Financial services firms need to work hard to regain the trust of their constituents, and effectively communicating the steps they are taking to address their difficulties will help restore confidence in their institutions, according to a new survey by BackBay Communications, a strategic marketing and public relations firm focused on the financial services industry, and Marketwire, a full-service newswire.
The biggest communications challenges for financial services firms in the next six months are overcoming a credibility gap with their constituencies (66 percent), managing crises (57 percent), and responding to regulatory changes (50 percent), according to the 109 financial journalists who participated in the survey, who also say financial services companies have an opportunity to rebuild trust and differentiate themselves in the current difficult climate by being seen as financially sound (71 percent), honest and credible (69 percent), and having their customers' interests in mind (58 percent).
"With the banking crisis, severe market downturn, hubris and outright fraud dominating the headlines, there is a great deal of fear and uncertainty that needs to be addressed through tangible actions and clear and credible communications," says Bill Haynes, president of BackBay Communications. "All financial services firms, regardless of whether they are having financial troubles, need to adjust their communications to address marketplace anxiety. Those firms that can offer reassurance through words and deeds will be best positioned for success."
Financial services reporters also face frustrations in today's environment. They say their biggest challenges are getting financial services firms to communicate in a downturn (48 percent), finding the time and resources to cover the news (47 percent), and knowing who to believe (39 percent).
Unresponsiveness and evasiveness can lead to negative media coverage. According to the financial reporters polled, the most common mistakes by financial firms that lead to negative media coverage include failure to communicate newsworthy developments promptly and honestly (79 percent), not responding to calls or e-mails seeking commentary (76 percent), and evasive responses (70 percent).
"Today's corporate communication executives should highlight their company's unique developments and discuss strategies they are using to deal with the economic downturn," says Michael Nowlan, president and CEO, Marketwire, Inc. "Press releases are a very effective way to maintain consistent, credible communications with all stakeholders at all times, but particularly during uncertain times."
Likewise, when communicating during a crisis, the most common mistakes made by financial services firms include lack of communication (86 percent), not providing access to senior leadership (61 percent), and incorrect or dishonest communications (60 percent). In a crisis, financial reporters say it is most important to communicate in a timely manner (89 percent), communicate honestly (85 percent), and provide access to senior leadership (67 percent).
Survey respondents say the best ways for financial services companies to receive positive media coverage is through developing relationships with reporters (78 percent), having company executives available to discuss industry trends (78 percent), and developing studies on marketplace issues (58 percent).