told us the biggest challenge going forward is their own company’s commitment to rebuilding reputation.
• Third, reputation issues are clearly hurting the bottom line. The study showed that companies lost on average more than 25% in business in the past two years.
• Forth, most organizations have not implemented the most effective integrated programs that have proven to speed reputation repair. They must do more now to avoid additional losses.

Let’s hope in this planning season that financial service firms commit and invest heavily in their reputation building efforts, especially the best performing programs. The 2014 Wall Street Reputation Study actually pinpoints those most effective program.

– Scott Tangney