The recent global recession wiped out a number of retirees savings and bankrupted homeowners caught up in the subprime crisis. Within a short span, people who felt financially secure suddenly were faced with the prospect of extreme poverty. Banking institutions did little to alleviate the agony and suffering of those burdened with colossal debt and instead upped their efforts to recover risky loans (Rhodes & Stelter, 2010). These actions contributed to the escalation of home closures and business failures.
Consumers have yet to absolve the banks for their role in the financial crisis and in an article penned by Alan Kline, the author posits that banks are trying to do all they can to shed the image of buccaneering merchants. He argues that since a poll conducted J. D. Power and Associates showed that 77% of consumers have lost trust in the banking system, it is imperative that banks take the initiative to restore consumer confidence now that the recession is receding.
The article notes that a group of banks under the umbrella of Financial Services Roundtable retained the PR firm, APCO Worldwide, to spearhead their efforts in boosting customer confidence. Individual banks have also launched programs to promote their efforts at reconnecting with a consumer base disillusioned by banking practices witnessed during the recession. By attempting to remodel their public image, most banks have developed innovative ways of communicating with their publics. Bank of America is commended for exploiting Twitter to gain valuable feedback from its customers.
The article bemoans the attempt by banks to focus on expensive advertising campaigns touting their achievements and product portfolios. Kline opines that efforts by the banking system to make amends should speak for themselves if the impact is to be felt. This view is supported by the president of Weber Shandwick, Barb Iverson and Paul Eagle, the VP financial services at a leading Baltimore communications firm. They feel that corporate responsibility must be seen in the various activities these banks are undertaking.
Such activities should have a direct impact on the lives of the recipients for the message to spread throughout the community and enhance the profile of the banks. My view is that the banks response to the recession was to safeguard their shareholders position at the expense of their customers. They seemed to be reading from a script penned by Milton Friedman who espouses that the business of business is profit making for stakeholders. The public has a right to be enraged by the banks’ failure to look out for their interests.
I would suggest that their efforts to make amends go further than public relations exercises meant to appease those affected by the recession. Their actions must substantially restore the wellbeing of their publics (McDonald & Rundle-Thiele, 2008). This will entail investing in social infrastructure and developing products that will enable homeowners and debt laden people to make a fresh start in life. The use of Twitter and Facebook can enhance the process of reconciliation by offering a cheap and effective forum for consumers to ventilate their thoughts and opinions.
As suggested in the article, such forums should not be used to promote banking products as they will scare off people averse to ‘in your face’ advertising. Instead, well developed web sites can advertise new products and services targeting the intended audience. Article BANK THINK Less Talk, More Action US Banker | June 2010 By Alan Kline RELATED LINK Large banks may be making money again, but they still have a ways to go to win back consumers’ trust.
One poll shows 77 percent of Americans believe large financial institutions still have not done enough to make amends for their role in the financial crisis, and a majority of consumers surveyed recently by J. D. Power and Associates perceive banks as more profit-driven than customer-driven. It’s no wonder, then, that the industry is preparing to mount a massive public relations offensive. The Financial Services Roundtable, which represents 150 of the nation’s largest financial firms, has reportedly hired APCO Worldwide to lead a new campaign slated to kick off later this year.
Meanwhile, several large banks are planning to team up on a PR campaign of their own, according to news reports. Image-polishing is already a major theme in bank marketing these days. Citibank, for example, has been running full-page ads-tagline: “We’re building a new Citi”-in which it promises help to at-risk homeowners or consumers struggling with credit card debt. Many banks are also tying charitable giving into their marketing campaigns. But PR professionals say a broad industry campaign is needed as well, and they have some simple advice for banks going forward: Show more, tell less.
Paul Eagle, the vice president for financial services at Imre, a Baltimore communications firm, says that at the height of the crisis, banks built their messaging around strength and stability because people were concerned about the safety of their savings. Now, though, he would advise banks to show “humility and empathy” and make clear that they understand the needs of Main Street. Their actions, he adds, should speak for themselves and don’t necessarily need to be backed up by full-page ads touting how many home loans they’ve modified or how many small-business loans they made last month.
“PR is all about communicating your actions, but I would do the opposite,” Eagle says. “It’s not about communicating your actions, but what your actions communicate. ” Barb Iverson, the president of the global financial services at Weber Shandwick, says bankers should especially be thinking “show, don’t tell” when trying to reach policymakers in Washington. Instead of trying to wield influence through slick marketing campaigns, banks should be hyper focused on meeting the needs of their communities-investing in neighborhoods, supporting charities, devoting resources to financial education-and letting the message “bubble up.
“Members of Congress are heavily influenced by what their constituents back home are saying,” she says. Eagle says the campaign should also lean on social media, including blogs, to “start conversations” with customers. Both Eagle and Iverson pointed to Bank of America as one bank that is doing an especially good job at using Twitter to respond to customer complaints and concerns. “It’s a monitoring device,” Iverson says. “If you complain about your bank and the bank gets back to you in an hour, it shows someone is listening and it gives you a better feeling about your bank.
” One thing Eagle would advise banks not to do is use social media to pitch products. “Once you do that,” he says, “you’ve lost them. References McDonald, L. M. & Rundle-Thiele, S. (2008). Corporate social responsibility and bank customer satisfaction: A research agenda, International Journal of Bank Marketing. 26 (3) Rhodes, D & Stelter, D. (2010) Accelerating out of the Great Recession: How to Win in a Slow-Growth Economy. McGraw-Hill; 1 edition