Most top financial service executives are worried about their companies’ reputations, but are failing to make changes consumers want to increase public trust in the organizations.
A study comparing attitudes of consumers and financial service employees, conducted by the global communications company Cohn & Wolfe, found a large gap between consumer expectations and the behaviors of financial service companies. The study of more than 1,000 U.S. consumers and more than 200 financial service employees showed dramatic disagreement between the two groups about the economic future, the services these companies should offer to help customers and what these companies should do to restore consumer trust.
When asked to characterize their financial outlook for 2009, 64.2 percent of consumers said they were pessimistic. By contrast, a majority of financial service employees are optimistic about the economy.
Meanwhile, only 20 percent of financial service respondents said their companies have made significant business strategy changes to reflect the economic downturn. And almost 60 percent of financial service employees said their companies have done nothing formal or systematic to explain their strategic approach during the recession.
“The financial industry is in crisis and consumers don’t understand why it doesn’t behave like it’s under the same pressures as the rest of the country,” says Matt Wolfrom, head of Cohn & Wolfe’s corporate practice. “Financial service companies must change the way they act and communicate during these challenging times of crisis, to explain to their customers what these businesses are doing to protect their interests. Crisis situations offer enormous opportunities to strengthen stakeholder relationships, but they require companies to communicate much more aggressively and to create communications that reflect conditions confronting the audiences.”
For example, nearly 65 percent of consumers said they have not been contacted by their financial services providers to offer help in surviving the recession, though most financial service employees indicate their companies have attempted to communicate, largely through traditional channels, such as newsletters.
One striking disparity identified by the survey was the difference between consumers and industry employees on what must be done to restore trust in financial service companies. Consumers say companies must stop excessive bonuses (51.9 percent), pass along savings from lowered interest rates (44.72 percent), increase transparency (29.9 percent) and abolish charges (20.2 percent), while financial service executives say they must improve customer service (64.4 percent), increase transparency (41.6 percent), provide better access to financial planning (21.8 percent) and make senior management more visible (20.8 percent).
Consumers (29.9 percent) are nearly twice as likely as financial service employees (16.3 percent) to believe that increased regulation will be the significant driver of change.
The striking divergence between financial service industry employees and consumers fuels a growing distrust of these companies. Four out of ten consumers (39.2 percent) say they do not believe their bank is looking out for their best interest, and only 6 in 10 consumers say banks are the most trustworthy financial service. Less than two in 10 consumers (18.4 percent) say financial advisors are most trustworthy. Approximately one in 10 consumers (11 percent) say insurers are most trustworthy.
“In crisis situations like this, over-communication to consumers and key stakeholders is critical,” said Wolfrom. “A successful approach starts with executives and flows through the workforce directly to consumers. Communication tools take many forms, including digital outreach and grassroots campaigns. In these trying times the industry has an opportunity to strengthen and personalize relationships that will translate into renewed trust and ultimately more business.”